United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 9, 2017 Decided March 31, 2017
No. 16-7083
BELIZE BANK LIMITED,
APPELLEE
v.
GOVERNMENT OF BELIZE,
APPELLANT
Consolidated with 16-7089, 16-7094
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.
2
Before: GARLAND, Chief Judge, and HENDERSON and
WILKINS, Circuit Judges.
Opinion for the Court filed by Circuit Judge HENDERSON.
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,
3
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. Background1
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
1
The facts herein set forth are only those relevant to the
remaining issue before us. More complete details of the case are set
forth in Belize Bank Ltd., 191 F. Supp. 3d 26, 30-40 (D.D.C. 2016).
4
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
2
Such appointment in place of an absentee or non-performing
party is permitted by LCIA rules.
5
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,
plus interest at 17%, compounded on a monthly basis from
September 8, 2012, until the date of payment.
On April 18, 2014, the Bank filed a Petition to Confirm
Foreign Arbitration Award and to Enter Judgment in district
court. The district court granted the petition, concluding, inter
alia, that enforcement of the award in the United States was not
contrary to United States public policy under New York
Convention Article V(2)(b).3 Belize Bank Ltd., 191 F. Supp. 3d
at 38.
3
To the extent Belize argues that the district court did not
expressly determine that enforcement of the arbitral award was
consistent with United States public policy, we disagree. See
6
II. Analysis
The New York Convention is part of a “carefully crafted
framework for the enforcement of international arbitration
awards.” Belize Social Dev. Ltd., 668 F.3d at 729 (quotation
omitted). It is “clear that when an action for enforcement is
brought in a foreign state, the state may refuse to enforce the
award only on the grounds explicitly set forth in Article V of
the Convention.” TermoRio S.A. E.S.P. v. Electranta S.P., 487
F.3d 928, 935 (D.C. Cir. 2007) (quoting Yusuf Ahmed
Alghanim & Sons v. Toys “R” Us, Inc., 126 F.3d 15, 23 (2d
Cir. 1997)). Article V(2)(b), in turn, states that “[r]ecognition
and enforcement of an arbitral award may . . . be refused if the
competent authority in the country where recognition and
enforcement is sought finds that . . . [t]he recognition or
enforcement of the award would be contrary to the public
policy of that country.” New York Convention art. V(2)(b).
In TermoRio, we recognized that Article V(2)(b) does not
require a fly-specking of the ABA Model Rules of Professional
Conduct. See 487 F.3d at 938 (“[C]ourts have been very careful
not to stretch the compass of ‘public policy.’”). Rather, with
Appellant’s Br. 39. Belize correctly notes that the relevant issue is
not whether “the [LCIA] Division’s decisions rejecting Belize’s
challenges to the arbitral panel were well reasoned and consistent
with the LCIA’s Rules” but is instead “whether there is a U.S. public
policy against enforcement of [the] arbitral award[.]” Id. The district
court concluded that “nothing about the selection process of the
arbitrators in this case . . . would offend United States public policy.”
Belize Bank Ltd., 191 F. Supp. 3d at 38 (emphasis added). As we
explain infra, Douglas’s participation did not violate the United
States’ “most basic notions of morality and justice.” TermoRio S.A.
E.S.P. v. Electranta S.P., 487 F.3d 928, 938 (D.C. Cir. 2007)
(quotation omitted); see infra Part II.
7
appropriate deference to other sovereign nations, the “public
policy defense is to be construed narrowly to be applied only
where enforcement would violate the [United States’] most
basic notions of morality and justice.” Id. (quoting Karaha
Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas
Bumi Negara, 364 F.3d 274, 306 (5th Cir. 2004)); see also
Enron Nigeria Power Holding, Ltd. v. Fed. Republic of
Nigeria, 844 F.3d 281, 288 (D.C. Cir. 2016) (internal quotation
marks omitted) (“[T]he question of public policy is ultimately
one for resolution by the courts, and thus, if enforcement of the
Award based on [an arbitrational panel’s] interpretation of [a
contract] violates a public policy of the United States . . . then
the district court [is] obligated to refrain from enforcing it.”).
Because Belize challenges enforcement of the arbitral award,
it “bears the burden of proof” of meeting this exacting standard.
Karaha Bodas, 364 F.3d at 288.
Belize insists that the LCIA’s failure to disqualify—or
require certain disclosures from—Douglas created an
unacceptable appearance of impartiality viewed through the
lens of United States public policy. See Appellant’s Br. 39-43;
see also Amicus Br. 15-19. That is, Belize claims that, “if the
rules applicable to U.S. law firms were applied to Douglas and
Matrix Chambers,” it would be “undisputed that bias and a lack
of impartiality” tainted the arbitral tribunal so long as Douglas
was a member. Appellant’s Br. 41. To bolster its claim, Belize
highlights Justice White’s concurring opinion in
Commonwealth Coatings Corp. v. Continental Causality Co.,
wherein he noted that “where the arbitrator has a substantial
interest in a firm which has done more than trivial business
with a party, that fact must be disclosed.” 393 U.S. 145, 151-
52 (1968) (White, J., concurring); see also Positive Software
Sols., Inc. v. New Century Mortg. Corp., 476 F.3d 278 (5th Cir.
2007); Schmitz v. Zilveti, 20 F.3d 1043 (9th Cir. 1994). Because
Douglas belonged to Matrix Chambers and a member of Matrix
8
Chambers had previously done more than trivial business with
the Bank and against Belize, Belize argues that the LCIA’s
failure to disqualify or require disclosure from Douglas ran
afoul of Commonwealth Coatings and its progeny 4 and
therefore enforcement of the LCIA’s award violates United
States public policy.
