Court Opinion

ID: 75563
Source: CourtListenerOpinion
Date Created: 2010-04-26 23:13:09+00
Date Added: 2024-06-11T17:21:02.518400
License: Public Domain

SEGUROS DEL ESTADO, S.A., Plaintiff-Appellee,
                                                      v.

                            SCIENTIFIC GAMES, INC., Defendant-Appellant.

                                               No. 99-14166.
                                      United States Court of Appeals,

                                              Eleventh Circuit.
                                               Aug. 20, 2001.

Appeal from the United States District Court for the Northern District of Georgia. (No. 98-00968-1-CV-
CAM), Charles A. Moye, Jr., Judge.

Before BLACK, FAY and COX, Circuit Judges.
        BLACK, Circuit Judge:

        Appellant Scientific Games, Inc., appeals the district court's denial of its motion to dismiss, wherein

Appellant asserted the applicable limitations period expired and the doctrine of lis alibi pendens applied.

Appellant also appeals the district court's grant of summary judgment to Appellee Seguros del Estado, S.A.

The district court effectively determined Appellant was in breach of an indemnification agreement because
Appellant did not reimburse Appellee for its payment of $2.4 million in accordance with an obligation on a

bond. Finally, Appellant appeals an adverse judgment of approximately $7 million. This judgment is

comprised of a principal amount of $2.4 million and pre-judgment interest at an annual rate of 38.76%.
        This case involves three agreements: (1) a contract between Appellant and Empresa Colombiana de

Recursos Para la Salud, S.A. (Ecosalud), a Colombian governmental entity, under which Appellant created

and managed a national instant lottery in Colombia (Lottery Contract); (2) a bond which was required under

the Lottery Contract, taken out by Appellant and payable by Appellee to Ecosalud (Bond);1 and (3) an
indemnification agreement which required Appellant to reimburse Appellee for sums paid to Ecosalud and

for any interest paid on such sums (Indemnification Agreement). On appeal, Appellant raises four arguments:

(1) in light of pending litigation in Colombia, this case should be dismissed under principles of international

comity and the lis alibi pendens doctrine; (2) alternatively, this case should be dismissed under Colombia's

2-year statute of limitations governing insurance disputes; (3) the entry of summary judgment for Appellee

    1
     While this document is entitled "Bond," the terminology used in the documents at issue in this case
is sometimes characteristic of language used in the United States where insurance policies are concerned
and is sometimes characteristic of the language used where surety bonds are concerned. We note this
only to explain our use of this language.
should be reversed due to factual issues regarding whether the Bond's effective date was extended, whether

the Indemnification Agreement's term expired, whether Appellee made a valid payment under the Bond, and
whether Appellee's settlement with Ecosalud was reasonable; and (4) the award of pre-judgment of interest

of 38.76% per annum should be vacated in favor of either an interest amount based on Colombian pesos

converted to U.S. dollars or a requirement that Appellee provide proof of Colombian bank interest paid on
U.S. dollar transactions.

        We affirm the denial of the motion to dismiss, the grant of summary judgment, and the $2.4 million

principal judgment, but we vacate the portions of the order and the judgment related to the pre-judgment

interest payment. We remand with instructions to determine the interest rate that Colombian banks would
have applied to U.S. dollar deposits on November 1, 1994, and to recalculate the interest due.

                                            I. BACKGROUND2

        On March 12, 1992, Ecosalud entered the Lottery Contract with (1) Appellant, (2) PKI Associates,
Inc., a New York corporation, and (3) Daibutsu, Inc., a Panamanian corporation (collectively, Contractors).

The Contractors formed a Colombian operating company, Wintech de Colombia, S.A. (Wintech), to run the
lottery and thereafter assigned the Lottery Contract to Wintech. Clause 41 of the Lottery Contract required

the Contractors to obtain a bond from a Colombian insurance company in the amount of $4 million or its
equivalent in Colombian pesos. This bond was to guarantee the Contractors' performance of their obligations
under the Lottery Contract, including the payment of any penalties. Appellee issued to Appellant3 the Bond,
whose initial term was from March 12, 1992, to March 12, 1993. As partial consideration for the Bond,

Appellant executed the Indemnification Agreement with Appellee. This Agreement required Appellant to

"immediately reimburse" Appellee for any sums paid to Ecosalud under the terms of the Bond and to pay
interest to Appellee on these sums "at the current banking interest rate in effect in Colombia." An amendment

to the Bond, dated May 15, 1992, provided for the automatic renewal of the policy at the end of each period
until one year after the expiration of the Lottery Contract. Another amendment, dated March 2, 1993,

extended the Bond's term of effectiveness through March 12, 1994.

    2
     This Part is drawn from the district court's unpublished opinion. See Seguros del Estado, S.A. v.
Scientific Games, Inc., No. 1:98-CV-968-CAM (N.D.Ga. Sept. 28, 1999) (order denying motion to
dismiss and granting summary judgment motion).
    3
    While the initial policy lists only Appellant as the contractor, the policy amendments list Appellant,
PKI Associates, and Daibutsu as contractors.
        On July 1, 1993, Ecosalud issued a Declaration of Caducity, Administrative Resolution No. 246 (the
Declaration).4 In this Declaration, Ecosalud terminated the Lottery Contract based on a determination that

the Contractors breached the Contract.5 Furthermore, Ecosalud found the Contractors and Wintech jointly

and severally liable and proclaimed Ecosalud was owed in excess of $4 million under the terms of the Lottery
Contract. Finally, Ecosalud stated in the Declaration that Appellee was jointly and severally liable for $4

million pursuant to the Bond. The Bond provides that "[a] casualty shall be deemed to have occurred[,] ... in

the event of breach of the contract, when the Administrative Resolution that declared the caducity of the
contract or the breach thereof for reasons attributable to the contractor is final and binding ...." The Bond

obligates Appellee, under these circumstances, to pay Ecosalud within a month following a request for

payment. Appellee received notice of the Declaration on July 7, 1993, and provided Appellant with written
notice on July 12, 1993.
        Pursuant to the request of Appellant and Appellee that it reconsider the Declaration, Ecosalud

confirmed the Declaration by issuing Administrative Resolution No. 493 on October 15, 1993.6 On March
15, 1994, Appellant challenged the Declaration and Resolution No. 493 in a Colombian administrative court

and sought temporary suspension of the Declaration during the appeal. In May 1994, the administrative court
denied the request for temporary suspension. The appeal remains pending.
        Following negotiations, Appellee reached a settlement with Ecosalud on September 29, 1994. The

settlement obligated Appellee to pay Ecosalud $2.4 million, in lieu of the contractually mandated sum of $4
million. On November 1, 1994, Appellee paid Ecosalud $2.4 million. The next day, Appellee notified
Appellant of this payment and demanded reimbursement pursuant to the Indemnification Agreement .7

