[00:00:01] Speaker 01:
It's number 18.

[00:00:03] Speaker ?:
I said 47.

[00:00:04] Speaker ?:
And it's holy study at L versus Republican.

[00:00:08] Speaker ?:
Mr. Franklin from the appellate.

[00:00:09] Speaker 03:
Mr. Bird.

[00:00:10] Speaker 03:
Good morning, Mr. Franklin.

[00:00:17] Speaker 03:
Good morning.

[00:00:19] Speaker 03:
Thank you, Your Honors, and may it please the Court.

[00:00:22] Speaker 03:
In my limited time today, I would like to focus on two clear legal errors made by the District Court, the first of which upheld an action that undermined the basic fairness of the underlying arbitration proceeding, and the second of which undermined the basic fairness of this confirmation proceeding.

[00:00:45] Speaker 03:
First, the Court held

[00:00:47] Speaker 03:
incorrectly held and aired as a matter of law in holding that the ground for non-enforcement set forth in Article 5.1d of the New York Convention was not met, even though the arbitral institution, the SCC, unilaterally commandeered Kazakhstan's right

[00:01:07] Speaker 03:
of appointment of its own arbitrator without any prior notice, either in its communications or in its rules, then the... Would you say commandeered without any prior notice is a pretty strong statement?

[00:01:22] Speaker 04:
Yes.

[00:01:22] Speaker 03:
There was a mailing to your client, right?

[00:01:25] Speaker 03:
There was a mailing, and the mailing said, file an answer, and the answer should contain comments on two things.

[00:01:33] Speaker 03:
It said it should contain comments on the other side's proposal for selecting the chairperson and the seat of arbitration, neither of which, by the way, the SEC accepted, did not say

[00:01:45] Speaker 03:
that we needed to make an appointment of an arbitrator, and there is, in our view, scoured the rules.

[00:01:51] Speaker 04:
How can you appoint a chairperson without an arbitrator being appointed by each of the two sides?

[00:01:58] Speaker 03:
As it was happened in this case, the board ended up appointing the chairperson on its own.

[00:02:05] Speaker 03:
It did not accept the other side's proposal.

[00:02:07] Speaker 03:
The point there, Your Honor, is that these things preceded, necessarily preceded, the selection of the arbitrator under the rules and under the communications.

[00:02:16] Speaker 03:
All the rules said was, all the communications said was file and answer.

[00:02:20] Speaker 03:
The rules said the answer should contain, if applicable,

[00:02:25] Speaker 03:
an appointment of an arbitrator, but it was not applicable here because there was no communication ever from the board that made it applicable, and there was nothing in the parties... How can you have an arbitration without an arbitrator?

[00:02:37] Speaker 04:
I mean, of course it's applicable.

[00:02:41] Speaker 03:
The way the rules work, Your Honor, is that if the answer is not filed, then the rules allow the board to appoint an arbitrator for a party, but

[00:02:51] Speaker 03:
It must first give the party notice and a period of time, and that's rule 13.3 of the SEC's rule.

[00:02:58] Speaker 03:
It has to give the party notice and a time for appointing the arbitrator.

[00:03:02] Speaker 03:
You're correct.

[00:03:02] Speaker 03:
The arbitration can't proceed without that.

[00:03:04] Speaker 03:
The question here was, did Kazakhstan have any notice that it was under a mandatory obligation?

[00:03:10] Speaker 03:
What answer did Kazakhstan provide?

[00:03:12] Speaker 03:
It did not have counsel at that time.

[00:03:15] Speaker 03:
It did not end up providing an answer to our knowledge in the case.

[00:03:19] Speaker 03:
So that allowed the arbitration to proceed under the rules.

[00:03:23] Speaker 03:
And what should have happened, Your Honor, is at that point, the board should have set a deadline, should have decided the things under consideration, how many arbitrators there are going to be, how the chairman's going to be appointed, share person's going to be appointed, and the seat of arbitration.

[00:03:40] Speaker 03:
notify Kazakhstan that it was then under a deadline to appoint an arbitrator.

[00:03:45] Speaker 03:
And none of that happened.

