[00:00:00] Speaker 01: Thank you. [00:00:02] Speaker 01: Thank you. [00:00:18] Speaker 00: Your honors. [00:00:18] Speaker 00: Good morning. [00:00:19] Speaker 00: May it please the court [00:00:24] Speaker 00: We are asking this court respectfully to take a close second look at a dispute resolution clause in a management contract that was entered into between the parties. [00:00:34] Speaker 00: And we submit that when the court does so, it will appreciate that the arbitral tribunal below erroneously exercised arbitral jurisdiction over breach of contract disputes [00:00:44] Speaker 00: that the sovereign did not agree to submit to arbitration. [00:00:48] Speaker 00: And for that reason, we request that the award not be recognized and confirmed under Article 5.1c of the New York Convention because it deals with a difference not contemplated by or not following within the terms of the submission to arbitration. [00:01:03] Speaker 00: So to jump into the meaning of this dispute resolution clause, I'd like to make one preambular comment. [00:01:09] Speaker 04: Just before you get to the meaning, [00:01:13] Speaker 04: You have to get over a threshold question of whether this dispute was committed to the arbitrators. [00:01:23] Speaker 04: And the contract at issue references [00:01:30] Speaker 04: references the Zurich Chamber of Commerce, and that chamber has its own rules, and those rules have what they call a competence-competence provision. [00:01:45] Speaker 04: Why isn't that the end of the matter? [00:01:48] Speaker 00: In this instance, so the doctrine Your Honor is referring to is the delegation, what I'll refer to as the delegation doctrine under the Supreme Court's precedent in First Options v. Kaplan. [00:02:00] Speaker 00: It is the case that when parties clearly and unmistakably delegate the decision of arbitrability to the arbitrators, the district courts and the courts are to apply a highly deferential standard to the question of arbitrability. [00:02:15] Speaker 00: In this case, there is no clear and unmistakable evidence of an intent to delegate arbitrability. [00:02:21] Speaker 00: In the first case, there is no clear and unmistakable evidence of an intent to arbitrate [00:02:28] Speaker 00: writ large to submit the contract disputes to arbitration. [00:02:31] Speaker 00: So the very platform of arbitration is in question, much less the sub question of a delegation to the arbitrators. [00:02:38] Speaker 04: Just talk about the delegation. [00:02:41] Speaker 04: If you had referenced, if you had expressly referenced the Swiss rules, that would be enough. [00:02:49] Speaker 04: That would be a clear enough statement to delegate arbitrability, the arbitrability question to the arbitrator. [00:02:58] Speaker 00: If the, I think there needs to be some cavity on that. [00:03:03] Speaker 04: If there's a, if the question of arbitration is so- We have a couple of cases where express reference to Ancetral rules is good enough because the Ancetral rules say the arbitrator determines arbitrability. [00:03:16] Speaker 00: That's true. [00:03:17] Speaker 04: There's a number of cases- You're just one step short of that. [00:03:23] Speaker 04: I mean, it may be a big step, but [00:03:25] Speaker 04: You're referencing the tribunal when the tribunal has its own rules. [00:03:29] Speaker 00: Well, in this particular instance, there is no explicit reference to a set of arbitral rules that contain a competence-competence rule within them. [00:03:39] Speaker 00: In particular, the reference to this Chamber of Commerce of Zurich in this case is actually another level. [00:03:47] Speaker 00: It demonstrates a lack of clear and unmistakable intent on the delegation point, specifically because [00:03:54] Speaker 00: In 2004, I believe, the Zurich Chamber of Commerce integrated its rules with the Swiss Chamber's institution rules. [00:04:03] Speaker 00: So there was a new set of rules. [00:04:05] Speaker 00: And those rules are not explicitly referred to in this provision. [00:04:10] Speaker 00: So right away, there's an outdated reference not to the rules, but to the institution itself. [00:04:17] Speaker 00: So the specific rules aren't referenced to and the institution itself that is referenced to had displaced its previous rules with new set of rules anyway. [00:04:25] Speaker 00: So that compounds level of ambiguity that we're dealing with here. [00:04:28] Speaker 00: And again, it's a very high standard for delegation and it's clear and unmistakable intent to delegate. [00:04:36] Speaker 00: And in First Options, the Supreme Court even cautioned that it was reversing [00:04:39] Speaker 00: the typical presumption in favor of arbitrability. [00:04:42] Speaker 04: Is there any practice in the Zurich chamber or Swiss chambers or arbitration generally where the arbitrating authority has its own rules, but then they choose the party's contract for a different set of procedural rules? [00:05:04] Speaker 00: I think there are instances that, that can be done. [00:05:07] Speaker 00: I mean, ad hoc arbitration operates in that fashion in which the rule, there is no administration of, of, um, there's no administrating body. [00:05:15] Speaker 00: I think there is typically a problem when you select one institution, um, to administer it, but then import the rules from some other institution. [00:05:23] Speaker 00: I don't think that that works necessarily. [00:05:25] Speaker 00: That seems odd. [00:05:26] Speaker 04: That is odd, but that's not, I mean, then that binds you to the Zurich and Swiss rules, which have the, [00:05:34] Speaker 04: competence, competence provision. [00:05:36] Speaker 00: That is not what happened here, however. [00:05:38] Speaker 00: I mean, the Zurich Chamber of Commerce integrated its rules with other chambers of commerce in Switzerland to form this aggregated Swiss chambers institution, what's called the Swiss rules. [00:05:49] Speaker 00: So it's not an instance of incompatible clauses, however. [00:05:53] Speaker 00: But it, again, does not rise to the clear and unmistakable intent to select some specific set of rules. [00:06:03] Speaker 00: in that case. [00:06:06] Speaker 00: So that's on the delegation point. [00:06:09] Speaker 00: And I just want to, one more time, emphasize that the Supreme Court in First Options, again, noted that because the question of arbitrarity implicates the foundational concept of consent to arbitration, it was imposing or flipping the typical presumption in favor of arbitrability to require a threshold of clear and unmistakable evidence of that intent. [00:06:28] Speaker 02: What is your argument, again, about [00:06:32] Speaker 02: the BG Group Supreme Court case. [00:06:35] Speaker 02: Doesn't that stand in your way here? [00:06:40] Speaker 02: Because the arbitration dispute or the dispute section in the treaty that the court was interpreting had the same sort of requirement and they called it a requirement to go to a local court. [00:06:59] Speaker 02: And the Supreme Court said [00:07:01] Speaker 02: That's just a precondition to arbitration, and whether that's been satisfied is up to the arbitrators, not the court. [00:07:08] Speaker 00: Yes, so a few points, Your Honor. [00:07:10] Speaker 00: We don't think it's the same situation as BG Group. [00:07:12] Speaker 00: And that's when I wanted to begin with an understanding of the clause. [00:07:17] Speaker 00: That relates to both the merits of the question of the scope of arbitrability and because this court or the district court need to have a characterization and understanding of the provision at issue. [00:07:29] Speaker 00: Is this a procedural precondition or what I'll call a mere procedural precondition? [00:07:34] Speaker 00: Or is it a question of arbitrability? [00:07:37] Speaker 00: So the difference is that under our interpretation of the contract, which we submit is the correct understanding of the arbitration clause. [00:07:46] Speaker 00: The requirement to go to local courts first is a mandatory requirement to submit breach of contract disputes under the contract to those local courts. [00:07:55] Speaker 00: The arbitration mechanism is a review of the disposition of those local courts' decision. [00:08:01] Speaker 00: So it's a different order of dispute resolution, which is done often in international arbitration under international legal standards of investor protections, like what's called denial of justice, to ensure that the local courts have treated an alien investor [00:08:15] Speaker 00: fairly under a minimum standard. [00:08:18] Speaker 00: So you have a breach of contract dispute being addressed at the local court level. [00:08:22] Speaker 00: The arbitration submission relates to the disposition of that dispute by the local courts to ensure a minimum standard of treatment. [00:08:30] Speaker 00: In the BG group case, which the court found to be a procedural precondition, the submission of arbitration operates at a different level. [00:08:41] Speaker 00: So in BG group, you have a treaty. [00:08:44] Speaker 00: The treaty contains a series of substantive investor protections, fair and equitable treatment, expropriation, and the like. [00:08:50] Speaker 00: So when the state does something that the investor objects to, there's some sort of policy or whatever, there's a ostensible breach of the treaty protection at the international