TermoRio S.A. E.S.P. (Colombia) v. Electranta S.P. (Colombia), 487 F.3d 928
EDWARDS, Senior Circuit Judge: Appellant TermoRio S.A. E.S.P. (“TermoRio”) and appellee Electrificadora del Atlantico S.A. E.S.P. (“Electranta”), a state-owned public utility, entered into a Power Purchase Agreement (“Agreement”) pursuant to which TermoRio agreed to generate energy and Electranta agreed to buy it. When appellee allegedly failed to meet its obligations under the Agreement, the parties submitted their dispute to an arbitration Tribunal in Colombia in accordance with their Agreement. The Tribunal issued an award in excess of $60 million dollars in favor of TermoRio. Shortly after the Tribunal issued its award, Electranta filed an “extraordinary writ” in a Colombia court seeking to overturn the award. In due course, the Consejo de Estado (“Council of State”), Colombia’s highest administrative court, nullified the arbitration award on the ground that the arbitration clause contained in the parties’ Agreement violated Colombian law.
Following the judgment by the Consejo de Estado, TermoRio and co-appellant LeaseCo Group, LLC (“LeaseCo”), an investor in TermoRio, filed suit in the District Court against Electranta and the Republic of Colombia seeking enforcement of the Tribunal’s arbitration award. Appellants contended that enforcement of the award is required under the Federal Arbitration Act, 9 U.S.C. § 201 (“FAA”), which implements the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, 21 U.S.T. 2517, reprinted in 9 U.S.C. § 201 (historical and statutory notes) (“New York Convention”). The District Court dismissed LeaseCo as a party for want of standing, dismissed appellants’ enforcement action for failure to state a claim upon which relief could be granted, and, in the alternative, dismissed appellants’ action on the ground of forum non conveniens. TermoRio S.A. E.S.P. v. Electrificadora del Atlantico S.A. E.S.P., 421 F. Supp. 2d 87 (D.D.C. 2006).
We affirm the judgment of the District Court. The arbitration award was made in Colombia and the Consejo de Estado was a competent authority in that country to set aside the award as contrary to the law of Colombia. See New York Convention art. V(1)(e) (“Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked . . . if that party furnishes . . . proof that: . . . [t]he award . . . has been set aside . . . by a competent authority of the country in which, or under the law of which, that award was made.”). Because there is nothing in the record here indicating that the proceedings before the Consejo de Estado were tainted or that the judgment of that court is other than authentic, the District Court was, as it held, obliged to respect it. See Baker Marine (Nig.) Ltd. v. Chevron (Nig.) Ltd., 191 F.3d 194 (2d Cir. 1999). Accordingly, we hold that, because the arbitration award was lawfully nullified by the country in which the award was made, appellants have no cause of action in the United States to seek enforcement of the award under the FAA or the New York Convention.