[00:03:47] Speaker 03:
And the result of that, Your Honor, is under Article 5.1d of the convention, the arbitral authority was not in accordance with the agreement of the parties and therefore could not be confirmed in this proceeding.

[00:04:00] Speaker 03:
And this is not a minor thing.

[00:04:02] Speaker 00:
So the argument you're pressing before us is a

[00:04:09] Speaker 00:
focused rule-bound one about I guess it's rules 9 through 13 of the Stockholm rules and the need for post pleading negotiations about appointment and deadlines and such.

[00:04:28] Speaker 00:
But the argument that you made on this point that your predecessor counsel made on this very point to the tribunal

[00:04:40] Speaker 00:
was quite different.

[00:04:42] Speaker 00:
It was simply an argument that no rule specifies a time limit and 21 days and even 35 days is unreasonably short.

[00:04:55] Speaker 03:
I think it's the same argument plus the unreasonably short time frame.

[00:05:00] Speaker 00:
Same argument except when you presented it to the tribunal it was just a highly discretionary

[00:05:08] Speaker 00:
Now there's no rule governs and the deadline that was set was too short.

[00:05:13] Speaker 00:
The argument you're making here is a very precise, focused one under specific rules, but

[00:05:20] Speaker 03:
And the ultimate end of the argument, Your Honor, is no rule governs.

[00:05:24] Speaker 03:
There was no rule here under which they could do what?

[00:05:27] Speaker 00:
Well, the argument you're making here is that the appointment was made in violation of Rule 13.

[00:05:33] Speaker 00:
Yes.

[00:05:34] Speaker 00:
But that wasn't presented to the tribunal.

[00:05:39] Speaker 00:
So you're asking us to reverse or not confirm based on an argument about what Stockholm rules mean

[00:05:50] Speaker 00:
Stockholm process rules mean that it was never presented to the Stockholm arbitral authority?

[00:05:56] Speaker 03:
First of all, I think fairly considered, Your Honor, we did make that argument that their rules did not allow it.

[00:06:01] Speaker 03:
Now the argument is maybe perhaps more focused here, but the ultimate question under the New York Convention is, was the arbitral authority in accordance with the

[00:06:11] Speaker 03:
agreement of the parties, which in this case incorporated the rules.

[00:06:14] Speaker 03:
It was not.

[00:06:14] Speaker 03:
And the district court pointed to no rule.

[00:06:17] Speaker 03:
The Swedish courts likewise pointed to no rule that allowed the SEC to do what it did.

[00:06:24] Speaker 00:
Assume that I conclude you didn't present this argument to the tribunal.

[00:06:31] Speaker 00:
Is there any principle that would require us to reverse

[00:06:38] Speaker 00:
based on a legal argument about tribunal rules that could have been made to the tribunal but wasn't?

[00:06:44] Speaker 03:
I don't think so, Your Honor, and I certainly, I think the other side, in this case, hasn't made that argument.

[00:06:49] Speaker 03:
So, in effect, they have made that objection as well.

[00:06:52] Speaker 00:
That's a question I have for them, but I mean, you're asking us to muck around in interpretation of tribunal rules.

[00:07:03] Speaker 00:
I'm not sure we would lightly do that in a case where that tribunal had no opportunity to present.

[00:07:10] Speaker 03:
Well, the tribunal certainly was presented with the objection, and they misconstrued it, in our view, as a challenge to the arbitrator's impartiality or qualifications.

[00:07:18] Speaker 03:
So we really didn't have the opportunity that Your Honor is suggesting that we might have had to argue this.

[00:07:24] Speaker 00:
They said when they approved... You came in, the arbitrator had been appointed, and you thought that was improper.

[00:07:33] Speaker 00:
and your predecessor counsel was lined up and went before the tribunal and said, this is improper, and you made the general fairness argument that I mentioned, and you made a different argument about a conflict of interest.

[00:07:49] Speaker 03:
I don't know that we made the conflict of interest per se, Your Honor, but we did certainly say the rules don't allow it.

[00:07:56] Speaker 03:
I would, by the way, Your Honor, I'd like to move to the fraud argument

[00:07:59] Speaker 03:
But I would like to take additional questions, but I don't want to get into my rebuttal time.