legal level. [00:09:00] Speaker 00: So the delict is at the treaty level. [00:09:04] Speaker 00: The local litigation requirement in those treaties, and it's not always a requirement. [00:09:09] Speaker 00: That local litigation provision [00:09:14] Speaker 00: gives the state an opportunity essentially to redress that initial delict at the international level. [00:09:20] Speaker 00: So you have a treaty breach and the submission to local courts operates to give an opportunity to redress it at the local level. [00:09:29] Speaker 00: So if there was some provision in the law, the investor can challenge it in the local courts and through whichever mechanism exists there. [00:09:37] Speaker 00: But if that is either in the BG group case, either if it's not done within 18 months or is simply not resolved to the investor's satisfaction, they can then bring the dispute to arbitration. [00:09:51] Speaker 03: That's the point at which the Swiss tribunal [00:09:57] Speaker 03: said, and I've mentioned it not because of any authority here, that's in doubt, but because of its imperative logic, as that seems nonsensical. [00:10:08] Speaker 03: That is to say, you would have a court jurisdiction, a final judgment. [00:10:13] Speaker 03: Of course one party doesn't like it. [00:10:15] Speaker 03: And then you have another final judgment that is potentially contrary to the initial final judgment. [00:10:24] Speaker 03: I've never heard of any other system that operates that way. [00:10:28] Speaker 03: I don't see how it can operate. [00:10:30] Speaker 03: The court said, the tribunal said, you have two final decisions out there. [00:10:35] Speaker 03: What happens? [00:10:38] Speaker 00: That confusion on the Swiss tribunal's part was a function of its apprehension that in both cases, you're submitting, first instance, breach of contract disputes to either local court. [00:10:51] Speaker 03: What's the counterindications of that? [00:10:53] Speaker 00: If you look, and we think this is an incisive, highly probative piece of evidence, which was not apparently considered by the Swiss tribunal, if you look, for instance, to the foreign investment law of Equatorial Guinea, you'll find a remarkably similar dispute resolution mechanism where an investor is obligated to go to local courts to exhaustion and then can take the dispute to [00:11:16] Speaker 00: to international arbitration. [00:11:18] Speaker 00: And we submit that's precisely what was intended to be transposed essentially. [00:11:24] Speaker 00: And it's when you look at it through that prism of that foreign investment law and international legal obligations. [00:11:29] Speaker 03: What's the first step in that? [00:11:31] Speaker 03: It's not going to court. [00:11:32] Speaker 00: It is going to court. [00:11:34] Speaker 00: It's a mandatory. [00:11:35] Speaker 00: So you submit you have a breach of contract dispute or dispute arising out of in the foreign investment law. [00:11:40] Speaker 00: It's whatever investment in this contract. [00:11:42] Speaker 00: It's the contract that goes to local court. [00:11:46] Speaker 00: It goes through the courts. [00:11:48] Speaker 00: If the investor has a issue, which they may or may not, they could have redressed sufficiently. [00:11:54] Speaker 03: And it can be on the merits. [00:11:55] Speaker 03: They just don't like losing. [00:11:57] Speaker 00: Right. [00:11:57] Speaker 00: But the standard of it's, I don't want to use the phrase standard of review, but the breach at issue or what's being submitted to arbitration is not the breach of contract dispute itself, the first instance breach of contract dispute. [00:12:12] Speaker 00: But another but a review under international legal norms. [00:12:16] Speaker 00: So if there's a treaty, it would be under the treaties provisions. [00:12:19] Speaker 00: Has there been an expropriation? [00:12:20] Speaker 00: Has there been a denial of fair and equitable treatment based on the disposition cumulatively of both the initial conduct and the disposition in the state courts? [00:12:29] Speaker 00: Or under, there's no treaty here we submit between Switzerland and Equatorial Guinea, but there's customary international law. [00:12:36] Speaker 00: In particular, there's the customary international legal protection called denial of justice, which is, which, and in those cases, the court, it's not a, there's no race due to Qatar problem because it's a, it's a different standard. [00:12:48] Speaker 00: It's a different cause of action. [00:12:49] Speaker 00: It's a different. [00:12:50] Speaker 02: How does that, the provision, what is it, the investment that you, the Equatorial Guinea, [00:12:58] Speaker 02: The foreign investment law. [00:13:00] Speaker 02: Suppose there was no such dispute resolution clause in this contract. [00:13:06] Speaker 02: Would that law then govern? [00:13:08] Speaker 00: That would depend on whether this particular investment had been appropriately registered and acknowledged under the other provisions of that law. [00:13:16] Speaker 00: A certain investment, there's an approval process, et cetera, a gateway criteria. [00:13:22] Speaker 00: I don't know the answer to that. [00:13:23] Speaker 00: I don't know if it's been registered appropriately. [00:13:27] Speaker 00: I don't believe it has, but I cannot. [00:13:28] Speaker 02: What was the basis for the arbitrator's decision [00:13:32] Speaker 02: to, which I find rather strange, to credit the German translation of the Spanish provision rather than the Spanish provision itself. [00:13:46] Speaker 02: It translators the authoritative version of whatever it is, a poem by Goethe or the Dead Sea Scrolls or whatever, but the original [00:13:59] Speaker 02: is the authentic is the is the controlling provision, not the interpretation of it into another language. [00:14:07] Speaker 00: So with with so there's two points and I I'm sure my colleagues will have something to say about this, but the clauses are not necessarily a direct translation. [00:14:20] Speaker 00: It's a very puzzling [00:14:21] Speaker 00: contract in the sense that the Spanish and the German are side by side and there's no typically when you have that one is there's a designation that one language is prevailing over the other that doesn't exist here so the so the agreements were executed side by side in both in both languages but we do maintain that the evidence suggests that the negotiations were in [00:14:44] Speaker 00: dominated by Spanish because we see handwritten markups of the Spanish provisions that have changes that are not implemented. [00:14:53] Speaker 00: The signature was on the Spanish. [00:14:54] Speaker 00: The signatures were also on the Spanish. [00:14:56] Speaker 02: Before you run out of time, I have one question. [00:14:58] Speaker 02: This is a little bit off the subject we're talking about now. [00:15:02] Speaker 02: But this is the second arbitration. [00:15:06] Speaker 02: Correct. [00:15:06] Speaker 02: The first arbitration resulted in recovery. [00:15:13] Speaker 02: Right? [00:15:13] Speaker 02: Yes, there was a settlement agreement and payment. [00:15:16] Speaker 02: And that was paid by the country. [00:15:20] Speaker 00: Yes, there was a settlement as to the exact amount. [00:15:22] Speaker 02: So here's my question. [00:15:23] Speaker 02: The arbitrators here said, well, if you go to a court first, we're going to be bound under Swiss law by race judicata. [00:15:32] Speaker 02: Right? [00:15:32] Speaker 02: Why aren't they bound by race judicata as a result of the first arbitration? [00:15:38] Speaker 00: This is a function of an [00:15:41] Speaker 00: In my opinion, respectfully, an oddity of Swiss law, which I can't fully describe, which allows piecemeal adjudication of certain claims. [00:15:48] Speaker 00: But you haven't contested that. [00:15:50] Speaker 00: No, not in this case. [00:15:51] Speaker 00: Not in this case. [00:15:51] Speaker 00: It was contested below. [00:15:52] Speaker 00: The republic was of the view that the settlement should have disposed of all disputes that should have been effectively raised judicato of the entire dispute. [00:16:02] Speaker 00: But there is a provision under Swiss law that it's essentially a damages determination. [00:16:07] Speaker 02: I guess my question is, in the first arbitration, there was no first resort to the local courts that went immediately into arbitration, right? [00:16:20] Speaker 00: Correct. [00:16:20] Speaker 00: There was no, and these issues were raised in that arbitration as well. [00:16:26] Speaker 02: Is there a written decision? [00:16:28] Speaker 00: There is. [00:16:29] Speaker 00: I don't have the first award in this case. [00:16:32] Speaker 03: So I take it that means that [00:16:36] Speaker 03: Equatorial Guinea did not interpose this objection in the first arbitration. [00:16:43] Speaker 00: It did, Your Honor. [00:16:44] Speaker 00: It did. [00:16:44] Speaker 00: In fact, that's the only... It did not? [00:16:46] Speaker 00: It did interpose this objection in the first arbitration. [00:16:48] Speaker 03: In the first arbitration. [00:16:50] Speaker 03: Correct. [00:16:53] Speaker 03: And how was that resettled? [00:16:55] Speaker 03: Did you say or resettled? [00:16:56] Speaker 00: Well, the tribunal exercised jurisdiction all the same. [00:17:00] Speaker 00: There's an interim decision, which