15

- 3109

- cv Micula, et al. v. Gov 't of Romania

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

SUMMARY ORDER

R ULINGS BY SUMMARY ORDER DO NOT HAVE PR ECEDENTIAL EFFECT
. C ITATION TO A SUMMARY ORDER FILED ON OR AF TER J ANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ' S L OCAL R ULE 32.1.1. W HEN CITING A SUMMARY ORDER IN A D OCUMENT FI LED WITH THIS COURT , A PARTY MUST CITE EI THER THE F EDERAL A PPENDIX OR AN ELECTR ONIC DATABASE ( WITH THE NOTATION " SUMMARY ORDER "). A PARTY CITING A SUMMA RY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTE D BY COUNSEL
.
At a stated term of the Uni ted States Court of Appeals for the Second Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York, on the 2 3rd day of October , two thousand seventeen.

PRESENT: RALPH K. WINTER, DENNY CHIN , CHRISTOPHER F. DRONEY , Circuit Judges.

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IOAN MICULA, EUROPEAN FOOD S.A., S.C. STARMILL S.R.L., MULTIPACK S.R.L, AND VIOREL MICULA , P etitioners/Intervenor

- Appell ees ,

v. 15

- 3109

- c v GOVERNMENT OF ROMANIA , Respondent

- A ppellant

. *

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* The Clerk of Court is respectfully directed to amend the official caption to conform to the above.2 FOR INTERVENOR

- APPELLEE VIOREL MICULA : DANFORTH NEWCOMB (Paula H. Anderson, on the brief ), Shearman & Sterling LLP, New York, New York

.
FOR PETITIONERS

- APPELLEES IOAN MICULA, EUROPEAN FOOD S.A ., S.C. STARMILL S.R.L., S.C. MULTIPACK S.R.L. : FRANCIS A. VASQUEZ, JR., White & Case LLP, Washington, DC.

FOR RESPONDENT

- APPELLANT : IOANA SALAJANU, Rock Fusco & Connelly LLC, Chicago, Illinois

.
FOR AMICUS CURIA E: Lee F. Berger, Joseph R. Profaizer, Igor V. Timofeyev, Paul Hastings LLP, Washington, DC. Appeal from orders of the United States District Court for the Southern District
of New York ( Schofield , J. ).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,

AND DECREED that the orders of the district court are REVERSED , the amended
judgment is VACATED , and the case is REMANDED as set forth below

. Respondent

- Appellant Government of Romania ("Romania") appeals from two
opinions and orders of the district court (Schofield, J

. ) denying its challenges to the
recognition of an arbitral award (the "Award") issued by the International Centre for

Settlement of Investment Disputes ("ICSID") in favor of certain Swedish nationa ls and
affiliated companies, Petitioners/Intervenor

- Appellees herein ("Petitioners")

. 1 We

1 By order, entered December 22, 2015 , this Court granted the Petitioner s' motion to dismiss Romania's appeal of the underlying amended judgment as untimely, but permitted Romani a to proceed with its appeal from the district court's orders entered Augus t 5, 2015 and September 9, 2015 declining to vacate or modify the amended judgment.3 assume the parties' familiarity with the underlying facts, the procedural history of the

case, a nd the issues on appeal.
On April 11, 2014, following the issuance of the Award, Viorel Micula, one of the

Petitioners , filed an ex parte petition in the District of Columbia to "con firm" the Award.
A year later, the district court denied the petition without prejudice concluding

-- as

Romania asks this Court to do on appeal

-- that ICSID awards may not be converted
into judgments by summary ex parte proceedings. See Micula v. Gov't of Romania , 104 F.
Supp. 3d 42 , 52 (D.D.C. 2015)

. Again on an ex parte basis, on April 21, 2015, the Petitioners other than Viorel

Micula filed a petition to recognize the Award in the S outhe rn District of New York
using summary procedures set forth in Article 54 of the New York Civil Pr actice Law
and Rules (the " CPL R"). This tim e, the district court (Buchwald, J .) granted the petition

and entered judgment the same day. Viorel Micula then filed a motion to intervene and
amend the judgment to include him as a party entitled to payment , which motion was
granted on Apr il 28, 2015

. On May 1 9, 2015 , Romania filed a motion under Rules 59(e), 6 0(b) , and 62(b) to

amend, vacate, or stay the amended judgment

. 2 It principally argued, as it does on
appeal now , that the amended judgment is void because (1) the Foreign Sovereign

2 Romania also moved for relief with respect to the original judgment, but the district court denied that motion as moot as the amended judgment became the operative judgment.4 Immunities Act (the "FSIA") provides the sole basis for jurisdiction over a foreign
sovereign award