[00:08:05] Speaker 03:
The fraud argument is the second argument I'd like to deal with today.

[00:08:09] Speaker 03:
But if the court has further questions, I'd be glad to entertain them on the appointment issue.

[00:08:15] Speaker 04:
Why don't you move on to the next argument?

[00:08:16] Speaker 03:
OK.

[00:08:17] Speaker 03:
The second point is nearly two years before the district court, and I see I'm in rebuttal time.

[00:08:21] Speaker 03:
If I might have a look.

[00:08:24] Speaker 03:
Nearly two years before the District Court ever ruled on the study's petition to confirm, the Court incorrectly prevented Kazakhstan from even presenting the evidence, even allowing it leave to present the evidence to the Court of newly discovered evidence of fraud as an additional ground for non-enforcement under Article 5 to be of the Convention.

[00:08:48] Speaker 03:
The Court erred, we believe, as a matter of law

[00:08:51] Speaker 03:
when it held without even allowing Kazakhstan to present the evidence, that no evidence that Kazakhstan could ever present would ever substantiate its allegations.

[00:09:01] Speaker 03:
And here I'm quoting from our motion for leave, that the $999 million awarded to petitioners for the LBG plant was a direct result of the fraud.

[00:09:10] Speaker 03:
That's at page JA337.

[00:09:13] Speaker 03:
And that the Vistade Party's fraud infected the $199 million number relied on the tribunal to award compensation for the LBG plant.

[00:09:20] Speaker 03:
That's 370.

[00:09:22] Speaker 03:
The court further compounded that mistake by adhering to its erroneous ruling, even when Kazakhstan presented copious evidence that the futility ruling was incorrect, and did so only 13 days after briefing on the motion for leave had concluded, which was still nearly two years before the court ruled on the petition to confirm.

[00:09:46] Speaker 03:
The net result of all of this, Your Honor, was to deprive Kazakhstan of its right under Article 5 of the convention and the implementing statute to present all available grounds for fraud.

[00:09:58] Speaker 03:
And I would add, by the way, that the district court at page 767 of the Joint Appendix cited this court's decision in Enron, Nigeria in its decision on Russia reconsideration.

[00:10:11] Speaker 03:
One thing that that court case holds, Your Honor, is that

[00:10:14] Speaker 03:
The defense under Article 5 of the New York Convention of Public Policy Defense is subject cannot be waived and cannot be forfeited and that the court must always consider it even for the first time on appeal.

[00:10:27] Speaker 03:
The reason the court held is because the court is otherwise becoming the tool of the fraud in essence by allowing the fraud to be confirmed

[00:10:38] Speaker 03:
And in this case, we were never allowed our opportunity to present our evidence.

[00:10:41] Speaker 03:
And I would like to just emphasize the modest nature of the request that we're making here.

[00:10:46] Speaker 04:
All right.

[00:10:46] Speaker 04:
I'd like you to conclude, because you're tying us up.

[00:10:48] Speaker 03:
The only request we're making here is to allow us to present the evidence.

[00:10:52] Speaker 03:
We're not asking the court to find the fraud.

[00:10:54] Speaker 03:
We're asking us that we should be allowed to present evidence that a foreign court has found constitutes at least a prima facie case that the

[00:11:03] Speaker 03:
award was procured by fraud.

[00:11:05] Speaker 03:
We were denied that opportunity.

[00:11:06] Speaker 03:
We ask that we be given that opportunity.

[00:11:09] Speaker 04:
All right.

[00:11:09] Speaker 04:
Thank you.

[00:11:09] Speaker 04:
We'll give you a couple minutes on recall.

[00:11:11] Speaker 02:
Thank you.

[00:11:19] Speaker 01:
Good morning, Your Honors.

[00:11:20] Speaker 01:
James Berger for the petitioner.

[00:11:23] Speaker 01:
Appellees, I'd like to address the issues as they were raised by my colleague.

[00:11:30] Speaker 01:
First, on the arbitrator issue,

[00:11:33] Speaker 01:
Your Honor, Judge Katz, I think it is correct that if the law would support the notion that if a certain argument against jurisdiction in the arbitral tribunal or a violation of the arbitral rules were not first presented to the tribunal, those would not be a cognizable objection to recognition of the award.