I unfortunately don't have in the record. [00:17:03] Speaker 00: This was in 2011. [00:17:05] Speaker 00: And we haven't been able to obtain the award in that case. [00:17:08] Speaker 00: But there was an objection. [00:17:09] Speaker 00: And in fact, we only have the brief on jurisdiction with the republic's objection in the first arbitration in this brief that's in this record. [00:17:19] Speaker 00: I believe that's at 8353. [00:17:22] Speaker 00: That's the Republic's objections in the first arbitration. [00:17:25] Speaker 00: That was resolved against the Republic. [00:17:27] Speaker 00: There was an award. [00:17:28] Speaker 00: There was a settlement to finalize the amount at dispute. [00:17:31] Speaker 00: I think the management contract has tables of damages, et cetera, and there was interest issues. [00:17:37] Speaker 00: There was a settlement that was paid. [00:17:39] Speaker 00: And in the same month that the settlement agreement was executed, [00:17:43] Speaker 00: Marseille Cliniquin brought another, the second arbitration. [00:17:48] Speaker 00: And so then that was challenged. [00:17:50] Speaker 00: We can see from the award itself that there was a challenge on jurisdiction, both on the grounds that the settlement agreement should have predisposed to the dispute and because of this interpretation of the clause. [00:18:01] Speaker 03: Why isn't the interpretation you've offered one that makes resort to the Equatorial Guinea Court a precondition? [00:18:11] Speaker 03: A precondition precedent. [00:18:13] Speaker 00: It is both a condition precedent, but it also determines the scope of what's ultimately arbitrable, in that there is no arbitrable dispute until that occurs. [00:18:25] Speaker 00: So in essence, there is naturally a procedural element to it. [00:18:30] Speaker 00: But there is fundamentally a substantive scoping issue that arises only once the dispute is submitted to the local courts. [00:18:37] Speaker 00: And that's the fundamental distinction with PG. [00:18:40] Speaker 03: Suppose there's a claim [00:18:42] Speaker 03: for, pardon me, a defense of latches with regard to several different elements of the dispute. [00:18:54] Speaker 03: That's a condition pressing. [00:18:56] Speaker 03: I think that's listed by the Supreme Court. [00:18:58] Speaker 03: Yeah, that would be like statute. [00:19:00] Speaker 03: And the resolution of the defense of latches might, by eliminating some of the claims but not others, [00:19:13] Speaker 03: determine the scope of arbitrarily. [00:19:16] Speaker 00: That's yes, that's correct. [00:19:18] Speaker 00: But fun, but fundamentally the on the dispute itself or the order of dispute would remain with respect to whatever was initially submitted to arbitration. [00:19:27] Speaker 00: Whereas here, there's a the the [00:19:31] Speaker 00: the local remedy or the disposition of whatever is submitted in the first instance is what's being considered by the arbitral tribunal. [00:19:39] Speaker 00: So there's an entirely new element of how the initial claims are disposed of that isn't present in the latches situation. [00:19:48] Speaker 00: And it's helpful to consider, for instance, in the denial of justice standard, which we find the most illustrative of how this might work. [00:19:57] Speaker 00: That's a whole new set of standards of conduct for whether or not. [00:20:02] Speaker 00: there's been a denial of justice, for instance. [00:20:04] Speaker 00: So things like excessive delay in the proceedings or extreme procedural irregularities. [00:20:12] Speaker 00: And there is a robust dispute in the literature and some of the cases of whether gross substantive misapplications constitute. [00:20:20] Speaker 00: So there's a whole body of conduct that occurs essentially at the judiciary level in this instance, that that is what would be submitted to arbitration as distinct from the [00:20:29] Speaker 03: the contract dispute in the first place which may be in what jurisdiction does this dispute arise if we want to read ourselves into it where would we look i'm sorry the dispute you just described about um what constitutes uh procedural versus arbitrability that would be in i'm not sure i'm following the question exactly but the hypothetical i is a secondary literature or a bunch of court decisions or it would there's there is secondary literature and also um the [00:20:59] Speaker 00: would be exit cases and other treaty cases typically is where this discussion takes place. [00:21:03] Speaker 04: Can I take you back to BG? [00:21:06] Speaker 04: Yes. [00:21:08] Speaker 04: Everything you're saying about the difference between the underlying contract claim and the denial of justice claim makes sense to me. [00:21:17] Speaker 04: That's my understanding of how international law works as a default. [00:21:25] Speaker 04: But [00:21:26] Speaker 04: I mean, it's still the case that we have a Supreme Court decision. [00:21:32] Speaker 04: It frames a threshold question, whether a local remedies rule, an exhaustion rule, whatever you want to call it, gets a substance or procedure label, and the standard of review follows from that. [00:21:51] Speaker 04: And they say the right label is procedural. [00:21:56] Speaker 04: I don't see any difference between the provision at issue there and the provision at issue here. [00:22:08] Speaker 04: I mean, the Argentine court in BG could have decided the merits of the contract dispute. [00:22:16] Speaker 04: And then when you go to arbitration, presumably you'd be litigating denial of justice. [00:22:23] Speaker 04: I'm just not sure the clauses are different. [00:22:25] Speaker 04: What seems to be different, and I don't know if we can take account of this, but what seems to be different in the two cases is the underlying assumption of race judicata or not. [00:22:40] Speaker 04: The Supreme Court decided BG on the assumption that any local court decision in Argentina would have no race judicata effect. [00:22:51] Speaker 04: and the Swiss arbitrators here seem to think that a local court decision would have 100% full stop, you're done race judicata effect. [00:23:05] Speaker 04: How do we take account of the underlying assumptions of race judicata when we're thinking about whether BG controls or not? [00:23:17] Speaker 00: I think the race judicata [00:23:20] Speaker 00: I don't know that the BG group actually discussed raised judicata, but. [00:23:25] Speaker 04: Justice Breyer says the arbitral tribunal would not be required to give any particular weight to a local court decision, which seems very odd. [00:23:38] Speaker 04: I mean, it's not your denial of justice model. [00:23:43] Speaker 00: So I think the raised judicata problem that the Swiss court struggled with [00:23:49] Speaker 00: is a function of, at least, and I can talk about the R-rays due to CAATA standards, which require an identity in the cause of action of the dispute. [00:24:00] Speaker 00: In our instance, and in BG Group, [00:24:04] Speaker 00: or in our instance, by which I mean our interpretation of the contract, there is no identity in cause of action between what's being submitted to the local court and what's being evaluated by the international tribunal. [00:24:17] Speaker 04: Because the contract claim and the denial of justice claim. [00:24:20] Speaker 00: And whatever international legal standard it could be treated. [00:24:23] Speaker 02: Is there a much simpler answer? [00:24:25] Speaker 02: I mean, number one, a raised judicata can be waived. [00:24:30] Speaker 02: You don't raise it, you've waived [00:24:33] Speaker 02: Number two, if your reading of the provision, the arbitration provision is correct, the parties agreed to waive race judicata because they said that the dispute that remains after the lower court decision is subject to arbitration. [00:24:51] Speaker 00: That could be, Your Honor, I think it would depend on the substantive law of waiver in whether it's Switzerland. [00:24:56] Speaker 02: What law governs there? [00:24:58] Speaker 02: Is that Swiss law or is that United States law? [00:25:02] Speaker 00: Well, we submit that the contract at this issue or the interpretation of the contract should have been under Equatorial Ghanaian law because it has the overwhelmingly closest nexus with the contract. [00:25:14] Speaker 00: Under Guinea law? [00:25:15] Speaker 00: Yes. [00:25:16] Speaker 00: But the Swiss arbitrators applied Swiss law as the seat of the arbitration. [00:25:21] Speaker 02: Is there a statute of limitations for contract disputes in Equatorial Guinea? [00:25:28] Speaker 00: I don't know the answer to that. [00:25:29] Speaker 00: I suspect there is. [00:25:29] Speaker 02: The reason I ask is if you prevail, [00:25:32] Speaker 02: and they have to go to local court, they may wind up simply getting kicked out because of the statute of limitations problem. [00:25:39] Speaker 00: If we prevail in this instance and they have to go to local court? [00:25:43] Speaker 02: Yeah, but if the statute of limitations is run, then they can then go to arbitration. [00:25:52] Speaker 00: Well, they could then claim that they deny justice, that's right, under our interpretation of the contract. [00:25:57] Speaker 00: But I want to, if I, I'm well over my time, but I want to make sure I've addressed Judge Katz's, your concern on, on raised judicata. [00:26:03] Speaker 00: I think