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Belize Bank Ltd. v. Government of Belize

United States Court of Appeals, District of Columbia Circuit

March 31, 2017

Belize Bank Limited, Appellee
v.
Government of Belize, Appellant

          Argued February 9, 2017

         Appeals from the United States District Court for the District of Columbia (No. 1:14-cv-00659) Juan C. Basombrio argued the cause for the appellant. Creighton R. Magid was with him on brief.

          Mahesha P. Subbaraman and Janet C. Evans were on brief for the amicus curiae Professor Richard W. Painter in support of the appellant Government of Belize.

          Louis B. Kimmelman argued the cause for the appellee. Dana C. MacGrath and Ryan C. Morris were with him on brief.

          Before: Garland, Chief Judge, and Henderson and Wilkins, Circuit Judges.

          OPINION

          Karen LeCraft Henderson, Circuit Judge

          On January 15, 2013, an arbitral tribunal in London, England, found the Government of Belize (Belize) in breach of a settlement agreement with The Bank of Belize Limited (Bank). The tribunal therefore ordered Belize to pay the Bank a substantial monetary award. After attempts to enforce the award in Belize failed, the Bank commenced this action in the district court, asking the court to confirm the arbitral award and enter judgment in its favor. In a well-reasoned order, the district court granted the Bank's petition. Belize Bank Ltd. v. Gov't of Belize, 191 F.Supp.3d 26 (D.D.C. 2016).

         On appeal, Belize raises multiple challenges to the district court's judgment. We have accorded each of Belize's arguments "full consideration after careful examination of the record, " Bartko v. SEC, 845 F.3d 1217, 1219 (D.C. Cir. 2017) (quoting Ozburn-Hessey Logistics, LLC v. NLRB, 833 F.3d 210, 213 (D.C. Cir. 2016)), but find them either largely asked and answered by Circuit precedent, see BCB Holdings Ltd. v. Gov't of Belize, 650 F.App'x 17 (D.C. Cir. 2016) (per curiam); Belize Soc. Dev. Ltd. v. Gov't of Belize, 794 F.3d 99 (D.C. Cir. 2015); Belize Soc. Dev. Ltd. v. Gov't of Belize, 668 F.3d 724 (D.C. Cir. 2012), or otherwise properly resolved by the district court. Only one issue raised by Belize warrants further discussion-whether the district court's enforcement of the arbitral award violated the New York Convention because it was "contrary to the public policy of" the United States. Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 ("New York Convention"), art. V(2)(b), 21 U.S.T. 2517, T.I.A.S. 2517, T.I.A.S. No. 6997, 330 U.N.T.S. 3 (1970); 9 U.S.C. § 207. For the reasons that follow, we believe the district court judgment is consistent with the New York Convention and therefore affirm.

         I. Background[1]

         On December 9, 2004, Said Musa, the Prime Minister of Belize, signed a confidential agreement under which Belize agreed to serve as the guarantor of a loan made to a Belizean health services provider by the Bank. By 2007, that health services provider was in default, making Belize liable for the outstanding loan balance. Pursuant to a March 23, 2007 settlement agreement, Belize agreed to pay the debt in full. Shortly thereafter, the settlement agreement became public knowledge and a firestorm erupted-protesters, branding the deal corrupt, marched on the Belizean capital; and Belizean public interest groups, believing that Prime Minister Musa lacked the authority to financially bind Belize without the approval of the Belizean National Assembly, challenged the settlement agreement in the Belizean court. Responding to the pressure, Belize refused to make any payment pursuant to the settlement agreement with the Bank.

         Following Belize's default, the Bank-in accordance with a dispute resolution clause included in the settlement agreement-began arbitration proceedings against Belize in London, England, under the Rules of the London Court of International Arbitration (LCIA). The arbitral tribunal overseeing the proceedings was to consist of three members, one appointed by each party and the third appointed jointly by the two parties' members. Because Belize largely declined to participate in the early stages of the arbitration, however, the LCIA had to step in and appoint Belize's arbitrator in Belize's stead.[2] The LCIA nominated Zachary Douglas as Belize's member of the arbitral tribunal.

         In March 2012, five years after Douglas's initial appointment, Belize challenged Douglas's continued service on the arbitral tribunal. Belize argued that another member of the English chambers Douglas belonged to, Matrix Chambers, had-in previous unrelated matters-advised a partial owner of the Bank and represented other interests adverse to Belize. Belize questioned Douglas's impartiality as a member of the arbitral tribunal and argued that Douglas had a duty to disclose information detailing Matrix Chambers's practices and representations, or, alternatively, that Douglas should be removed from the arbitral panel.

         The LCIA then created a three-member "Division" to consider Belize's challenges. Belize Bank Ltd. v. Gov't of Belize, Case No. 81116 (London Ct. Int'l Arb. 2012). The Division rejected both of Belize's alternatives. Id. at 11-18. Analyzing the disclosure issue, the Division relied on the "British Rule, " under which barristers in the same chambers- unlike lawyers in a traditional American law firm-are presumed to be independent practitioners. Id. at 14 ("Barristers are sole practitioners. Their Chambers are not law firms."). Although the Division recognized that "chambers ought not to be used as a shield to preclude a fact-based inquiry as to whether a justifiable doubt [as to impartiality or independence] may be raised by barristers from the same chambers acting as arbitrator and party counsel in the same proceeding, " it found that Douglas's alleged conflict of interest was too attenuated to give rise to a duty to disclose. Id. at 15. ("There is no suggestion . . . that any barrister from Matrix Chambers, other than Professor Douglas, has acted in the present proceeding."). Although the Division recognized that no "hard-and-fast" rule existed that excused a barrister's disqualification based on the activities of another barrister belonging to the same chambers, it determined that the "totality of the relevant circumstances in this case" weighed against Douglas's disqualification in that Douglas himself had not acted for or against Belize or the Bank in the past, no barrister in Matrix Chambers (other than Douglas) was acting for or against the Bank or Belize in the arbitral proceeding before the LCIA and Belize had notice of the fact that barristers in the same chambers are independent practitioners. Id. at 17.

         Belize did not take the Division's adverse decision well, withdrawing from the arbitration proceedings and refusing to participate thereafter. Nonetheless, the proceedings continued and, on January 15, 2013, the arbitral tribunal found Belize in breach of its settlement agreement with the Bank. The tribunal ordered Belize to pay the Bank the sum of BZ$36, 895, 509.46, ...


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