    4
     According to Dr. Andrew Abela-Maldonado, an expert witness for Appellant, declaring caducity is a
unilateral "exercise of governmental powers reserved to Ecosalud as a governmental entity" under
Colombian law.
    5
     According to Dr. Abela, a witness for Appellant, see supra note 3, Ecosalud made this determination
based in part on Wintech's failure "to deliver on its promise of monopoly status for [the instant lottery],"
and, therefore, to sell the projected number of lottery tickets. Dr. Jorge Mora Sanchez, a witness for
Appellee, testified only that Ecosalud "declared the termination of [the Lottery Contract] for causes
imputable to [Appellant]."
    6
     There seems to be an inconsequential discrepancy in the record, as Appellant believes Ecosalud
issued Resolution No. 493 on October 3, 1993.
    7
     C. Gray Bethea, Jr., Appellant's General Counsel, testified that Appellant "was not given
contemporaneous notice ... of the private settlement entered into on September 29, 1994. We were just
informed of the payment. We received a copy of the Settlement Agreement in 1995."
Appellant failed to reimburse Appellee, thereby giving rise to this litigation.
          On April 2, 1998, Appellee filed suit in United States District Court, Northern District of Georgia,

seeking to recover from Appellant for breach of contract and unjust enrichment. On May 7, 1998, Appellee

filed a motion for summary judgment based on its breach of contract claim. Appellee sought a $2.4 million
reimbursement plus pre-judgment interest on that amount at the rate specified in the Indemnification

Agreement. On May 12, 1998, Appellant filed a motion to dismiss based on the statute of limitations or, in

the alternative, based on the legal doctrines of lis alibi pendens and forum non conveniens.8

          In its order dated September 28, 1999, the district court denied Appellant's motion to dismiss.

Concluding that Georgia law governs, the court held the suit was not barred by Georgia's 6-year statute of

limitations and that lis alibi pendens was inapplicable.9 The district court proceeded to grant Appellee's

motion for summary judgment. In so doing, the court concluded as follows: the Bond and Indemnification
Agreement were in effect when the Declaration was issued; Resolution No. 493 rendered the Declaration
"final and binding;" Appellee properly notified Appellant; Appellee's settlement with Ecosalud was

reasonable; and Appellant is liable to Appellee for reimbursement of the principal amount, plus interest. The
district court therefore ordered judgment for Appellee in the principal amount of $2.4 million, plus
pre-judgment interest at the annual rate of 38.76%. The district court interpreted "the normal banking interest

rate that is then in effect in Colombia[ ]"10 to mean the standard rate applied to pesos, noting that Appellant
knew when it executed the Bond and Indemnification Agreement "that payment was contemplated in United

States dollars." This appeal followed.
                                              II. DISCUSSION

A.        Motion to Dismiss

          Appellant asserts its motion to dismiss should have been granted since (1) the doctrine of lis alibi

pendens applies due to related, ongoing litigation in Colombia, and (2) a 2-year statute of limitations under

     8
     The forum non conveniens basis is not raised on appeal.
     9
     The district court also denied Appellant's motion to strike specified affidavits submitted by Appellee.
This issue is not raised on appeal.
     10
      There are some inconsequential differences between translations of documents submitted by the
parties into the record. For example, the Indemnification Agreement submitted by Appellant refers to
"the normal banking interest rate that is then in effect in Colombia," while the Indemnification Agreement
submitted by Appellee refers to "the current banking interest rate in effect in Colombia."
Colombian law had expired prior to the filing of this case. We affirm as to these issues.

1.        International Comity and Lis Alibi Pendens

          We review the district court's decision declining to apply the principle of lis alibi pendens for abuse

of discretion. See Philadelphia Gear Corp. v. Philadelphia Gear de Mexico, S.A., 44 F.3d 187, 191 (3d

Cir.1994); Allstate Life Ins. Co. v. Linter Group Ltd., 994 F.2d 996, 999 (2d Cir.1993). Lis alibi pendens

is a doctrine rooted in international comity which permits a court to refuse to exercise jurisdiction in the face

of parallel litigation that is ongoing in another country. Cf. Hilton v. Guyot, 159 U.S. 113, 163-64, 16 S.Ct.

139, 143, 40 L.Ed. 95 (1895) (defining "comity of nations"); Turner Entm't Co. v. Degeto Film, 25 F.3d

1512, 1518 (11th Cir.1994) (discussing doctrine of international abstention where foreign court has rendered
final decision on the merits, but has not issued final judgment).

          Appellant argues the district court should have stayed this case in the face of the suit challenging the

Declaration which is pending before a Colombian administrative court. See supra, Part I. Specifically,

Appellant argues the invalidation of the Declaration by the Colombian court would render Appellee's

indemnification claim baseless, as Appellee would have no obligation to pay on the Bond. According to
Appellant, the central issue in both this case and the Colombian case is the validity of the Declaration, and

Appellee and Appellant are parties to both suits and are bound by the result of both suits.11 Deciding this
case, therefore, would effectively decide the pending Colombian case and violate principles of international

comity. Appellant also argues that, if this Court affirms the district court's judgment and the Colombian court
subsequently invalidates the Declaration, staying this case would avoid "a meaningless cycle of round-robin

litigation" in which Appellant would have to sue Ecosalud for recovery of its reimbursement to Appellee.

Finally, Appellant maintains this Court should invoke lis alibi pendens here as we did in a related case. See

Empresa Colombiana de Recursos Para La Salud, S.A. v. Scientific Games, Inc., No. 97-8374 (11th Cir.

Jan.27, 1998), 136 F.3d 142 (11th Cir.1998) (table).

          The issue here is whether the district court abused its discretion in declining to invoke the doctrine

of lis alibi pendens. We conclude it did not.