the raised judicata conflict in the, in the Swiss arbitrators were struggling with was a function of their interpretation that in both instances, you'd have breach of contract disputes being adjudicated at the, at the first instance level. [00:26:16] Speaker 04: One more question from me on a different subject. [00:26:20] Speaker 04: Does the equatorial Guinea investment law govern this contract? [00:26:28] Speaker 00: Judge Randolph asked me about the application of that law. [00:26:33] Speaker 00: And I think my answer has to be the same, which is I don't know whether this investment was properly registered under that law and therefore whether it would. [00:26:41] Speaker 04: I mean, it's a pretty significant question, right? [00:26:44] Speaker 04: If it governs, you win because the governing law says you have to go to the local court first. [00:26:55] Speaker 04: But it's a little [00:26:57] Speaker 04: little unclear whether it is an option for investors to opt into and then you get certain benefits or whether it just covers the universe of all foreign investments. [00:27:12] Speaker 00: There is a gateway threshold of that law, which requires certain approved investments and the like to qualify under that law. [00:27:18] Speaker 00: I don't know if, I don't believe this investment qualified, but to your point, your honor, I- The most we can do with the Guinea law of exhausting local remedies is, [00:27:41] Speaker 04: It's just a background assumption that people might have had in mind even though it doesn't govern the contract directly. [00:27:49] Speaker 00: I think it's a probative, a highly probative demonstration. [00:27:53] Speaker 00: You're not arguing it's controlling. [00:27:55] Speaker 02: Correct. [00:27:55] Speaker 02: The contract doesn't contain a choice of law provision? [00:28:00] Speaker 02: No. [00:28:03] Speaker 02: implicitly it does. [00:28:05] Speaker 02: The contract was executed in New Guinea, or in Equatorial Guinea, and it's those courts of that country that, according to your view, get the first crack at this. [00:28:19] Speaker 02: So one would assume that they're going to be, and the contract was being performed in Equatorial Guinea. [00:28:25] Speaker 00: Yeah, yes. [00:28:26] Speaker 00: The overwhelming, again, it's a very puzzling decision by the Swiss courts, which has a [00:28:33] Speaker 00: It's a very puzzling election to apply Swiss law, given the extent which Equatorial Guinean law is centered in this dispute. [00:28:42] Speaker 00: So with a sovereign for the administration of a state hospital performed and executed there. [00:28:48] Speaker 02: However, in the BG case, the United States had no connection with that, with the parties or the performance at all. [00:28:59] Speaker 02: The only connection was that the [00:29:01] Speaker 02: arbitration took place here in Washington. [00:29:04] Speaker 00: But in that case, I think the operative issue is that enforcement is being sought. [00:29:08] Speaker 00: So the substantive U.S. [00:29:09] Speaker 00: law on enforcement of awards is being applied. [00:29:12] Speaker 00: The arbitration itself would be under the international law, specifically the U.K.-Argentina bid. [00:29:19] Speaker 00: Thank you. [00:29:19] Speaker 00: Thank you very much. [00:29:28] Speaker 04: Mr. Schmidt. [00:29:29] Speaker 01: Good morning, Your Honors. [00:29:32] Speaker 01: Paul Schmidt from DLA Piper on behalf of Marseille Clinic and AG, and I'll just refer to them as Marseille Clinic and going forward. [00:29:40] Speaker 01: This appeal concerns a garden variety foreign arbitral award that US courts regularly confirm. [00:29:47] Speaker 01: Applying relevant Supreme Court precedent, district court deferred to the arbitral tribunal's objective and reasonable interpretation of the arbitration clause that the parties had agreed to, and which had also applied in a previous arbitration between these parties. [00:30:02] Speaker 01: involving the same contract. [00:30:05] Speaker 01: Equatorial Guinea now comes to this court for relief, seeking to read into the clause the same non-existent and objectively unreasonable provisions it has previously argued for to the tribunal and the district court. [00:30:20] Speaker 01: Both the tribunal and the district court resoundingly rejected those arguments. [00:30:24] Speaker 01: After seven years, it's time to bring this matter to closure, consistent with the clear policy favoring arbitration of disputes. [00:30:31] Speaker 01: Therefore, this court should affirm the district court's ruling. [00:30:35] Speaker 01: I want to start with the BG Group case. [00:30:37] Speaker 01: There was a lot of interest in that by the panel. [00:30:41] Speaker 01: And there's one fundamental problem with their theory about BG Group and how this clause is read. [00:30:48] Speaker 01: And that is that none of the provisions that they're arguing for, an appeal process or arbitration as appeal, some sort of limitation of appellate disputes and arbitration to denial of justice or miscarriage of justice, [00:31:01] Speaker 01: Um, none of this is mentioned in the plain language of the clause. [00:31:05] Speaker 01: It's just simply not there. [00:31:06] Speaker 01: It's read into the clause by equatorial. [00:31:10] Speaker 01: Let's just start with BG. [00:31:12] Speaker 04: Yes. [00:31:13] Speaker 04: That case was decided on the assumption that an Argentine court decision would have no race judicata effect. [00:31:23] Speaker 04: So the only question the court says, this is about when the case proceeds to arbitration, not whether the case proceeds to arbitration. [00:31:36] Speaker 04: Right? [00:31:36] Speaker 04: Yes. [00:31:37] Speaker 04: This case has a different [00:31:40] Speaker 04: Question, this case has a what question. [00:31:43] Speaker 04: Brace Judicata operates on the contract claim and a different, the denial of justice question, the what question gets submitted to the arbitrator. [00:31:59] Speaker 01: That's how international law normally works. [00:32:01] Speaker 01: That is not in the plain language of the contract judge. [00:32:04] Speaker 04: Let's just start, just starting with whether BG gets you [00:32:09] Speaker 04: BG prevents us from reviewing the contract, Dana. [00:32:13] Speaker 01: Right. [00:32:13] Speaker 01: I think the best way to answer that question, Judge Katz, is to look at what the Supreme Court said the controlling question was in that case. [00:32:20] Speaker 01: And that was, quote, who, court or arbitrator, bears primary responsibility for interpreting and applying the local litigation requirement to an underlying controversy. [00:32:32] Speaker 01: In our view, the matter is for the arbitrators. [00:32:34] Speaker 01: So it's not simply applying a clause that may have some sort of subset of disputes where a res judicata analysis would matter. [00:32:43] Speaker 01: It's a question of, is this on its face a procedural precondition? [00:32:49] Speaker 01: It is, clearly. [00:32:51] Speaker 01: The question then becomes, how is that interpreted? [00:32:53] Speaker 01: You don't think the res judicata question matters? [00:32:56] Speaker 01: I don't think it's relevant to the analysis. [00:33:00] Speaker 01: And so in BG Group, the court is very clear that, [00:33:05] Speaker 01: What matters in terms of deference is the arbitrators get control over this question. [00:33:12] Speaker 01: And US courts will defer to it, because arbitrators know the procedural requirements of whatever the local rule is that's applying. [00:33:20] Speaker 01: And the court was clear that courts presume that parties intend arbitrators, not courts, to decide disputes about the meaning and application of particular procedural preconditions for the use of arbitration. [00:33:30] Speaker 01: And these issues are afforded considerable deference, which is exactly by the way Judge Leon did. [00:33:35] Speaker 01: He applied the procedural precondition analysis. [00:33:38] Speaker 01: He found there was nothing to disturb the award, and he enforced it. [00:33:43] Speaker 03: Suppose that the contract had said specifically that the contract matters were to be resolved initially in the Ghanaian court, total Ghanaian court. [00:33:57] Speaker 03: and that thereafter any treaty issues could be resolved or international law issues could be resolved in the tribunal. [00:34:07] Speaker 03: Would it still be a precondition or is it only the ambiguity that introduces that possibility? [00:34:15] Speaker 01: It's not ambiguity that introduces the possibility. [00:34:17] Speaker 01: I think this, which I have to say Judge Ginsburg, just have to [00:34:21] Speaker 01: That's obviously not the circumstance we're facing here. [00:34:23] Speaker 01: But with regard to delegating particular issues for local courts in the arbitral tribunal, that is something which does happen in arbitration from time to time. [00:34:33] Speaker 01: But that's not the situation we're facing here. [00:34:37] Speaker 01: I think we should look at what the tribunal did with the clause itself, with the arbitration clause itself, and how it interpreted it. [00:34:43] Speaker 01: There was a German and Spanish translation. [00:34:45] Speaker 01: The arbitral tribunal considered both [00:34:46] Speaker 01: Not one over the other, but both of them. [00:34:48] Speaker 01: That's in the award, Paragraphs 