[00:11:50] Speaker 01:
Now, we didn't brief that in our briefs in the district court or here.

[00:11:55] Speaker 00:
And I'm not prepared to- So why shouldn't we hold you to forfeiture of the forfeiture argument?

[00:12:01] Speaker 01:
Well, we didn't argue it.

[00:12:03] Speaker 01:
We didn't argue it here, and so you probably could hold that.

[00:12:07] Speaker 00:
So can we talk about the merits of that issue?

[00:12:13] Speaker 00:
As I understand the chronology, the relevant contracts were terminated July 21st of 2010, and five days later,

[00:12:26] Speaker 00:
your client filed its statement of claim or complaint, whatever the right term is, right?

[00:12:33] Speaker 00:
That's correct.

[00:12:35] Speaker 01:
It filed the request for arbitration on July 26th.

[00:12:38] Speaker 00:
The treaty that requires arbitration requires a three-month period in which the government is put on notice that this might be headed to arbitration and they can either try to settle it

[00:12:55] Speaker 00:
or they can line up their ducks to figure out what are we going to do if we need to arbitrate, which would seem to include thinking about appointing a member of the tribunal.

[00:13:07] Speaker 00:
And none of that happened.

[00:13:09] Speaker 01:
That didn't happen.

[00:13:10] Speaker 01:
Whether none of it happened, I don't think is quite so clear.

[00:13:13] Speaker 01:
The record suggests that there were discussions that went on before the filing of the request for arbitration, whether you can call those discussions a proper three-month

[00:13:24] Speaker 01:
a negotiation period that you can say the treaty contemplates is probably something that we can debate over.

[00:13:30] Speaker 01:
But we did say that if you were to strictly apply that three-month period, a sovereign would be able to avoid arbitration indefinitely by simply committing new breaches.

[00:13:45] Speaker 01:
This was a long unfolding dispute.

[00:13:48] Speaker 01:
and one I think that the parties had been discussing and had been communicating with one another about.

[00:13:53] Speaker 00:
You give notice of the intent to invoke arbitration and then there's a three-month period in which the parties can either try to settle or prepare for a contested proceeding.

[00:14:07] Speaker 00:
That's what the treaty says and if the court looks at the BG versus Argentina decision... And instead of that you have, you know, the first formal invocation

[00:14:17] Speaker 00:
of arbitration is this letter that's written in English and sent to the government's Justice Department and says, hey, by the way, 21 days, tell us your arbitrator.

[00:14:33] Speaker 01:
Well, that's what the board did.

[00:14:35] Speaker 01:
Right.

[00:14:35] Speaker 01:
We filed the request for arbitration in accordance with the SEC rules, and the board followed its own rules by sending communication to Kazakhstan and saying that

[00:14:47] Speaker 01:
A request for arbitration has been filed.

[00:14:50] Speaker 01:
You have this much time to file an answer.

[00:14:52] Speaker 01:
And if they were to look at rule five of the SEC rules, they would see that, A, that first communication put them on notice that this would be a three-member tribunal because the SEC board.

[00:15:04] Speaker 00:
But all in violation of the legal rule in the relevant treaty that at a minimum parties have 90 days to figure out

[00:15:14] Speaker 00:
how they're going to plan for this.

[00:15:15] Speaker 01:
Well, the tribunal figured out a way to cure that violation.

[00:15:19] Speaker 00:
And when that alleged violation was brought to the tribunal's attention... As to the possibility for settlement, but not as to the appointment issue.

[00:15:28] Speaker 01:
Not as to the appointment issue, but they did make an objection to the appointment of the arbitrator.

[00:15:34] Speaker 01:
Right.

[00:15:35] Speaker 01:
And the tribunal addressed that as they fought fit in accordance with their rules.

[00:15:41] Speaker 01:
The court's review of that issue, whether or not the SEC followed its own rules, Your Honor was talking before about the need for this court to start mucking around with local arbitration rules and the review of its own treatment of those rules is a deferential review.

