The DC Circuit holds that it was bound by full faith and credit to reject Venezuela’s challenge to a $600+ million Award rendered against it.
We borrow heavily from the Opinion in Valores Mundiales, S.L. v. Bolivarian Republic of Venezuela, No. 23-7077 (D.C. Cir. Dec. 8, 2023): “The International Centre for Settlement of Investment Disputes (‘ICSID’) was established in 1966 by a multilateral convention designed to promote international investment. ICSID aims to fulfill the goal of its generating convention by providing reliable dispute resolution processes for member states and nationals of other member states.”
ICSID Award Enforcement
“However, ICSID is not authorized to enforce arbitration awards issued pursuant to its procedures. Rather, the parties to any such proceeding must rely on the courts of member states to enforce awards issued by an Arbitral Tribunal convened in accordance with the ICSID Convention. See ICSID Convention, art. 54, 17 U.S.T. 1270. Thus, as a signatory to the ICSID Convention, the United States has agreed that an ICSID award will ‘be given the same full faith and credit as if the award were a final judgment of a court of general jurisdiction of one of the several States.’ 22 U.S.C. § 1650a(a).”
This statute provides that:
“[t]he pecuniary obligations imposed by such an award shall be enforced and shall be given the same full faith and credit as if the award were a final judgment of a court of general jurisdiction of one of the several States.”
Section 1650a and the FAA
The Court finds that section 1650a limits a reviewing court’s power to disturb ICSID awards:
“Section 1650a contains further signals that Congress did not intend federal courts to re-open the merits of ICSID awards. The statute expressly forecloses collateral attack on ICSID awards in federal courts by excluding ICSID enforcement actions from the purview of the Federal Arbitration Act (‘FAA’), 9 U.S.C. §§ 1 et seq. See 22 U.S.C. § 1650a(a). The FAA allows an enforcing court to vacate an arbitral award where the award was tainted by fraud, corruption, or misconduct by the arbitrator. 9 U.S.C. § 10(a). By removing ICSID awards from the FAA’s purview, Congress rejected the possibility that the FAA’s grounds for vacatur could be applied to an ICSID award, thus reducing the scope of judicial review of ICSID awards below even the ‘extremely limited’ review available under the FAA” (citation omitted).
Award Must Be Enforced
“On the record before this court, it is clear that Valores’s ICSID awards against Venezuela are owed full faith and credit. No party contests the jurisdiction of ICSID or the authenticity of the awards rendered by the Arbitral Tribunal and the Annulment Committee. Following the Supreme Court’s elaboration of the full faith and credit standard, we look to whether ICSID would treat the award as binding. Neither the parties nor the record suggests otherwise. Based on a straightforward application of Section 1650a, the ICSID awards are enforceable against Venezuela” (citations omitted).
(ed: Seems right.)