131 to 149. [00:34:52] Speaker 01: And... Would you repeat that? [00:34:55] Speaker 01: I didn't catch everything you just... Certainly Judge Randolph. [00:34:59] Speaker 01: So we have to look at how the arbitral tribunal interpreted the clause. [00:35:04] Speaker 01: in the first instance. [00:35:05] Speaker 01: And what the arbitral tribunal did was it looked at both the Spanish and German translations together as one contract, not as two separate things, but it attempted to reconcile between the two translations what the proper interpretation was. [00:35:19] Speaker 01: And doing that, it used objectively reasonable principles of Swiss law, which was the applicable law here because the seat of the tribunal was in Switzerland. [00:35:28] Speaker 01: And it found that under switched law principles, there was no reasonable way to read this contract in favor of what Equatorial Guinea says it means, because it doesn't mention appellate procedure. [00:35:39] Speaker 04: Because you can't have a local decision followed by an international denial of justice adjudication, which is perfectly conventional. [00:35:50] Speaker 01: It's not just a matter of denial of justice. [00:35:55] Speaker 01: The provision itself does not specify that the disputes are limited on appeal under their theory to denial of justice or miscarriage of justice. [00:36:04] Speaker 04: It's a very confusing clause. [00:36:07] Speaker 04: And the arbitral tribunal did a great job saying you can read it one way, you can read it the other way. [00:36:16] Speaker 04: Dispute can refer to disagreement with the local court decision, or it can refer all the way back to the underlying contract. [00:36:27] Speaker 01: There were two aspects of the tribunal's interpretation of this clause. [00:36:31] Speaker 01: The first is what you just mentioned, where it found there was some ambiguity in the contract with regard to how these provisions work, either way. [00:36:37] Speaker 04: And then it resolved the ambiguity by saying it just doesn't make sense to have a local adjudication followed by an international arbitration. [00:36:46] Speaker 04: That's exactly right. [00:36:47] Speaker 04: You might have some good arguments on reading of text, but that just doesn't seem to be [00:36:52] Speaker 04: I don't get it. [00:36:53] Speaker 04: I mean, that's how international law works. [00:36:58] Speaker 01: It was a little bit more than that, Judge Casas. [00:37:01] Speaker 01: It said that, just bear with me for a second. [00:37:07] Speaker 01: The tribunal held that the arbitration as appeal interpretation was not reasonable because one, it could result in two separately enforceable judgments. [00:37:17] Speaker 01: This implicates the res judicata issue, of course. [00:37:20] Speaker 01: And an arbitration tribunal, also with regard to res judicata, should respect substantive res judicata regarding a previous decision and could not deviate from this. [00:37:28] Speaker 01: This was based on Swiss law, which found that state decisions, and this is the difference from the BG group, which you identified already, the Argentina case, I think, turned on the issue of what the Argentine government was doing at the time. [00:37:40] Speaker 01: It was limiting access to the courts. [00:37:43] Speaker 01: the ability to pursue these claims with certain administrators. [00:37:45] Speaker 01: And why is it Swiss law? [00:37:48] Speaker 01: Because it's the seat of the arbitration. [00:37:50] Speaker 01: And under Swiss law, the seat of the arbitration governs if the parties have not selected a forum law or a particular state's law in the contract. [00:38:01] Speaker 01: As you already identified previously, Judge Randolph, there was no choice of law clause here in the contract that said equatorial Ghanaian law applies or. [00:38:09] Speaker 02: Well, the idea that as Judge Katz [00:38:12] Speaker 02: just pointed out, the idea that the reading that Equatorial Guinea puts forth would make no sense is belied by BG Group because the treaty there provided exactly the same thing, that you go to the local courts and then you can go to arbitration. [00:38:32] Speaker 02: And on top of that, there's the investment law that the Council for Equatorial Guinea [00:38:41] Speaker 02: is supplied. [00:38:42] Speaker 02: So where does this idea that it makes no sense come from? [00:38:46] Speaker 01: Two things, Judge Randolph, responding to both your questions. [00:38:49] Speaker 01: First of all, it's interesting. [00:38:51] Speaker 01: BG Group ends up in exactly the same place that this case ended up, which is there is a provision, a local litigation requirement, which is a procedural precondition. [00:39:00] Speaker 01: It specifies that local litigation, in that case, it really specified that there was local litigation required here. [00:39:06] Speaker 01: It does not do that. [00:39:07] Speaker 01: But procedural precondition was, they argue, [00:39:11] Speaker 01: local litigation first, then resort to arbitrators. [00:39:14] Speaker 01: In Biju, the Supreme Court, in fact, deferred to the arbitral tribunal's determination that this was an unreasonable way to interpret the clause because the Argentine court system had been hindered in terms of access by investors to the court system. [00:39:30] Speaker 01: That's what happened here. [00:39:31] Speaker 01: The arbitral tribunal said, this is an unreasonable provision. [00:39:34] Speaker 01: We're going to read this provision. [00:39:36] Speaker 01: And we've determined that it's unreasonable in the way that it operates because of [00:39:40] Speaker 01: multiple boards because it doesn't mention appeal, because all the trappings of an appeal, that language does not exist in the clause. [00:39:47] Speaker 01: So that's the first thing. [00:39:48] Speaker 01: The second thing was Equatorial Ghanaian Law. [00:39:50] Speaker 04: Wait, sorry, let me make sure I understand. [00:39:54] Speaker 04: In BG [00:39:56] Speaker 04: There were very specific emergency measures that the Argentinian government enacted, which made it very burdensome for foreign investors to go to local courts. [00:40:11] Speaker 04: And that's what was held to be the excuse. [00:40:14] Speaker 04: What is the analog here? [00:40:17] Speaker 04: What did the Equatorial Guinea court system or legislative system do to frustrate [00:40:27] Speaker 04: any ability to go to their local courts? [00:40:29] Speaker 01: It's not a question of what the Equatorial Ghanaian system did. [00:40:32] Speaker 02: It's a question of... The question was, what did they do? [00:40:39] Speaker 02: You should answer that first before you say why that's not the right question. [00:40:44] Speaker 01: I apologize, Judge Randolph. [00:40:46] Speaker 01: I wasn't implying that something wasn't the right question. [00:40:49] Speaker 01: The issue in PG Group was the arbitral tribunal classified the reading that Argentina wanted to derive from the clause as unreasonable based on circumstances, which are obviously different from the circumstances here. [00:41:05] Speaker 01: Finding that the clause is unreasonable and the court deferring our federal court system deferring to that determination is the same thing that Judge Leon did. [00:41:13] Speaker 01: deferred to a determination by the tribunal that the reading of the clause that they wanted to assign to it was objectively unreasonable. [00:41:20] Speaker 04: But the basis for an unreasonable finding of excuse in BG was all of these emergency measures. [00:41:36] Speaker 04: The basis for the finding of unreasonability here [00:41:42] Speaker 04: is this idea that you must resolve textual ambiguity. [00:41:51] Speaker 04: What the Arbitral Tribunal said was textual ambiguity must be resolved in your favor because it just makes no sense to start in a local court and then go to international arbitration. [00:42:05] Speaker 01: Well, that's where I was getting to the second part of their analysis, which was, OK, it looks at the text and says, there's some ambiguity here on either side. [00:42:14] Speaker 01: But we're going to use objective principles of contract interpretation under Swiss law and determine what is the most sensible version of this clause? [00:42:23] Speaker 01: What makes sense in terms of just general objectively reasonable principles? [00:42:28] Speaker 01: And it was under that analysis that the tribunal found that this clause that is at issue here did not provide for mandatory litigation in the local Equatorial Guinea court system. [00:42:40] Speaker 01: I want to address Judge Randolph's point before I lose sight of it. [00:42:43] Speaker 01: And that was why shouldn't Equatorial Guinea law apply to this contract. [00:42:46] Speaker 01: Arbitration is a matter of contract. [00:42:49] Speaker 01: The parties never contracted to Equatorial Ghanaian law applying. [00:42:52] Speaker 01: Council talked about the law on foreign investment and how provisions of the law on foreign investment are somehow relevant to the analysis here. [00:43:00] Speaker 01: It's interesting. [00:43:02] Speaker 01: The two provisions, they identified the mandatory recourse to Equatorial Ghanaian courts and exhaustion of local remedies. [00:43:09] Speaker 01: Neither one of those is in the contract here. [00:43:11] Speaker 01: The parties could have easily put it in. [00:43:13] Speaker 01: Equatorial