[00:15:57] Speaker 00:
But the New York Convention does flag composition as an issue.

[00:16:02] Speaker 00:
It's an issue.

[00:16:04] Speaker 01:
It is an issue for sure.

[00:16:07] Speaker 01:
When the court looks at what happened, and I appreciate your honest concern about the potential that this sovereign was caught off balance, was caught off guard by the filing of a request for arbitration.

[00:16:18] Speaker 01:
But these issues were brought up before the tribunal.

[00:16:22] Speaker 01:
In terms of the cooling off period, it was brought to the tribunal's attention as a potential jurisdictional defect.

[00:16:30] Speaker 01:
And Kazakhstan proposed a way to cure that defect.

[00:16:34] Speaker 01:
and the tribunal ultimately imposed the cure that they had.

[00:16:37] Speaker 02:
I'm rather surprised that your answer omits, excuse me, one important consideration and that is that the article, what was it, 26?

[00:16:48] Speaker 02:
26.

[00:16:49] Speaker 02:
26 of the treaty requires, it doesn't, the three month period doesn't automatically

[00:16:57] Speaker 02:
begin with the filing of an arbitration request.

[00:17:00] Speaker 02:
The way I read that provision, it only begins when one party requests the three-month period.

[00:17:08] Speaker 02:
So if your client didn't request it, it's up to the country in response to request it.

[00:17:16] Speaker 02:
And that's what happened.

[00:17:18] Speaker 02:
They requested a three-month cooling-off period, and the arbitration panel granted it.

[00:17:26] Speaker 02:
Am I right that one party has to request a three-month period?

[00:17:32] Speaker 01:
That would be the practical way that it would proceed.

[00:17:34] Speaker 01:
There's a dispute, and that's why I mentioned before, Judge Randolph, there were discussions going on, as I understand it, that the parties didn't just wake up one day and file an arbitration.

[00:17:45] Speaker 01:
There was a dispute that had been unfolding for some time.

[00:17:48] Speaker 01:
There had been discussions.

[00:17:49] Speaker 01:
Whether or not those discussions could be characterized as satisfying a three-month period, I think, is probably something that we could debate about.

[00:17:55] Speaker 01:
The record doesn't really go to that.

[00:17:56] Speaker 02:
You know, there's a comparable provision, believe it or not, in federal contracting law under the, there's a statute called the Miller Act.

[00:18:05] Speaker 02:
And if there's a contracting dispute, you have to wait 30 days, or 90 days, it's the same thing, before you can bring an action in court.

[00:18:15] Speaker 02:
Do you know how the courts handle that?

[00:18:17] Speaker 02:
Are you familiar with that?

[00:18:18] Speaker 01:
I'm not, Your Honor.

[00:18:20] Speaker 01:
What I do know, and if I've answered Your Honor's question sufficiently, I would just move to the point of saying that whether or not the three-month stay that was ultimately imposed was sufficient to cure any potential violation of Article 26 is something that is clearly and I think unquestionably at this stage subject to a deferential review

[00:18:42] Speaker 01:
in a New York convention proceeding.

[00:18:44] Speaker 01:
This case is practically the same as BG versus Argentina.

[00:18:48] Speaker 01:
And the Supreme Court in that case said that when we are confronted with questions concerning satisfaction of these procedural gateways to arbitration, the resulting judicial review is a deferential review.

[00:19:00] Speaker 01:
The court made clear that a review has to take place.

[00:19:03] Speaker 01:
It needs to be a deferential review, but I think the record in this case is very clear that the district court conducted that review and said, this is what the tribunal did,

[00:19:12] Speaker 01:
They imposed a three-month stay.

[00:19:14] Speaker 01:
They imposed that three-month stay at Kazakhstan's request.

[00:19:17] Speaker 01:
And Kazakhstan requested that three-month stay as a cure for the jurisdictional defect that it now is asking this court to rely upon to find that there was not arbitral jurisdiction.

[00:19:28] Speaker 01:
So the tribunal did what Kazakhstan asked it to do.

[00:19:32] Speaker 01:
And under the Supreme Court's holding in BG Argentina, that basically is the end of the story.