     11
       Appellant's attorney, Dr. Andrew Abela-Maldonado, testified in his sworn affidavits that Appellee
was found by the Colombian court to have a "direct interest" in the pending litigation, has intervened, and
is entitled to file motions, request evidence, and set forth its procedural position. The "motion" filed by
Appellee is its version of the facts in the Colombian case; it is not a request for judicial action. It also
includes Appellee's acknowledgment that it has been summoned as a "joint litigant" and its statement that
it "agrees with what will be proved at trial and with the judgment that resolves the dispute ...."
         The application of lis alibi pendens turns on whether a court "should exercise its jurisdiction where

parallel proceedings are ongoing in a foreign nation ...." Turner, 25 F.3d at 1518 (emphasis added). The

threshold question, therefore, is whether this case is parallel to the ongoing case in Colombia. See Finova

Capital Corp. v. Ryan Helicopters U.S.A., Inc., 180 F.3d 896, 898 (7th Cir.1999). We conclude the two cases

are not parallel since they involve materially different issues, documents, and parties.

         At issue in the Colombian case is the validity of the Declaration and, therefore, whether Appellant
breached the Lottery Contract and whether Ecosalud properly invoked Clauses 42 and 43 of the Lottery

Contract. These clauses provide the bases for which Ecosalud may declare caducity and demand payment

of the penalty. By contrast, at issue in this case is whether Appellee is entitled to reimbursement from

Appellant under the terms of the Indemnification Agreement and, by reference, the terms of the Bond. Thus,

while this case has been precipitated by Ecosalud's issuance of the Declaration, it does not directly involve

the validity of the Declaration or the Lottery Contract.

         Furthermore, the outcome of this case will not affect the outcome of the Colombian case, as Appellant

claims. This case will determine only whether the penalty sum will be outlaid by Appellant rather than by
Appellee. In other words, if Appellee prevails, the risk of the overall transaction would be transferred from

Appellee to Appellant. A decision in this case would not, therefore, effectively decide the outcome of the
litigation currently pending in Colombia.12
         Next, the parties are not the same. While Appellant's expert, Dr. Andrew Abela-Maldonado, testified

in his affidavits that Appellee intervened in the Colombian case and filed a "motion," see supra note 9, the

attorney who submitted a filing for Appellee in the Colombian litigation, Dr. German EspinosaRestrepo,

testified in a deposition that Appellee was not a party in the Colombian case. Rather, Dr. Espinosa testified
that Appellee, as a third party with a relationship to the subject matter in litigation, was summoned into the

action to state its position in the suit. Dr. Espinosa testified that Appellee, in its filing with the Colombian

court, stated that "it has no relationship whatsoever with this action because its rights that arose in the

payment of the obligation will be pursued against [Appellant] both based in the subrogation action [permitted

    12
      We note that, should the Colombian court invalidate the Declaration, the court would have the
option of immediately ordering Ecosalud to reimburse Appellant for its outlay. It would be feasible for
the Colombian court to impose this remedy since Ecosalud and Appellant are the parties before it, and
these parties should have notified the Colombian court of this Court's affirming the district court's
judgment. This option would eliminate the need for Appellant to sue Ecosalud for reimbursement, as
argued by Appellant.
under Colombian law] or based on the indemnity agreement like in this case in the United States." The text

of the filing bears out this characterization: "By virtue of the insurer's right of subrogation established by

Article 1098 of the Colombian Commercial Code, and the utilization of the counterguarantee [i.e.,

Indemnification Agreement] issued by [Appellant], [Appellee] is attempting to collect at said company's

domicile (Alpharetta—Atlanta, Georgia, USA)." Another expert for Appellee, Dr. Jorge Mora Sanchez,

similarly declared that Appellee is not a party to any litigation between Appellant and Ecosalud in Colombia.
Upon reviewing the expert legal testimony on both sides, we conclude Appellee is not an integral party in the

pending Colombian litigation.

           Finally, we draw a contrast between this case, where lis alibi pendens is not applicable, and two cases

cited by Appellant where the doctrine was applicable. First, Empresa Colombiana de Recursos Para La

Salud, S.A. v. Scientific Games, Inc., No. 97-8374 (11th Cir. Jan.27, 1998), and a pending Colombian case

dealt with the same issue—whether Ecosalud has the right to enforce the Executable Document, required

under Clause 27(3) of the Lottery Contract. See Empresa Colombiana de Recursos Para La Salud, S.A. v.

Scientific Games, Inc., No. 1:96-CV-1586-FMH at 19-20 (N.D.Ga. Mar. 17, 1997) (order granting motion

to dismiss complaint and amended complaint based in part on lis alibi pendens ). These cases also directly

involved the same parties—Appellant and Ecosalud. Similarly, Posner v. Essex Ins. Co., 178 F.3d 1209 (11th

Cir.1999), and an ongoing suit in Bermuda involved the same issue—the validity and therefore the effect of

homeowner insurance policies—and the same parties—a homeowner and an insurance company. See id. at

1213. This case and the pending Colombian case directly involve neither the same issues nor the same
parties.

           For the reasons stated above, we conclude the district court did not abuse its discretion in declining

to stay this case based on the doctrine of lis alibi pendens.

2.         Statute of Limitations

           The district court's interpretation of foreign law is a question of law reviewed de novo. See United

States v. Gecas, 120 F.3d 1419, 1424 (11th Cir.1997); see also Fed.R.Civ.P. 44.1 ("The court, in determining

foreign law, may consider any relevant material or source ... whether or not submitted by a party .... The

court's determination [of foreign law] shall be treated as a ruling on a question of law."); id. cmt. ("There

is no requirement that the court give formal notice to the parties of its intention to engage in its own research

on an issue of foreign law which has been raised by them .... [A]ppellate review [on a question of foreign law]
will not be narrowly confined by the 'clearly erroneous' standard of [Fed.] Rule [Civ. P.] 52(a).").

         Colombian law provides that general enforcement proceedings must be brought within 10 years of

the act giving rise to the cause of action. See Colombian Civil Code § 2536. Colombian law further provides

that "ordinary" actions derived from an insurance contract or the provisions governing it must be brought
within 2 years from when the interested party knew or should have known of the facts on which the action

is based. See Colombian Commercial Code on Insurance § 1081. Under Georgia law, an action for breach

of contract must be brought within 6 years of the alleged breach. See Ga.Code Ann. § 9-3-24 (1982 &

Supp.2000).