Guinea could have said, we're not entering into this contract until we have an exhaustion of remedies provision, until the contract says, clearly, you're going first for all disputes to Equatorial Guinea courts, and then you can have arbitration. [00:43:27] Speaker 01: That clause does not say that at all. [00:43:29] Speaker 01: It doesn't mention an exhaustion of remedies issue. [00:43:32] Speaker 01: And there's no proof, and to my knowledge, they were not investors under the statute. [00:43:37] Speaker 01: But certainly, there's something they can point to to show that they were investors under the statute. [00:43:42] Speaker 01: Whether this statute controls, I think Judge Katz, you already addressed that. [00:43:45] Speaker 02: I think we got it. [00:43:46] Speaker 02: That argument is, it's like the argument we see once in a while that Congress knows how to say such and so and they didn't say it. [00:43:54] Speaker 02: Because there's another side to that argument. [00:43:56] Speaker 02: The other side is that your client never put in that those laws do not apply. [00:44:03] Speaker 02: And the reason we have a dispute here in part is because neither side did anything to clarify the point. [00:44:12] Speaker 02: I don't think there's much mileage you get from that point. [00:44:18] Speaker 01: So there is one thing that's clear, Judge Randolph, and that is that the parties said that any arbitration, regardless of whether you accept their interpretation or our interpretation, any arbitration would take place before the Chamber of Commerce of Zurich. [00:44:32] Speaker 01: And the Chamber of Commerce of Zurich is going to apply Swiss law because it's at the seat, unless the parties have obviously contracted otherwise. [00:44:38] Speaker 01: They did not. [00:44:41] Speaker 01: The contract itself has a strong suggestion that Swiss law applies. [00:44:45] Speaker 01: And the Zurich Chamber of Commerce, at the time of the arbitration, at the time the management agreement was signed, followed the Swiss rules. [00:44:51] Speaker 01: That is not in dispute at all, and both versions of the Swiss rules. [00:44:55] Speaker 02: I want to just follow up on one question in your reading. [00:44:57] Speaker 02: Well, it's not your reading, but one of the things that occurred to me, I don't have it in front of me, these two clauses is that, and Judge Cass has mentioned this, [00:45:09] Speaker 02: is that the nature of the dispute that can be arbitrated is different than the original dispute, because under the reading, I think either clause says that if a dispute occurs, the German, or if a disagreement results, the Spanish version, that is what gets arbitrated. [00:45:33] Speaker 02: And what gets arbitrated is not the original dispute, because the court may have settled [00:45:38] Speaker 02: of that to the satisfaction of the parties. [00:45:42] Speaker 02: It's only what remains by one party or both of what the court decides that is subject to arbitration. [00:45:53] Speaker 01: That's not our understanding of what the clause says, Judge. [00:45:55] Speaker 01: Well, obviously. [00:45:57] Speaker 01: I want to pull out the language of the clause to make sure I'm quoting it properly. [00:46:02] Speaker 02: The German uses disputes occur [00:46:07] Speaker 02: And the Spanish says disagreement after the court decides. [00:46:15] Speaker 01: You're referring to the second sentence of the clause, correct Judge Randolph, where it's setting up the argument. [00:46:21] Speaker 01: I'm not looking at it. [00:46:22] Speaker 01: What page is that? [00:46:23] Speaker 04: German uses the word disputes twice in both sentences. [00:46:29] Speaker 04: One in singular and one in plural, I believe. [00:46:31] Speaker 04: And the Spanish uses disputes in the first sentence and disagreement in the second, is my understanding. [00:46:39] Speaker 01: I just want to say at the outset, I'm going to answer your question, Dr. Randolph. [00:46:42] Speaker 01: I just want to say at the outset that because this is [00:46:45] Speaker 01: a procedural precondition, deference must be given to the arbitrator's interpretation. [00:46:50] Speaker 01: But with that said and on the table. [00:46:53] Speaker 01: Let's assume we want to construe it. [00:46:56] Speaker 04: I know you have arguments against that. [00:46:57] Speaker 01: Yeah. [00:47:01] Speaker 01: I'll read, first of all, the tribunal's interpretation of the German version, subsequently translated into English. [00:47:10] Speaker 01: The second sentence says, in the event of a dispute, the parties agree [00:47:13] Speaker 01: to seek arbitration proceedings before the Chamber of Commerce in Zurich. [00:47:16] Speaker 01: That language, and the language is... What are you reading from? [00:47:21] Speaker 01: This is JA 72 from the award. [00:47:23] Speaker 01: I can read you Judge Leon's version as well. [00:47:25] Speaker 01: He has a slightly different version. [00:47:26] Speaker 01: It's essentially the same thing, JA 598. [00:47:29] Speaker 01: He took it from the management agreement. [00:47:32] Speaker 01: I'll read that provision. [00:47:34] Speaker 02: JA what? [00:47:35] Speaker 01: 598. [00:47:35] Speaker 01: I'll read that provision because it's in Judge Leon's version. [00:47:39] Speaker 01: It's clearly in the record. [00:47:43] Speaker 01: If disputes do occur, the party shall commit to arbitration proceedings before the Chamber of Commerce in Zurich. [00:47:48] Speaker 01: That language does not say anything about disputes about some judgment from Equatorial Guinean courts. [00:47:53] Speaker 01: The previous sentence is setting up, first of all, the first step, which is you're going to try to sell this amicably. [00:47:59] Speaker 01: That is the only mandatory language here in the first sentence. [00:48:03] Speaker 01: And then you're going to do that before you make any attempt to call on the courts of Equatorial Guinea. [00:48:11] Speaker 01: Calling upon the courts of Equatorial Guinea is exactly what disputes or disagreement, depending on if you're looking at the Spanish version. [00:48:17] Speaker 02: May I interrupt you? [00:48:20] Speaker 02: On the page eight of the Equatorial Guinea brief, there is the English translation of the German translation. [00:48:34] Speaker 02: You referred to the English translation of the German translation on page 598 [00:48:41] Speaker 02: Judge Leon's opinion. [00:48:42] Speaker 02: That's correct. [00:48:43] Speaker 02: They're different. [00:48:44] Speaker 01: Which is right. [00:48:48] Speaker 01: Well, that's a good question, Judge Randolph. [00:48:49] Speaker 01: So for purposes of the record. [00:48:51] Speaker 02: I hadn't noticed this, but Judge Leon's statement of that clause is different from the statement at Appendix 263. [00:49:05] Speaker 01: If you'll bear with me for a second, Judge Randolph, I'm going to look at their brief to make sure I'm certain about [00:49:12] Speaker 01: So A263, I believe those are the exhibits that they attached to the district court record. [00:49:24] Speaker 02: Judge Leon's interpretation or recitation appears to be incorrect. [00:49:30] Speaker 01: Well, Judge Leon is taking it from the management contract, the management agreement, the English version of the management agreement. [00:49:37] Speaker 01: So the reason all of this gets [00:49:40] Speaker 01: I don't want to use the word confused, but it's the first thing that comes to mind. [00:49:42] Speaker 01: There is obviously the original clause that the tribunal sets out in its award. [00:49:48] Speaker 01: There's the translated version of that into English, which was furnished for purposes of the record in this case. [00:49:58] Speaker 01: I believe Equatorial Guinea provided their own translations of these clauses. [00:50:02] Speaker 01: And Judge Leon looked at the translation of the management agreement [00:50:06] Speaker 01: which is a separate document, so not the award, but a separate document in the record that's translated from German and Spanish into English. [00:50:13] Speaker 02: Let me ask you, are the parties in agreement with respect to the accuracy of the translation into English? [00:50:23] Speaker 01: We do not agree with their Spanish language version into English. [00:50:28] Speaker 01: I can't speak for them, Your Honor. [00:50:30] Speaker 02: I don't know if they have... You don't agree with Equatorial Guinea's [00:50:36] Speaker 02: statement on page, what is it? [00:50:40] Speaker 02: Is it page seven of the brief? [00:50:44] Speaker 02: Is that right? [00:50:45] Speaker 01: I'm looking at their brief. [00:50:53] Speaker 01: You're referring to the one in the box, right? [00:50:56] Speaker 01: Right here on page seven. [00:51:01] Speaker 04: I have in my note. [00:51:04] Speaker 04: I have in my notes that the arbitrators rejected the translation at 263. [00:51:09] Speaker 01: Right. [00:51:10] Speaker 01: They noted that they found it not accurate. [00:51:14] Speaker 01: They found that translation not accurate. [00:51:15] Speaker 01: They didn't explain why or parse it, but they found that to be not accurate. [00:51:19] Speaker 04: It seemed to me not hugely different. [00:51:22] Speaker 04: But in any event, are you OK with us using the translations that the arbitral tribunal put forth? [00:51:30] Speaker 01: Yes. [00:51:32] Speaker 01: And is that what the district