[00:19:38] Speaker 01:
The district court looked at what it did and said, applying a deferential review, that seems fine to us, and I think that it should be fine here on appeal as well.

[00:19:48] Speaker 01:
Just to touch briefly upon the fraud issue.

[00:19:55] Speaker 01:
I see my time is running out and I do want to address that issue.

[00:19:58] Speaker 01:
What happened here is Kazakhstan came to the district court in 2016 and said, we have come up with evidence that we think we can use to prove that this award was procured by fraud.

[00:20:12] Speaker 01:
And if you let us, we'll tell you all about it.

[00:20:14] Speaker 01:
And they described a theory of fraud which basically said, we are going to show that there was false testimony given to the tribunal and that that false testimony

[00:20:24] Speaker 01:
resulted in this amount of damages being awarded in connection with the expropriation of a particular asset that was among other assets that were expropriated.

[00:20:34] Speaker 01:
And the district court said, well, the award says they didn't rely on any testimony in setting that value, so you don't have a fraud case.

[00:20:41] Speaker 01:
And I am not going to use this court's resources to conduct a fraud trial when you haven't really articulated something that's cognizable.

[00:20:49] Speaker 01:
And then they went back and came in with a motion for reconsideration saying, no, you misunderstood us.

[00:20:54] Speaker 01:
Our fraud case is actually this.

[00:20:56] Speaker 01:
It's a bid fraud case.

[00:20:58] Speaker 01:
And the district court properly said, I didn't misunderstand anything.

[00:21:00] Speaker 01:
I ruled on the paper that you gave me.

[00:21:03] Speaker 01:
And the motion for reconsideration by any standard

[00:21:06] Speaker 01:
articulates a different theory of fraud than the initial motion did.

[00:21:09] Speaker 02:
The district court also said that the evidence that was being put forth on the motion for reconsideration had been in the possession of Kazakhstan for at least a year before they filed the motion.

[00:21:20] Speaker 02:
On what basis did the district court make that statement, if I've recited it correctly?

[00:21:27] Speaker 01:
You've recited it correctly, Your Honor, and the district court said that because the evidence was obtained through 28 U.S.C.

[00:21:32] Speaker 01:
Section 1782 proceedings that were conducted a year before.

[00:21:37] Speaker 01:
And they had that evidence.

[00:21:39] Speaker 01:
And I think when you look at the record of that motion and the motion for reconsideration, the only reasonable inference that you can make is that Kazakhstan chose not to put that evidence

[00:21:48] Speaker 01:
in with its initial motion, and then when that initial motion got denied, they said, well, I guess we better put it in now, because we got denied, and this is our last bite at the apple.

[00:21:58] Speaker 01:
That would have been their third bite at the apple, by the way, because I think it's important to bear in mind the Swedish court heard this fraud case in its full glory, and they did not think that it was sufficient to set the award aside.

[00:22:13] Speaker 01:
I see my time is elapsed, Your Honors.

[00:22:14] Speaker 01:
I'll be happy to answer any more questions that you may have, otherwise I'll conclude my submission.

[00:22:18] Speaker 03:
Thank you very much.

[00:22:32] Speaker 03:
258 of the Joint Appendix, we did say to the SEC that we were deprived of our right of appointment without our consent and without prior consultation.

[00:22:42] Speaker 03:
That is the same argument that we made below.

[00:22:44] Speaker 03:
It's the argument we're making today.

[00:22:45] Speaker 03:
The District Court rejected that argument on the ground that the rules

[00:22:50] Speaker 03:
told us that we needed to make an arbitral appointment.

[00:22:53] Speaker 03:
That is the decision that this Court is now reviewing.

[00:22:56] Speaker 03:
That decision was incorrect because the Court did not identify and could not identify any rule

[00:23:03] Speaker 03:
that required us to make an appointment or gave us a deadline to make an appointment.

[00:23:08] Speaker 03:
The other thing I would note is on page 262... 258 is what I have too.

[00:23:12] Speaker 00:
Yes.

[00:23:12] Speaker 00:
The argument is the rules don't specify a time period for filing the answer or appointing arbitrators.