         Appellant contends the 2-year statute of limitations under Colombian law for insurance claims applies

to this action. Appellant first argues for the application of Colombian law, generally. Appellant then cites

the sworn affidavit of Dr. Abela for the proposition that the Colombia Supreme Court of Justice held the 2-
year statute of limitations applies to all actions derived from or related to insurance contracts. Appellant
argues the 2-year limitation period covers the Indemnification Agreement since it applies broadly to all

insurance-related contracts and since "[n]othing could be more intertwined with insurance than a claim by
an insurer against the policy holder, triggered by the payment of a claim to a third party." Appellant
submitted at oral argument that the fact that the Indemnification Agreement and the Bond were written on

two separate pieces of paper should not control, since the Indemnification Agreement could have been
included as a clause in the Bond contract. According to Appellant, the 2-year statute of limitations bars
Appellee's claim since Appellee's payment to Ecosalud, which occurred on November 1, 1994, is the latest

possible event giving rise to the suit, and the suit was filed on April 2, 1998, more than 2 years later.
         Appellee claims Georgia law and its 6-year limitations period apply. Under this theory, Appellee's

suit is not barred.13 The district court agreed with Appellee's point of view, concluding Georgia's 6-year
statute of limitations applies.

         We begin with the question of whether the 2-year or the 10-year Colombian statute of limitations

would apply to this case, assuming arguendo that Colombian law applies. Dependent as we are on legal

experts to determine which of the Colombian statutes of limitation apply, see generally Eastern Airlines, Inc.

v. Floyd, 499 U.S. 530, 539-40, 111 S.Ct. 1489, 1495-96, 113 L.Ed.2d 569 (1991), we observe a "battle of

    13
     Similarly, under Colombia's 10-year statute of limitations for general enforcement proceedings,
Appellee's suit would not be barred.
the experts" in the record. Dr. Abela takes the position that the 2-year statute of limitations applies broadly

to all insurance-related suits. Furthermore, he asserts that this case is insurance-related since it involves an
insurance company suing its insured for reimbursement under an indemnification agreement. Dr. Abela

therefore concludes the 2-year statute of limitations applies to this case. According to Dr. Abela, the

Colombia Supreme Court of Justice "held that Section 1081 of the Colombian Commercial Code on Insurance

[including the 2-year statute of limitations] applies to all actions that had their support in an insurance
contract, whether seeking the satisfaction of the right, or right related to the insurance contract or related to

its enforcement or seeking clarification or recognition of the insurance contract." Furthermore, the Supreme
Court of Justice "made special note of the independence and special application of [the 2-year statute of

limitations] to the prescription of all actions derived from insurance contracts." Dr. Abela cites another

decision of the Colombia Supreme Court of Justice which, he testifies, specifies that insurance companies,
such as Appellee, are entities that derive rights from insurance contracts under § 1081. According to Dr.
Abela, since the 2-year statute of limitations applies to actions "derived or related to insurance," Appellee's

claim is barred.
        By contrast, Dr. Espinosa takes the position that the 10-year statute of limitations applies. In his

view, the Indemnification Agreement is not an insurance contract, should be treated as a general contract, and
is therefore governed by § 2536 of the Colombian Civil Code. In his sworn deposition, Dr. Espinosa explains
the Indemnification Agreement is not an insurance contract since it was not issued by an insurance company

and does not include an obligation to compensate if a loss is suffered. According to Dr. Espinosa, the
Indemnification Agreement is a private contract whose reference to the Bond in no way subjects it to the

Insurance Code. In fact, Dr. Espinosa explains the Indemnification Agreement cannot be governed by the
Insurance Code since insurance contracts are governed exclusively by the Insurance Code and cannot be

modified by a private contract. The Indemnification Agreement, as a private contract, is therefore by

definition outside the scope of the Insurance Code. In his deposition, Dr. Espinosa expressly disagrees with
Dr. Abela's opinion.

        Based on our review of this conflicting expert testimony in the record, we conclude the 10-year

statute of limitations would apply to this case, assuming arguendo that Colombian law governs. We view

the Indemnification Agreement as separate and distinct from the Bond. We conclude that the reimbursement
claim under the Indemnification Agreement is not intertwined with the insurance claim under the Bond.14 We

decline to consider the possibility that the Indemnification Agreement could have been integrated with the

Bond contract. Further, we view the Indemnification Agreement as a generic reimbursement contract that
happens to be precipitated by the execution of a separate insurance contract, the Bond. The Indemnification

Agreement lacks the elements that characterize an insurance contract, such as issuance of a policy by an

insurance company to an insured party, an insured party's obligation to pay a premium, and an insurance
company's obligation to compensate for a covered loss. We understand the clause, "actions derived from an

insurance contract or the provisions governing it," to mean litigation arising from a relationship founded on

an agreement that bears the foregoing, traditional makings of an insurance contract. Colombian Commercial
Code on Insurance § 1081. To say that litigation premised on a contract where the insured is obligated to

reimburse an insurance company—the opposite of the conventional insurance relationship—is covered by

§ 1081 of the Insurance Code would be to assign to this statute too attenuated an interpretation.15
          We therefore conclude the Colombian 10-year statute of limitations, rather than the 2-year statute of
limitations, would apply to this case, on the assumption that Colombian law governs this case. Based on this

conclusion, we need not reach the question of whether Colombian or Georgia law applies. This case is not
barred under either Colombia's 10-year limitation period or Georgia's 6-year limitation period.

B.        Motion for Summary Judgment

     14
     We assume arguendo, as asserted by Appellant, that the Bond is characterized as an insurance claim
under Colombian law.
     15
       We note our review—or attempted review—of decisions of the Colombia Supreme Court of Justice
cited by Dr. Abela. The case cited by Dr. Abela in ¶ 30 of his affidavit, dated May 8, 1998, and included
in the record in English translation, discusses against whom and under what circumstances the 2-year
ordinary and 5-year extraordinary statutes of limitation run pursuant to § 1081 of the Insurance Code. See
Statute of Limitations in Insurance Contracts, Colombia Supreme Court of Justice, Civil Section, Dr. Jose
Maria Esguerra-Samper, Justice in Charge (July 4, 1977). In the course of this discussion, the court
explains that the event that triggers the limitations period "is not and cannot be anything other than the
loss, which is defined in Article 1072 as 'the realization of the insured risk,' i.e., the occurrence of the
future or uncertain act the occurrence of which gives rise to the insurer's obligation to indemnify and
correspondingly to the insured or beneficiary's right to receive the indemnification ...." Id. at 1. In stating
that a loss giving rise to an insurance claim is the only event that can trigger the 2-year limitations period,
the Colombia Supreme Court of Justice strongly implies that § 1081 applies solely to conventional
insurance contracts and policies, and not to those merely precipitated by or related to insurance contracts,
like the Indemnification Agreement.