court used? [00:51:34] Speaker 01: The district court took it from the management agreement, the translated management agreement in the record. [00:51:39] Speaker 01: So we submitted as part of our petition to confirm the contract containing the arbitration clause as we were supposed to do under the foreign sovereign. [00:51:46] Speaker 03: Does it matter to you which of these two? [00:51:48] Speaker 03: Excuse me? [00:51:49] Speaker 03: Does it matter which of these two, management agreement translation or the contract interpretation into German? [00:52:00] Speaker 03: we rely on. [00:52:01] Speaker 01: To answer your question directly, it does not matter. [00:52:03] Speaker 01: And in fact, expanding outward, it doesn't matter what version of this clause translation you look at. [00:52:08] Speaker 01: It's the same result. [00:52:10] Speaker 01: And to return to the point I was making, the language that Your Honors had highlighted in the event of a dispute, that is referring to the last clause in the previous sentence. [00:52:21] Speaker 01: That's how typically we construe context in terms of interpretation. [00:52:27] Speaker 01: Prior to calling upon the courts of Equatorial Guinea, [00:52:30] Speaker 01: resolution in the courts of Equatorial Guinea. [00:52:32] Speaker 01: It doesn't say exhaustion of remedies. [00:52:34] Speaker 01: It just simply says, prior to calling on those courts. [00:52:37] Speaker 01: In the event of a dispute, with regard to, this is where you have to take context, in the event of a dispute, with regard to that decision to go to the Ghanaian courts, the parties agree to seek arbitration proceedings in the Chamber of Commerce of Zurich. [00:52:48] Speaker 01: That's exactly what happened here. [00:52:50] Speaker 01: That's exactly what happened here. [00:52:52] Speaker 01: Marseille Kliniken did not want to pursue its claims in the Equatorial Ghanaian courts. [00:52:56] Speaker 01: And it took them to arbitration just as the parties contracted for. [00:53:00] Speaker 01: The plain language of the text of the clause supports that interpretation. [00:53:05] Speaker 04: Disputes in the first sentence refers to the underlying contract dispute. [00:53:13] Speaker 01: Yeah, any dispute arising from the contract, the typical all-inclusive line. [00:53:17] Speaker 04: Dispute in the second sentence refers neither to that [00:53:24] Speaker 04: nor to disagreement with a decision of the local court. [00:53:28] Speaker 04: It's a dispute about invoking the local court's jurisdiction. [00:53:34] Speaker 04: That's exactly correct, Your Honor. [00:53:36] Speaker 04: Maybe, but it's a very odd. [00:53:40] Speaker 01: Well, putting aside how you parsed the language, as you identified, the tribunal had some difficulty with it. [00:53:48] Speaker 01: They applied interpretations of contracts through Swiss law [00:53:52] Speaker 01: and found that this was the most reasonable translation. [00:53:55] Speaker 01: It was more reasonable to read the version which they approved of, which is that there is a trumping mechanism for arbitration over Equatorial Ghanaian courts in this clause, as opposed to what the other side is arguing for, which is to argue all this language about limitation of claims, exhaustion of remedies, appeals. [00:54:13] Speaker 01: None of this, none of it is in the clause itself. [00:54:21] Speaker 02: Can race judicata be waived under Swiss law? [00:54:24] Speaker 01: I honestly don't know, Judge Randolph. [00:54:26] Speaker 01: What I do know is that Swiss law says that judgments of a state court, meaning state in terms of a country, judgments of a state court take precedence over arbitral judgments. [00:54:39] Speaker 01: That's the order of public language. [00:54:41] Speaker 02: Unless the parties decide otherwise. [00:54:42] Speaker 01: Unless the parties decide otherwise, which they did not do in this case. [00:54:45] Speaker 02: Well, that's an open question. [00:54:48] Speaker 01: There's certainly no explicit language in the contract to support that interpretation, Judge Randolph, and they haven't pointed to anything to suggest that it would. [00:54:56] Speaker 04: So I had thought one textual point cutting against you was that your interpretation would make this reference to calling on the local courts or turning to the local courts just nonsensical. [00:55:18] Speaker 04: And you're saying, no, the work it does is it gives either party the option of going to local court. [00:55:31] Speaker 04: And then it gives the counterparty an override. [00:55:34] Speaker 01: That's correct. [00:55:34] Speaker 01: So if Equatorial Guinea had, and I don't think there's anything in the record to support this scenario, but if Equatorial Guinea had filed a lawsuit in Equatorial Guinea courts, the contract says that we would have the right to take that to arbitration instead. [00:55:47] Speaker 01: That's how it works. [00:55:49] Speaker 01: So it's a trumping mechanism. [00:55:51] Speaker 04: What about they try to invoke local law to support their interpretation? [00:55:59] Speaker 04: They also try to invoke Swiss law. [00:56:04] Speaker 04: And the Swiss cases they cite maybe stand for the proposition that if an arbitration clause [00:56:16] Speaker 04: provides for a choice. [00:56:20] Speaker 04: One can either go to an arbitral tribunal or to a court. [00:56:26] Speaker 04: That is an insufficiently clear commitment to arbitration to be imposed on an unwilling defendant. [00:56:37] Speaker 01: That's certainly how they categorize those cases, Judge Casas. [00:56:40] Speaker 01: It's not what those cases actually say. [00:56:44] Speaker 01: What do you think they'd say? [00:56:46] Speaker 01: So there's three cases that they cite. [00:56:51] Speaker 04: The first one seems to say if you have a choice, that's not good enough. [00:56:55] Speaker 04: And the second one and the third one seems to say if the provisions are conflicting, not enforceable. [00:57:02] Speaker 01: That's right. [00:57:03] Speaker 01: So and unfortunately the Swiss. [00:57:06] Speaker 01: Unfortunately, the Swiss system doesn't have tidy named cases like we do. [00:57:09] Speaker 01: They have these long numbers. [00:57:11] Speaker 01: This is why I said the second and the third. [00:57:13] Speaker 01: Yeah. [00:57:15] Speaker 01: So in case 4A279 from 2010, the contract provided that, quote, the parties agree in advance to have the dispute submitted to binding arbitration through the AAA or to any other US court. [00:57:29] Speaker 01: Now, that is a clear ambiguity. [00:57:33] Speaker 01: It's unclear what's being chosen here. [00:57:35] Speaker 01: Clear ambiguity? [00:57:38] Speaker 01: Fair enough, Judge Randolph. [00:57:40] Speaker 01: Point taken. [00:57:40] Speaker 04: Touche. [00:57:43] Speaker 04: Why isn't that effectively saying the parties may go to arbitration or may go to a U.S. [00:57:51] Speaker 04: court? [00:57:52] Speaker 01: Because it doesn't exclude one at the expense of the other, which is what this clause does. [00:57:56] Speaker 01: This clause says you can go to the equatorial Canadian courts, but if one party says arbitration, you're going to arbitration. [00:58:04] Speaker 01: This clause says you can do one or the other. [00:58:07] Speaker 01: It doesn't say one has precedent over the other. [00:58:09] Speaker 01: It doesn't provide the mechanism that this sort of detail mechanism that this clause does. [00:58:13] Speaker 01: So that's that case. [00:58:15] Speaker 01: That's the 4A279 case. [00:58:18] Speaker 01: The 4A244 case in 2012, the third case they mentioned, the clause provided that the dispute would be submitted exclusively to arbitration in Lausanne, Switzerland. [00:58:29] Speaker 01: But a separate governing law clause in the contract [00:58:33] Speaker 01: stated that each of the parties here too submits to the non-exclusive jurisdiction of the Swiss court. [00:58:39] Speaker 01: It's unclear which court you're supposed to go to there. [00:58:42] Speaker 01: One court in Lausanne or any court in Switzerland, again, does not have the same veto mechanism that this clause does in this case. [00:58:58] Speaker 04: I'll give you a couple of sentences. [00:59:01] Speaker 01: I just want to touch on the clear and unmistakable evidence point. [00:59:04] Speaker 01: I'm sorry? [00:59:04] Speaker 01: The clear and unmistakable deference point. [00:59:06] Speaker 01: It was mentioned at the end of the question. [00:59:09] Speaker 01: So there's no dispute here that when rules are incorporated, particular rules are incorporated. [00:59:16] Speaker 01: They incorporated the tribunal, but not the rules. [00:59:20] Speaker 04: Right. [00:59:21] Speaker 04: And the rules, if I have them right, say, these rules, I assume is the Swiss arbitral rules. [00:59:31] Speaker 04: shall govern where an agreement to arbitrate refers to these rules, which means if there's no reference to the rules and we're in contractual arbitration, parties might or might not agree to all of the procedural rules. [00:59:51] Speaker 01: Well, there's some history, but I'm going to answer that question in a second. [00:59:54] Speaker 01: I want to get the history behind it first. [00:59:56] Speaker 01: They had the opportunity to object to the application of the Swiss rules. [01:00:01] Speaker 01: This is all in the brief, but procedure order number one, the