DC District Court rejects Argentina's motions to set aside awards | Practical Law

DC District Court rejects Argentina's motions to set aside awards | Practical Law

Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), Lauren Mandell (Associate), White & Case LLP

DC District Court rejects Argentina's motions to set aside awards

Practical Law Legal Update 8-502-6680 (Approx. 2 pages)

DC District Court rejects Argentina's motions to set aside awards

Published on 30 Jun 2010USA
Abby Cohen Smutny (Partner) and Lee A. Steven (Counsel), Lauren Mandell (Associate), White & Case LLP
On 6 June 2010, the District Court for the District of Columbia rejected Argentina’s motions to set aside two UNCITRAL awards issued in favor of UK investors National Grid and BG Group. The awards, totaling US$280 million, were granted for measures enacted by Argentina during its 2001-2002 financial crisis that denied the investors fair and equitable treatment under the Argentina-UK bilateral investment treaty (BIT).
In Republic of Argentina v. BG Group PLC, (D.D.C. June 6, 2010), the court dismissed a litany of arguments made by Argentina attacking the arbitral award. First, the court rejected Argentina's challenges to the tribunal's interpretation of the BIT and other applicable law, finding that the tribunal provided a "colorable" justification for its interpretation. Second, the court rejected the argument that an arbitrator, Jan van den Berg, was biased, merely because he previously authored allegedly contradictory decisions on Argentina's defences under the BIT, which he failed to explain. The court noted that different facts could account for the different outcomes and added that the arbitrator was not obligated to disclose the basis of his decisions. Third, the court rejected the argument that similarity of witness statements submitted in the arbitration to witness statements submitted in previous cases indicated that the award was procured by fraud. Argentina provided no evidence that the witness signed their statements without subscribing to the facts stated therein.
The court's decision in BG Group PLC is an example of the difficulty of setting aside an award under the Federal Arbitration Act (FAA). The court acknowledged that "under a more searching, appellate-style of review" Argentina's arguments "could very well carry the day," but held that it had no choice but to deny the motion because of the limited review allowed under the FAA.
In Republic of Argentina v. National Grid, the court did not consider the merits of Argentina's motion to set aside, as it ruled that the motion was time-barred under the FAA because it was filed more than three months after the award was issued.
The court confirmed National Grid's award, but not BG Group's, because Argentina previously requested to reserve briefing on BG Group's motion to confirm. The court will hear arguments on BG Group's motion on 13 August 2010.