                   The case cited by Dr. Abela in ¶ 25 of his affidavit dated May 8, 1998, see Contracto de
          Seguro, Prescripcion de Acciones, Colombia Supreme Court of Justice, Civil Section, Dr. Alberto
          Ospina-Botero, Justice in Charge (Mar. 4, 1989), seems not to have been submitted into the
          record. More significantly, it has not been submitted into the record in English translation. We
          are therefore unable to consider this case.
         We review de novo the district court's grant of summary judgment, applying the same standard as

the district court. We view all evidence and factual inferences reasonably drawn from the evidence in the

light most favorable to the non-moving party, here, Appellant. See St. Charles Foods, Inc. v. America's

Favorite Chicken Co., 198 F.3d 815, 819 (11th Cir.1999). "Summary judgment is appropriate when there

are no genuine issues of material fact and the movant is entitled to judgment as a matter of law." McCaleb

v. A.O. Smith Corp., 200 F.3d 747, 750 (11th Cir.2000) (citing Fed.R.Civ.P. 56(c)).

        Appellant argues this case presents several issues of fact which preclude the entry of summary

judgment. The purported issues of fact are as follows: (1) whether the term of the Bond was renewed and,

therefore, in effect when the Declaration of Caducity was issued; (2) whether the Indemnification Agreement
was in effect when the Declaration was issued; (3) whether Appellee was obligated to pay under the terms

of the Bond; and (4) whether Appellee's settlement with Ecosalud was reasonable as a matter of law. We
address each asserted issue of fact and conclude no issue of material fact has been raised. We affirm the grant

of summary judgment and the principal judgment in the amount of $2.4 million.

1.      Renewal of Bond

        Appellant argues that Appellee renewed the term of the Bond without authorization from Appellant,
thereby unilaterally increasing the scope of the risk Appellant faced under the Indemnification Agreement.
Appellant also claims Appellee sought additional security from Appellant as a condition to renewing the
Bond. Appellant argues this unilateral risk increase and demand for additional security preclude Appellee's

claim that Appellee had an obligation to renew the Bond automatically. Appellant next cites Ecosalud's
apparent threat to cancel the Lottery Contract as evidence that the Bond was not meant to renew
automatically. According to Appellant, the Bond could not have been renewed since Appellant did not supply

additional security and did not pay a premium for the Bond. It follows that there is at least a question of fact

as to whether the Bond was in effect when the Declaration was issued.

        Appellee argues both parties agreed to an amendment to the Bond, dated May 15, 1992, under which
the Bond automatically renewed every year that the Lottery Contract remained in effect, as well as the year

following the contract's expiration. According to Appellee, this amendment brought the Bond into

compliance with Clause 41(a) of the Lottery Contract. Appellee explains that Wintech, the entity created by

Appellant and two other companies to implement the Lottery Contract, paid the premium for the renewed
Bond. Since performance of the Lottery Contract required the maintenance of the Bond, Wintech had the
contractual obligation, and thus express authority from Appellant, to pay for the Bond's renewal. Appellee

contends Appellant's allegations that Appellee sought additional security and that Ecosalud threatened to
cancel the Lottery Contract are irrelevant in light of the express contractual provisions. According to

Appellee, no terms beyond those in the amendment were added to the Bond, and it was properly renewed in

accordance with its existing terms.

         We agree with Appellee that there is no factual question as to whether the Bond was renewed. We

have reviewed the affidavit of C. Gray Bethea, Jr., Appellant's General Counsel, wherein Mr. Bethea declared
under oath that Wintech sought to have Appellant sign a blank promissory note as a condition to obtaining

a new Bond and that Appellee, through Wintech, sought other assurances from Appellant that it would issue
security to Appellee. Mr. Bethea declared, "[Appellant] did not agree to renew or replace the security for the

Guarantee Bond, nor did [Appellant] pay the premium for the new bond." We have also reviewed a letter

from Wintech to Appellant which mentions Ecosalud's alleged statement that it would cancel the Lottery
Contract if the Bond was not renewed shortly.

         Parol evidence such as that described above, however, cannot be considered in the face of an

unambiguous, written guaranty agreement. See Rizk v. Jones, 148 Ga.App. 473, 251 S.E.2d 360, 361 (1978)

("The cases are legion that a complete and unambiguous instrument cannot be varied or contradicted by

reliance upon inconsistent parol statements.") (internal quotation marks and citations omitted), aff'd, 243 Ga.

545, 255 S.E.2d 19 (1979); Health Serv. Ctrs. v. Boddy, 257 Ga. 378, 359 S.E.2d 659, 661 (1987) ("Where

the terms of a written contract are clear and unambiguous, the court will look to the contract alone to the find

the intention of the parties."); American Viking Contractors, Inc. v. Scribner Equip. Co., 745 F.2d 1365,

1371 (11th Cir.1984) (applying Georgia law); see also In re Stratford of Texas, Inc., 635 F.2d 365, 368 (5th

Cir.1981) ("Ordinarily, we should glean the contract's meaning without resorting to extrinsic evidence in

accordance with the principle that the language of an agreement, unless ambiguous, best represents the
intention of the parties.").16 Since the text of the amendment whereby Appellee promised to renew the Bond
automatically is unambiguous, we decline to consider Mr. Bethea's affidavit and Wintech's letter to

    16
      The parol evidence rule is a substantive rule of law to which the Erie doctrine applies. See, e.g.,
MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova d'Agostino, S.p.A., 144 F.3d 1384, 1388-89 (11th
Cir.1998); Conway v. Chem. Leaman Tank Lines, Inc., 540 F.2d 837, 839 (5th Cir.1976); Schewe v.
Bentsen, 424 F.2d 60, 62 (5th Cir.1970). This Court has not been advised of any contrary legal doctrine
in Colombia which would apply in this case.
Appellant.17 This amendment, dated May 15, 1992, provides, "[Appellee] promises to automatically renew

this policy at the end of each period until the end of the term of effectiveness of [the Lottery Contract],
entered into with Ecosalud, S.A. and one year more, including the extensions thereof. The taker [Wintech]

promises to pay the respective premiums." This amendment unambiguously obligated Appellant and

Appellee to renew the Bond automatically every year until the expiration of the Lottery Contract, plus one

year. The Lottery Contract was to remain in effect through June 12, 1997, under Clauses 2 and 68 of the
Contract. In fact, the record shows the parties complied with this amendment by agreeing to another

amendment, dated March 2, 1993, by which they extended the Bond for another year, from March 12, 1993,
through March 12, 1994. Under the express terms of these amendments, the Bond was in effect when the

Declaration of Caducity was issued on July 1, 1993.