- debtor, and the FSIA is the exclusive mechanism by which an ICSID
award against a foreign sovereign may be recognized, and (2) under t he FSIA, venue is
improper in the S outhern District of New York

. The district court (Schofield, J .) denied

the mo tion on August 5, 2015 , concluding that the FSIA is inapplicable to the

enforcement of an ICSID award and that personal jurisdiction over Romania under the

FSIA was not required to enter judgment against it

. Romania then filed a mot ion to

reconsider , raising the same FSIA and venue challenges . The district court (Schofield,

J .) denied that motion on September 9 , 2015. T his appeal timely followed

. We review the denial of Romania's motion to alter or amend the judgment under
Rule 59(e) for abuse of discretion. Munafo v. Metro. Transp. Auth. , 381 F.3d 99 , 105 (2d
Cir. 2004). The denial of Rom ania's motion to vacate the judgment under Rule 60(b) , however, is reviewed de novo

. See Burda Media, Inc. v. Viertel , 417 F.3d 292, 298 (2d Cir.
2005). A party is entitled to relief from a final judgment u nder Rule 60(b ) when the
judgment is "void," that is, if the c ourt entering judgment lacked subject matter or
personal jurisdiction over the judgment debtor. See City of New York v. Mickalis Pawn
Shop, LLC , 645 F.3d 114, 138 (2d Cir. 2011).
The issues present ed in this appeal are virtually identical to those that this Court
recently addressed in Mobil Cerro Negro, Ltd. v. Venezuela , 863 F.3d 96 (2d Cir. 2017).

There, the district court had also entered judgment against a foreign sovereign5 enforcing an ICSID arbitral award based on a creditor's petition in the Southern District

of New York , and filed in ex parte proceedings under the CPLR

. See id . at 99 . As
relevant to this appeal, in Mobil Cerro , we held the following : (1) T he district court erred
in finding that the FSIA did not govern the enforcement of IC SID awards against
foreign sovereigns and that its procedural mandates were inapplicable, see id. at 99

- 100;
(2) t he FSIA provides the exclusive mechanism for enforcement of ICSID awards
against foreign sovereigns in federal court , and s ummary ex parte proceedings (such as
those under the CPLR) are incompatible with the FSIA, since they are, by nature,

conducted without required service on the foreign state, i d. at 99; (3) b ecause the award
creditor failed to satisfy the FSIA's requirement for service, t he district court lacked
jurisdiction over the foreign sovereign under the FSIA and its judgment was void, i d. at

124

- 25 ; and (4) v enue was improper in th e Southern District of New York because the
FSIA requires a plenary action to be brought in the Distri ct of Columbia unless "a
substantial part of the events or omissions giving rise to the claim occurred , or a
substantial part of property that is the subject of the action is situated , " in another

district

. 28 U.S.C. § 1391(f) ; see also Mobil Cerro , 863 F.3d at 125.
Accordingly, as to Romania's first argument, we agre e that the district court

erred in holding that the FSIA does not apply to the enforcement of ICSID awards
against foreign sovereigns. To the contrary, the FSIA provide s the sole basis for
jurisdiction over Romania and sets forth the exclusive procedures for the recognition of6 the ICSID Award

. See Mobil Cerro , 863 F.3d at 115. The Petitioner s' use of a summary ex
parte proceeding borrowed from the CPLR was neither permi tted under the FSIA nor
adequate to satisfy its procedural mandates

. See i d. at 99. Instead, the Petitioners were
required to file a plenary action, subject to the requirements of process, to convert the
Award into an enforceable judgment against Romania

. See 28 U.S.C. § 1330(b). T he

dis trict court thus lacked jurisdiction over Romania under the FSIA , and erred in

d eclining to vacate its judgment as void.
As to Romania's second argument, we also agree that the Southern District of

New York is an improper venue under the FSIA , at least on this record

. The Petitioners'

ex parte p etition is devoid of any assertion that New York is the appropriate venue

under the FSIA

. It is also unclear from the face of the petition that there is any conduct
connecting this action to New York. The parties are foreign, the arbitration hearings
were conducted in Paris, and the property at issue was located in Romania.
Because the FSIA governs all aspects of this action , and its procedural
requirements have no t been satisfied , the district court lacked subject matter and
personal jurisdiction over Romania. Accordingly, t he judgment below is void and t he

district c ourt's order s must be reversed and its judgment vacated without prejudice to

the Petitioner s' filing an action to enforce the ICSID award in compliance with the FSIA
and in a court in which venue is proper.

We have considered the Petitioners' remaining arguments and conclude they are7 without merit

. Accordingly , we REVERSE the orders of the district court , VACATE the
amended judgment , and REMAND the case to the district c ourt with instructions t o

dismiss the petition without prejudice.

FOR THE COURT: Catherine O'Hagan Wolfe, Clerk