tribunal put essentially in flashing red lights that, hey, the Swiss rules are going to apply. [01:00:11] Speaker 01: They drafted procedure order number one and circulated a draft to the parties. [01:00:15] Speaker 01: They didn't object. [01:00:16] Speaker 01: There was an organizational meeting that discussed this very issue. [01:00:19] Speaker 01: They didn't object. [01:00:21] Speaker 01: And there's no dispute that section 21.1 of the Swiss rules [01:00:25] Speaker 01: do provide the arbitrator competence to determine their own competence. [01:00:29] Speaker 01: So one, they waive this issue by not raising it before the arbitral tribunal. [01:00:33] Speaker 01: That's the Dorale case, which was just decided two months ago, which says that if you don't raise a defense in arbitration, it's waived later in force. [01:00:41] Speaker 01: And on the merits? [01:00:43] Speaker 01: On the merits, the issue of which rules applied or the Zurich Chamber of Commerce, which rules they apply, the Zurich Chamber of Commerce uses the Swiss rules. [01:00:55] Speaker 01: They have sophisticated counsel who should have been aware of this when the form was chosen. [01:01:01] Speaker 01: It incorporated the Swiss rules in 2004, I believe. [01:01:06] Speaker 04: It set up the Swiss Chambers Arbitration Institute, which is- Do you have any sense of how common it might or might not be for an arbitral body to use different rules? [01:01:19] Speaker 04: I mean, I had thought one follows from the other inextricably. [01:01:23] Speaker 04: I mean, if you agree to [01:01:25] Speaker 04: If you agree to an adjudication in the District Court for the District of Columbia, you get our local rules period full stop. [01:01:35] Speaker 04: Right. [01:01:36] Speaker 01: But I just don't know if arbitration has that... I can't answer your question and say that it never happens, Judge Katz's, because I don't know that for a certainty. [01:01:46] Speaker 01: I will agree it's very unusual and I've never seen it in my career 14 years practicing. [01:01:51] Speaker 04: Okay. [01:01:53] Speaker 01: Anything else? [01:01:54] Speaker 01: I think I've covered my point. [01:01:55] Speaker 01: So I just want to thank the court. [01:01:57] Speaker 01: We would ask that you affirm Judge Leon's decision to enforce this arbitral award against Kenny. [01:02:04] Speaker 01: Thank you, Your Honor. [01:02:18] Speaker 04: Mr. Havlick, I'll give you a couple of minutes. [01:02:20] Speaker 00: Thank you. [01:02:21] Speaker 00: Just a couple of points in order. [01:02:24] Speaker 00: There was a remark about what the Swiss arbitral law requires and how it requires the application of the law of the seat of the tribunal, or the seat of the tribunal IE Swiss law. [01:02:38] Speaker 00: I would just direct the court to some briefing in the arbitration, the first arbitration at A362, which cites the PIA, A362. [01:02:49] Speaker 00: which cites the Swiss Public International Law Act provision 1871 and the Swiss rules themselves at 33.1, which also enables the application of the law with the closest connection with the dispute, which in this case we submit is the law of Equatorial Guinea. [01:03:08] Speaker 00: I want to then focus hopefully most of my time on the on the contract itself. [01:03:12] Speaker 00: There was discussion about translations and interpretations. [01:03:16] Speaker 04: Yeah, so why can't [01:03:18] Speaker 04: Just to cut to the chase, why can't the word disputes in the second sentence of the German translation or disagreement in the second sentence of the Spanish translation refer to a decision to go to the local court? [01:03:37] Speaker 04: Not the underlying contract dispute and not the decision, the local court decision on the back. [01:03:42] Speaker 00: So I think the answer to that question lies in the first sentence in either language. [01:03:47] Speaker 00: And if I may make one clarification point, there was a mention of the Republic's translation being rejected by the tribunal. [01:03:58] Speaker 00: And I think the discussion was around the translation. [01:04:01] Speaker 04: Are you OK if we just use the translations from the arbitral award? [01:04:06] Speaker 00: I don't think there is. [01:04:08] Speaker 00: I think so. [01:04:09] Speaker 00: So I just want any material. [01:04:11] Speaker 00: Yeah, I don't. [01:04:12] Speaker 00: So the translation in 8263 was a certified translation submitted by us in the district court. [01:04:19] Speaker 00: Rejected. [01:04:19] Speaker 00: That was not rejected by anybody, as far as I know. [01:04:22] Speaker 00: So I just want to make that clear. [01:04:23] Speaker 00: That was what was only introduced in the district court, not considered by the tribunal at all. [01:04:28] Speaker 00: So that's been. [01:04:30] Speaker 00: I don't think there's any dispute. [01:04:31] Speaker 00: And I generally don't think that as between the various iterations of German to English and the various iterations of Spanish to English, there's any meaningful difference. [01:04:42] Speaker 00: The differences are between the German and the Spanish. [01:04:46] Speaker 00: So in the Spanish, focusing on the Spanish for a moment, the first sentence uses the word litigio to refer to [01:04:57] Speaker 00: disputes, which are legal disputes. [01:05:00] Speaker 00: The German uses- About the underlying contract. [01:05:04] Speaker 00: Yes, that illegal dispute is implicated. [01:05:08] Speaker 00: In the German, it uses the word for disputes in both sentences. [01:05:12] Speaker 00: That's streitigkeiten. [01:05:13] Speaker 00: But in the first sentence, it goes on and specifically says, streitigkeiten aus diesem Vertrag, which is dispute arising from this agreement, contract dispute. [01:05:24] Speaker 00: The Spanish then uses mandatory verbs with respect to both amicable dispute resolution and mandatory verbs with respect to will attempt conciliation otherwise will turn to look correct. [01:05:36] Speaker 00: Correct. [01:05:37] Speaker 00: So we start with that. [01:05:39] Speaker 00: first sentence and there's no disparity between the German and the Spanish on those two points. [01:05:46] Speaker 04: The German is a little bit ambiguous on whether the shall. [01:05:51] Speaker 04: Yes, covers the attempt to conciliate. [01:05:55] Speaker 04: It covers that at a minimum and then it may or may not project forward to calling on the local courts. [01:06:02] Speaker 04: Just reading the English words. [01:06:04] Speaker 04: I thought that was ambiguous. [01:06:05] Speaker 00: That's right. [01:06:06] Speaker 00: So we submit that the Spanish contains one tier of ambiguity, which is how the two sentences interact. [01:06:13] Speaker 00: The German contains two tiers of ambiguity, how the sentences interact. [01:06:16] Speaker 04: On this point, you say Spanish is clear. [01:06:21] Speaker 04: two levels of mandatory, German is ambiguous, we harmonize with the Spanish. [01:06:27] Speaker 00: Correct, correct. [01:06:29] Speaker 00: And so, but we start from that basic issue that the first sentence uses mandatory language to refer to. [01:06:38] Speaker 00: Quite clearly, this contract disputes are going to local courts. [01:06:44] Speaker 00: Then we get a disagreement about what the word disagreement or disputes means in the second sentence in either language. [01:06:51] Speaker 00: I think with a view of what we just read in the first sentence, if you adopt our interpretation, every single word in every language is given its ordinary meaning. [01:07:03] Speaker 00: Fact is given to its ordinary meaning, whereas in the [01:07:06] Speaker 00: In the tribunal's interpretation, it disregards the use of mandatory words for contract disputes being submitted to local courts. [01:07:15] Speaker 04: Unless you think calling upon or turning to local courts is its own thing, separate from any decision they might render. [01:07:30] Speaker 00: Turning to arbitration, I think you mean [01:07:36] Speaker 04: No, I had thought calling on the local court. [01:07:40] Speaker 04: Well, I don't know. [01:07:41] Speaker 04: I guess your point is calling upon the local court is a futile gesture if the mechanism is either party can just go straight to arbitration. [01:07:57] Speaker 00: That's right. [01:07:57] Speaker 00: And here we enter the discussion of what might not be a nullity. [01:08:02] Speaker 00: I think it's pathological. [01:08:04] Speaker 00: That interpretation would be pathological under the Swiss and in what we'll call the third case that we cite, which has 2012 in the title, XVY 2012 we'll call it. [01:08:17] Speaker 00: To counsel's point, the [01:08:20] Speaker 00: Submission to the Swiss courts in that employment agreement was not exclusive. [01:08:25] Speaker 00: The submission to arbitration was exclusive. [01:08:28] Speaker 00: I don't see the difference between that scenario and the one here, which gives the court, which gives the claimant the option of going to [01:08:38] Speaker 00: local court, the state courts of Switzerland in that case, or what as the as the court found has left open recourse to the state courts, but has not excluded clearly jurisdiction of local courts. [01:08:50] Speaker 00: And we think that should be dispositive on that point. [01:08:54] Speaker 04: Yeah, anything. [01:08:57] Speaker 04: Okay, thank you. [01:08:58] Speaker 04: Thank you.