         Moreover, the amendment obligating the automatic renewal of the Bond was expressly agreed to in
compliance with Clause 41(a) of the Lottery Contract. This clause provides, "This bond shall remain in effect
for the entire term of this Agreement, including any extensions thereof, and for one additional year." As

noted above, the Lottery Contract was to be effective through June 12, 1997. Appellant's apparent belief that
the Bond need not have been renewed is therefore questionable under the express terms of the Lottery

Contract to which Appellant was a party.
         As to Appellant's question of how the Bond was renewed, Appellant concedes that "[t]he evidence
suggests, but does not confirm, that Wintech paid the premium for the Bond ...." We agree that Wintech paid

the premium, since Appellant, PKI Associates, and Daibutsu, Inc., the companies that formed Wintech, are
listed as the contractors on the Bond amendment that extended the Bond through March 12, 1994.

         Appellant argues, however, that Wintech was not a party to the Bond and was not insured by it. This
argument appears to be based on the fact that only Appellant is listed as the contractor for the Bond policy

dated March 12, 1992, and effective from that date to March 12, 1993. However, this policy had expired

when the Declaration of Caducity was issued on July 1, 1993. At that time, the effective policy was the
amendment extending the Bond through March 12, 1994, and Appellant, PKI, and Daibutsu are all listed as

contractors on this document. Furthermore, Clause 41 of the Lottery Contract required Appellant, PKI, and

    17
      In any case, we note Mr. Bethea's affidavit discusses only Appellee's seeking to effect changes in
the terms of the Bond; it does not refer to any actual changes to these terms. Additionally, we fail to see
the significance of Ecosalud's apparent belief that the Bond would not be automatically renewed, as
Ecosalud is not a party to the Bond.
Daibutsu to furnish a Bond which was required to remain effective through June 12, 1998. We conclude that
the Bond was properly renewed, and there is no question of material fact as to whether the Bond was in effect

when the Declaration of Caducity was issued.

2.        Effectiveness of Indemnification Agreement
          Appellant argues the Indemnification Agreement had a term of one year, and the absence of an

automatic renewal provision in the Agreement should be construed to limit the Agreement to this term.

Appellant claims it never consented to an extension of the Agreement, and nothing on the face of the

Agreement would permit Appellee to extend the term of the Agreement unilaterally. According to Appellant,

it is therefore questionable whether the Indemnification Agreement was in effect when the Declaration of
Caducity was issued.
          Appellee argues the express language of the Indemnification Agreement ties its term of effectiveness

to that of the Bond. The extension of the term of the Bond therefore extended the term of the Indemnification
Agreement.

          We agree with Appellee. The Indemnification Agreement provides, "The validity of this document
shall be broad, and it shall remain in effect for a term equal to that of the bonds issued by [Appellee] ." The
Bond was extended through March 12, 1994, and Appellee was obligated to automatically renew it on an

annual basis through June 12, 1998. See supra Part II.B.1. According to its express language, the

Indemnification Agreement was likewise extended through March 12, 1994, and subject to automatic renewal.
The Indemnification Agreement was therefore in effect when Ecosalud issued the Declaration of Caducity.18

3.        Obligation to Pay Under the Bond
          The Indemnification Agreement requires Appellant "to immediately reimburse [Appellee] for any

     18
       Appellant argues that reaching this conclusion would require us to improperly "revise or
supplement an agreement under the guise of contract construction." Sosebee v. McCrimmon, 228
Ga.App. 705, 492 S.E.2d 584, 586 (1997). In Sosebee, the contract expressly mentions one specific
situation, while the case involves a wholly different situation about which the contract is silent. Id. Here,
by contrast, the Indemnification Agreement broadly states its term of effectiveness, without excluding any
specific circumstances.

                   As discussed above, see Part II.B.1, parol evidence cannot to be considered in the face of
          an unambiguous, written agreement. See Rizk, 251 S.E.2d at 361; Health Serv., 359 S.E.2d at
          661; American Viking, 745 F.2d at 1371; see also Stratford, 635 F.2d at 368. We therefore do
          not address the testimony of Dr. Abela in his third affidavit that the term of the Indemnification
          Agreement "would be equal to the term of the Guarantee Bond issued by [Appellee], that is one
          year." Neither do we consider Mr. Bethea's affidavit testimony that "[a]t no time did I ever think
          that the Indemnity Agreement extended beyond the one-year term of the Guarantee Bond."
sums that it pays to ... ECOSALUD, in accordance with the terms of ... [the Bond] as indemnification for

losses and any other expenses or costs derived from said Performance Bonds." The Bond requires Appellee
to pay Ecosalud when an issued Declaration of Caducity becomes "final and binding." The question,

therefore, is whether the Declaration of Caducity is "final and binding," thereby obligating Appellee to pay

Ecosalud under the terms of the Bond and, in turn, obligating Appellant to reimburse Appellee under the

terms of the Indemnification Agreement. As discussed above, see Part I, Ecosalud issued a Declaration of

Caducity, Resolution No. 246, on July 1, 1993, and affirmed this Declaration with Resolution No. 493, on

October 15, 1993.

        Appellant first argues the Declaration of Caducity cannot be final since it is subject to the outcome
of a pending administrative proceeding initiated by Appellant and Wintech in Colombia. Second, Appellant

argues the Declaration was not final and Appellee did not have an obligation to pay Ecosalud $4 million since

Appellee's property was never subject to imminent foreclosure. Specifically, Ecosalud never took formal
action to seize or foreclose upon Appellee's property. Even were Appellee's property subject to seizure,
Ecosalud would have had to initiate a foreclosure proceeding in the Colombian Special Courts and obtain an

administrative order. Appellant believes that, during this process, Appellee would have had the opportunity
to defend against foreclosure by posting a bond or a deposit in court. Appellant also contends Appellee could
have sought a stay of any potential enforcement of the Declaration.
        Appellee argues that, at the time it made payment to Ecosalud, the Declaration of Caducity was final
and subject to execution. Appellee had the right, under Colombian law, to appeal the Declaration and, in fact,

initiated such an appeal. According to Appellee, the Declaration became final and subject to execution when
Ecosalud confirmed the Declaration by issuing Resolution No. 493. Appellee contends the pending litigation

challenging the Declaration does not affect the Declaration's finality. In Appellee's view, only the entry of

a stay would do so, and the Colombian administrative judge declined to issue a stay in this case.