[00:23:22] Speaker 00:
21 or even 35-day time period is extremely short.

[00:23:25] Speaker 03:
Well, I'm talking about the first page.

[00:23:27] Speaker 03:
With all respect, the Republic feels constrained to object to its appointment without its consent or prior consultation and without having had an opportunity to select its own arbitrator.

[00:23:36] Speaker 03:
That's the objection.

[00:23:38] Speaker 00:
The other side, by the way... But none of the rules that you rely on, that you invoke in the blue brief are cited here.

[00:23:44] Speaker 03:
But that's the defense.

[00:23:45] Speaker 03:
That's the other side's argument as to why we had those things.

[00:23:49] Speaker 03:
They're saying we had those things because the rules gave it to us.

[00:23:53] Speaker 03:
The district court accepted that.

[00:23:55] Speaker 03:
We say the district court is wrong.

[00:23:57] Speaker 02:
Why didn't Article 5 control?

[00:24:01] Speaker 02:
requires an answer, and the answer has to be, if applicable, the name and address of the name.

[00:24:06] Speaker 02:
You say it's not applicable, why?

[00:24:08] Speaker 03:
It wasn't applicable because there was no notice that we were under a requirement to appoint it.

[00:24:14] Speaker 02:
It wasn't applicable because there were issues needed to be decided, such as the... The letter required you to answer within what, by the end of the month?

[00:24:23] Speaker 03:
It was 15 days after we got it for the answer.

[00:24:26] Speaker 03:
We didn't have counsel.

[00:24:28] Speaker 03:
What the answer... And then you got an extension.

[00:24:31] Speaker 03:
Well, they gave us an extension and we still hadn't selected counsel.

[00:24:36] Speaker 03:
But what the if applicable means is that there has to be something that makes it applicable.

[00:24:40] Speaker 02:
And what makes it applicable is that you have the right to select an arbitrator.

[00:24:45] Speaker 03:
But we didn't yet, because the SEC hadn't even determined how many arbitrators there was going to be, or the method for appointing them, or the seat of arbitration.

[00:24:54] Speaker 03:
The next thing it would have done, we think, is it asked for us to comment on their proposals for those things.

[00:25:01] Speaker 02:
Then, what should have happened is... Where else besides Stockholm does the Stockholm Chamber of Commerce conduct arbitration?

[00:25:12] Speaker 03:
The other side, in fact, asked for Paris, Your Honor, and they were not granted Paris.

[00:25:17] Speaker 03:
They wanted the seat of arbitration to be Paris.

[00:25:20] Speaker 03:
They said that in their

[00:25:22] Speaker 03:
submission to the arbitration and it was not selected.

[00:25:27] Speaker 03:
The point here is that there were things that needed to happen before the selection.

[00:25:30] Speaker 04:
What other ways are there to select one's arbitrator?

[00:25:34] Speaker 04:
Just name the arbitrator.

[00:25:36] Speaker 03:
First of all, it would be helpful to know the seat.

[00:25:38] Speaker 03:
It would be helpful to know whether that arbitrator is then going to select the chairperson.

[00:25:42] Speaker 03:
But there are

[00:25:44] Speaker 03:
Places where it would be applicable.

[00:25:46] Speaker 03:
I'll give you one example of when it would be applicable.

[00:25:48] Speaker 03:
It would be applicable if the agreement between the parties said you need to appoint your arbitrator in your answer.

[00:25:55] Speaker 03:
What all the SEC should have done is it should have set a deadline for appointing the arbitrator, and it didn't.

[00:26:01] Speaker 03:
I would also add, by the way, Judge Cassis on page 260, the other side said there is no procedure for challenging it.

[00:26:06] Speaker 03:
We didn't present this to the arbitral panel because they're not going to rule on whether they were improperly

[00:26:13] Speaker 03:
constituted and Article 5 doesn't require us to have done that even though we did make an objection.

[00:26:20] Speaker 03:
I would just also want to note that Judge Randolph on the cooling off period

[00:26:27] Speaker 03:
The investor is the one that is required to satisfy it.

[00:26:30] Speaker 03:
It's a mandatory requirement.

[00:26:31] Speaker 03:
It's not either party asks for it.