         Based on our review of the expert testimony in the record, we agree with Appellee. In support of
Appellee's position, Dr. Ramon del Villar, a legal expert for Appellee, declared:

        When Resolution 0246 was affirmed by Resolution 0493, it became[ ] firm, final and subject to
        execution by itself.... This possibility of execution ... was not stayed because those resolutions were
        being challenged in an administrative tribunal.... I consider that once the administrative ruling
        became final, [Appellee] had to pay the amount agreed on the policy .... After the Tribunal denied
        the temporary stay, [Appellee] was under an even greater pressure to pay Ecosalud to prevent
        execution and therefore attachment of its property.

Dr. Carlos Betancur Jaramillo, another legal expert for Appellee, similarly testified that Resolution No. 493
rendered the Declaration final and executable. In his words, "As soon as the Resolution No. 246 was made

final by a decision of [Resolution No.] 493, the act acquired executory right and it could be used to execute
the debtors ." Dr. Betancur explained that Resolution No. 246 was not final and enforceable prior to the

issuance of Resolution No. 493. Dr. Jorge Mora Sanchez likewise averred that as a result of the issuance of

Resolution No. 493, Resolution No. 246 "became final and subject to execution.... [Therefore,] the assets of

[Appellee] ... were subject to levy and seizure if [Appellee] did not pay the US$ 4,000,000."
          Appellant relies heavily on the testimony of Dr. Abela to support its position that the Declaration was

not final when Appellee made payment to Ecosalud. Nowhere, however, did Dr. Abela state that Resolution

No. 246 was not final subsequent to the issuance of Resolution No. 493. Dr. Abela testified that an
"administrative act could be subject to a judicial challenge before the competent administrative courts, which

will, ultimately, decide on its validity." In addition, Dr. Abela explained, "[T]hese administrative acts are

bound to the final outcome of said litigation [challenging the validity of the Declaration of Caducity], which
is still in process." Although Dr. Abela testified that, subsequent to Ecosalud's dismissal of Appellee's

challenge to the Declaration, the administrative courts can determine whether the Declaration is valid, he did

not claim that such a judicial challenge renders the Declaration not final. We therefore deem Dr. Abela's

testimony consistent with our conclusion that Resolution No. 493 rendered the Declaration "final and
binding," albeit subject to the outcome of the pending litigation. We conclude there is no factual issue as to
whether Appellee was obligated to pay Ecosalud under the terms of the Bond.19

4.        Reasonableness of Settlement
          Appellant argues a factual question persists as to whether Appellee's settlement with Ecosalud for
payment of $2.4 million was reasonable, since negotiations were allegedly conducted without Appellant's

notification or participation. Appellant claims it was notified of the settlement only after the negotiations

concluded.

          Appellee argues it was obligated to pay Ecosalud $4 million upon the issuance of Resolution No. 493,

     19
       We determine Appellant misses the point in arguing the Declaration was not final because
Appellee's property was not subject to imminent foreclosure and, in any event, Appellee would have had
various opportunities to resist such foreclosure. Once the Declaration became final and enforceable upon
the issuance of Resolution No. 493, Appellee was obligated to Ecosalud for $4 million, regardless of the
steps Ecosalud took to enforce this payment and regardless of the optional recourses available to
Appellee. Appellee owed Appellant no duty to delay meeting its obligation to Ecosalud. In any case,
Appellee did initiate a challenge to the Declaration. In the mean time, Appellee acted properly and
responsibly in meeting its obligation to Ecosalud pursuant to the Declaration of Caducity.
and its negotiated settlement with Ecosalud was an effort to mitigate its damages. Appellee maintains that,

absent the settlement, it would be seeking a reimbursement of $4 million, not $2.4 million. Appellee believes
this reduction in liability to be reasonable, as it benefits both Appellee and Appellant. Appellee explains that,

after the Declaration was issued, it notified Appellant that Appellee's property was subject to attachment.

Furthermore, after Resolution No. 493 was issued, Appellee notified Appellant that the obligation was
payable.20

         We agree with Appellee that the settlement was reasonable. Appellant cites the rule that "an

indemnitee, after giving the indemnitor notice and an opportunity to defend, could settle a lawsuit and claim

indemnity upon a showing that the decision to settle was reasonable." Southern Ry. v. Georgia Kraft Co.,

823 F.2d 478, 480 (11th Cir.1987). This rule does not apply here. This principle governs only where there

is a lawsuit filed by a third party against an indemnitee, and the indemnitee settles with the third party and

demands payment from the indemnitor. See id. In other words, the rule applies only where a claim has been

filed against the indemnitee, but no final judgment has been entered against the indemnitee. In such

situations, as in Southern Railway, absent the settlement, there would be no current obligation to pay the third

party and thus no current indemnification obligation.           The indemnitee, therefore, must show the

reasonableness of the settlement to guard against the possibility that the indemnitee could increase the
obligation of the indemnitor for the benefit of the indemnitee.21
         Here, by contrast, a final and executable obligation to pay Ecosalud $4 million was imposed on

Appellee, the indemnitee. See supra Part II.B.3. Due to Appellee's obligation to pay, Appellant was obligated

to indemnify Appellee for the full $4 million Appellee expended. We conclude that Appellee's settlement

with Ecosalud, which reduced Appellee's obligation to Ecosalud from $4 million to $2.4 million, was
inherently reasonable with respect to Appellant, since this reduction in Appellee's obligation reduced, in turn,
Appellant's obligation to Appellee from $4 million to $2.4 million. The key here is that, absent the

settlement, Appellant would have been obligated to Appellee in the amount of $4 million. Under these

circumstances, Appellee need not make an explicit showing of reasonableness. Appellee also was not

    20
     We note that Appellant does not acknowledge Appellee's notification subsequent to the issuance of
Resolution No. 493, nor does Appellee mention its post-settlement demand for reimbursement from
Appellant.
    21
      For example, the indemnitee could settle a case that would likely have been won on the merits in
order to avoid the disturbance and expense of litigation.
obligated to notify Appellant that settlement negotiations had begun or to accept Appellant's input in the

settlement process, as was required in Southern Railway.22

C.        Interest Judgment

          Contract interpretation without resort to parol evidence is a question of law reviewed de novo. See

Luckie v. Smith Barney, Harris Upham & Co., 999 F.2d 509, 512 (11th Cir.1993); Stratford, 635 F.2d at 368.

Based on its interpretation of the interest provision in the Indemnification Agreement, the district court

ordered Appellant to pay interest on the $2.4 million principal judgment at an annual rate of 38.76%, which

was the Colombian bank interest rate for pesos on November 1, 1994, the date of Appellee's payment to
Ecosalud.

          Appellant argues that applying the 38.76% rate to dollars, rather than to pesos, grants Appellee a

windfall. Appellant maintains the judgment day rule, which governs obligations in foreign countries and in
foreign currencies, should apply, as the transaction occurred in Colombia, and Ecosalud recognized the
receipt of funds in pesos. Under this approach, the district court would have applied the 38.76% interest rate

to the pesos equivalent of $2.4 million and then converted the sum of principal plus interest into dollars as
of the date of judgment. The effective interest rate would then be 4.22%. Alternatively, if Appellee is correct

that Appellant was obligated to pay in U.S. dollars, Appellant argues a dollar transaction should carry a
different interest rate than a peso transaction. The interest judgment should, therefore, be set aside due to
Appellee's failure to prove the Colombian bank interest rate on dollar transactions.

          Appellee argues the district court's application of the 38.76% rate to dollars should be affirmed.
Appellee contends the payment should be considered in terms of dollars and the judgment day rule should

not apply. Appellee points out, inter alia, the Indemnification Agreement references sums paid under the

Bond which states the insured amount as "US$ 4,000,000," and Ecosalud's official receipt references a check

for 1.00626 billion pesos exchanged for $1.2 million, and two checks for $300,000 and $900,000,

respectively. Appellee next argues the interest rate unambiguously set forth in the Bond is 38.76%—the

Colombian banking interest rate on November 1, 1994. Appellee contends the application of any other rate
would rewrite the Bond contract.

          We hold the district court erred in applying a 38.76% annual interest rate to the $2.4 million principal

     22
      We need not address Appellant's arguments that the Colombian Attorney General's failure to
approve the settlement supports the unreasonableness of the settlement and that there is no evidence in the
record regarding Appellee's alleged liquidity problems.
judgment. We reach the following conclusions: (1) the Bond and the Indemnification Agreement
contemplated payment in U.S. dollars, and (2) the applicable interest rate is therefore that which Colombian

banks would have applied to U.S. dollar deposits on November 1, 1994. Our conclusions are grounded

wholly in the language of the Bond and the Indemnification Agreement.
         First, we conclude these contracts require Appellant to reimburse Appellee in U.S. dollars. The

Indemnification Agreement provides, "[Appellant] agrees to immediately reimburse [Appellee] for any sums
that it pays to [Ecosalud] in accordance with the terms of ... the 'Performance Bonds' ...." Every Bond policy

issued sets forth "US$4,000,000" as the "Insured Amount" or the "Present Insured Amount." The express

terms of these agreements therefore show the payable amount in U.S. dollars. In light of this express
language, we attach no significance to the disputed intent of the parties, which is allegedly manifested in

Ecosalud's written receipt and Appellee's checks. See Rizk, 251 S.E.2d at 361; Health Serv., 359 S.E.2d at

661; American Viking, 745 F.2d at 1371; see also Stratford, 635 F.2d at 368. Given our conclusion that

reimbursement was required in dollars, we decline to apply the judgment day rule, as urged by Appellant.
         Second, the Indemnification Agreement provides, "The sums paid by [Appellee] to ECOSALUD in

accordance with the Performance Bonds shall accrue interest at the current banking interest rate in effect in

Colombia." The "current banking interest rate in effect in Colombia" may be different for peso deposits than
it is for U.S. dollar deposits. There is no valid reason that the "current banking interest rate" must denote one

numerical rate for all deposits, regardless of currency. The most straightforward way to understand "current

banking interest rate" is the interest rate a Colombian bank would apply, as a matter of course, to a deposit
of any given currency. From this record, we do not know the interest rate a Colombian bank would apply
to U.S. dollar deposits.23 We therefore remand for the district court to make this factual determination.24 We
hold the district court should apply the interest rate that a Colombian bank would have applied to a U.S. dollar

deposit on November 1, 1994. In so holding, we do not rewrite the Bond agreement; to the contrary, we

    23
      Appellee relies on testimony by Dr. Jorge Mora Sanchez in which he states, "The normal banking
interest rate in effect on 1 November 1994 in Colombia was 38.76 percent per annum." Since the
Indemnification Agreement is not ambiguous, we need not address this parol evidence. See Rizk, 251
S.E.2d at 361; Health Serv., 359 S.E.2d at 661; American Viking, 745 F.2d at 1371; see also Stratford,
635 F.2d at 368. Furthermore, we do not accept the premise underlying Dr. Sanchez's statement—that the
38.76% interest rate for pesos automatically applies to U.S. dollars as well.
    24
      It would make sense that Colombian banks do not apply the same interest rate to peso deposits as to
dollar deposits, and that Colombian banks take into account the dollar-peso exchange rate in determining
the interest rate applied to U.S. dollar deposits. Nevertheless, we make no assumptions here and remand
to the district court to make these factual findings.
fulfill its plain meaning.

                                             III. CONCLUSION
        As an initial matter, we affirm the district court's denial of Appellants' motion to dismiss. We

conclude the district court did not abuse its discretion in declining to stay this case based on the principle of

lis alibi pendens. Additionally, we conclude this case is not barred by the statute of limitations, regardless

of whether Colombian or Georgia law governs. If Colombian law governs, the 10-year statute of limitations
for general enforcement proceedings would apply. If Georgia law governs, the 6-year limitation period for

contracts would apply. Either way, this suit is not time barred.

        Reaching the merits, we affirm the district court's grant of summary judgment and its award of a
principal judgment in the amount of $2.4 million. We conclude Appellant failed to raise an issue of material

fact. Specifically, we determine the following: (1) the Bond was renewed; (2) the Bond and the

Indemnification Agreement were in effect when the Declaration of Caducity was issued; (3) Appellee was
obligated to pay under the Bond; and (4) Appellee's settlement with Ecosalud was reasonable.
        Finally, we conclude the district court erred in applying an annual, prejudgment interest rate of

38.76%. We therefore vacate the penultimate paragraph of Part III of the district court's order dated
September 28, 1999, the final 12 words of Part III of the order, the order's direction to enter judgment for
interest at an annual rate of 38.76%, and the judgment's award of interest at this rate. Furthermore, we
remand for the district court to determine the interest rate Colombian banks would have ordinarily applied
to a deposit of U.S. dollars on November 1, 1994, and to recalculate the interest judgment against Appellant

according to this rate.
        AFFIRMED IN PART, VACATED IN PART, AND REMANDED WITH INSTRUCTIONS.