[00:26:34] Speaker 03:
It's a mandatory requirement, and it's jurisdictional.

[00:26:37] Speaker 03:
Only the investor is required to do that before instituting the arbitration give us notice.

[00:26:45] Speaker 02:
Just look.

[00:26:46] Speaker 02:
I don't think that's the way that I read that.

[00:26:52] Speaker 02:
Here's what it says.

[00:26:54] Speaker 02:
So if the dispute cannot be, I'm reading article 26-2.

[00:26:59] Speaker 02:
Yes.

[00:26:59] Speaker 02:
Such disputes cannot be settled according to the provisions of paragraph one within a period of three months from the date on which either party to the dispute requested amicable settlement.

[00:27:11] Speaker 02:
So that strikes me as saying that either party can request a three month period.

[00:27:22] Speaker 03:
Either party can make the request for amicable settlement, but it is the investor that has the mandatory requirement to wait before filing the arbitration.

[00:27:29] Speaker 03:
That's the next clause.

[00:27:31] Speaker 03:
The investor party to dispute may choose to submit it for resolution.

[00:27:35] Speaker 03:
Only then.

[00:27:36] Speaker 03:
Can they choose to do that?

[00:27:37] Speaker 02:
So your client made a request for the three-month period, made the request to the arbitration panel, and it was granted.

[00:27:47] Speaker 03:
Not this three-month period, Your Honor.

[00:27:49] Speaker 03:
This is a mandatory period before the arbitration can continue.

[00:27:52] Speaker 03:
And we didn't make that request.

[00:27:54] Speaker 03:
In fact, it was the other side that preemptively filed.

[00:28:00] Speaker 00:
But when you did make the request midstream,

[00:28:04] Speaker 00:
You suggested to the tribunal that a three-month stay would solve your problem.

[00:28:13] Speaker 03:
We suggested it, but we did not say it would solve the problem.

[00:28:17] Speaker 03:
We said it was a practical solution.

[00:28:19] Speaker 03:
It's a practical solution, which suggests that... We went on to say, Your Honor, that notwithstanding that the jurisdictional objection could ruin the entire arbitration, and the way that was understood was

[00:28:32] Speaker 03:
We're proposing a practical solution.

[00:28:34] Speaker 00:
You preserved an argument that as a matter of jurisdiction, you need 90 days before the arbitration is begun.

[00:28:46] Speaker 00:
But you didn't link it back to the appointment issue.

[00:28:52] Speaker 03:
not the appointment issue.

[00:28:54] Speaker 03:
I think it's relevant there by saying that that was one of the reasons why we ended up not having the ability to file answers.

[00:28:59] Speaker 03:
We hadn't selected counsel.

[00:29:01] Speaker 03:
They rushed the arbitration.

[00:29:02] Speaker 03:
Had there been the three-month period, things might have proceeded differently.

[00:29:06] Speaker 03:
But in terms of the cooling off period, that's a separate argument.

[00:29:08] Speaker 03:
Finally, on the fraud,

[00:29:11] Speaker 03:
Council on the other side said that we chose not to present our evidence to the district court.

[00:29:17] Speaker 03:
We were very express about what we were asking for in the district court.

[00:29:21] Speaker 03:
We were asking for leave to present the evidence.

[00:29:24] Speaker 03:
We were not saying we were presenting the evidence.

[00:29:26] Speaker 03:
We wanted leave to present it.

[00:29:29] Speaker 03:
That was what was denied.

[00:29:30] Speaker 03:
And then it was denied on the ground of futility.

[00:29:33] Speaker 03:
Then on reconsideration, we showed the evidence that we wanted leave to present.

[00:29:38] Speaker 03:
And the court still adhered to its ruling even after seeing the evidence.

[00:29:42] Speaker 03:
Evidence, by the way, that the London court found was a prima facie case of fraud.

[00:29:47] Speaker 03:
The Dutch court is going to be looking at it as well.

[00:29:50] Speaker 03:
We submit the district court here should and actually must look at that evidence.

[00:29:55] Speaker 04:
Thank you.

[00:29:56] Speaker 04:
The case is submitted.