We disagree. The cases upon which Belize relies address
a provision of the Federal Arbitration Act (FAA) that permits
a district court to vacate a domestic arbitration award “where
there was evident partiality or corruption in the arbitrators.” 9
U.S.C. § 10(a)(2). For the reasons set forth below, Belize has
failed to allege conduct that would warrant denial of
enforcement under our cases interpreting that standard. But
even if the alleged conduct did satisfy the FAA standard, we
would be unable to deny enforcement in this case. As we have
explained above, we may refuse to enforce this international
arbitration award “only on the grounds explicitly set forth in
Article V” of the New York Convention, TermoRio, 487 F.3d
4
In Commonwealth Coatings, Justice Black, joined by three
other justices, declared that “any tribunal permitted by law to try
cases and controversies not only must be unbiased but also must
avoid even the appearance of bias.” 393 U.S. at 150. Justice White
concurred in an opinion joined by Justice Marshall, advancing a
narrower rule: “arbitrators must tell the parties about any ‘substantial
interest [they have] in a firm’ that does business with one of the
parties.” Freeman v. Pittsburgh Glass Works, LLC, 709 F.3d 240,
252 (3d Cir. 2013) (citing 393 U.S. at 151-52). Three justices
dissented. 393 U.S. at 152. “Justice White’s concurrence is the
narrowest grounds for judgment, which means that it is the holding
of the Court . . . [and] that the plurality’s discussion of appearances
is nonbinding.” Freeman, 709 F.3d at 252; see Marks v. United
States, 430 U.S. 188, 193 (1977) (“When a fragmented Court decides
a case . . . the holding of the Court may be viewed as the position
taken by those Members who concurred in the judgements on the
narrowest grounds.” (citation and quotation marks omitted)).
9
at 935, and the only potentially relevant ground is that
enforcement of the arbitration award “would be contrary to the
public policy of [the United States],” New York Convention
art. V(2)(b). As we have also explained, this requires Belize to
show that Douglas’s participation in the arbitration violated
this country’s “most basic notions of morality and justice.”
TermoRio, 487 F.3d at 938. It has not done so.
As an initial matter, Article V(2)(b)’s requirement that we
replace foreign ethical standards with United States public
policy in scrutinizing an arbitral award, see New York
Convention art. V(2)(b) (authorizing forum state to refuse
enforcement of arbitral award if it “would be contrary to the
public policy of that country” (emphasis added)), does not give
us license to replace the facts of a case with an Americanized
version thereof. Contrary to Belize’s description, Matrix
Chambers is not a law firm—it is an English chambers.5 As the
5
Belize argues that because Matrix Chambers “marketed itself
as a collaborative venture,” we should equate Matrix Chambers with
an American law firm (rather than an English chambers). Appellant’s
Br. 32-34. Belize insists that “Matrix [Chambers] does not act as
independent practitioners; thus the British Rule should not apply.”
Id. English courts have stated, however, that they are “aware of no
case in which a problem has arisen due to the improper transmission
of information between members of chambers.” Laker Airways Inc.
v. FLS Aerospace Ltd. & Stanley Burton, [1999] QB 45 at 53 (Eng.)
(emphasis added). Although Matrix Chambers’s promotional
material discusses its “collaborative” approach and centralized
organizational structure, there is no indication that individual
barristers within Matrix Chambers share client confidences; in fact,
the promotional material expressly states that Matrix Chambers is
composed of “individual practitioners with a professional obligation
to promote the interests of [their] clients . . . .” JA 621. Douglas
himself reinforced this view, noting that “it would be a breach of a
barrister’s obligation of confidentiality” to share client information;
and further, he had “never inquired as to the practice of other
10
LCIA correctly noted, an English chambers is composed of
independent solo practitioners housed together and operating
under a common name, a structure vastly different from an
American law firm in which, inter alia, confidential client
information—as well as assets and liabilities—are shared
among partners. Belize Bank Ltd., Case No. 81116, at 17
(“Barristers are sole practitioners. Their Chambers are not law
firms.”); see also Laker Airways Inc. v. FLS Aerospace Ltd. &
Stanley Burton [1999] QB 45 at 52 (Eng.) (“[P]racticising
barristers are prohibited by the rules of their profession from
entering partnerships or accepting employment . . . .”). Thus,
we find the case law relied on by Belize, which details ethical
concerns underlying firm-wide imputation of conflicts of
interest, inapposite even if a violation of United States’
domestic arbitration requirements under the FAA were
sufficient to satisfy Article V(2)(b). That case law is premised
on “the presumption that ‘associated’ attorneys share client
confidences.” Hempstead Video, Inc. v. Inc. Vill. of Valley
Stream, 409 F.3d 127, 133 (2d Cir. 2005); Commonwealth
Coatings, 393 U.S. at 151 (White, J., concurring) (analyzing
arbitrator’s interest “in a firm” (emphasis added)). In weighing
Douglas’s alleged conflicts, the LCIA invoked the British Rule
not based on moral and ethical values different from those held
here in America; the LCIA simply addressed a different
model—a different type of legal practice—from the American
model.
In order to set aside an award under the FAA’s “evident
partiality” standard, the party challenging the award must
“establish[] specific facts that indicate improper motives on the
part of the arbitrator.” Al-Harbi v. Citibank, N.A., 85 F.3d 680,
683 (D.C. Cir. 1996). We believe an allegation that an arbitral
members of Matrix Chambers and [was] under no obligation to do
so.” JA 594.
11
tribunal member is a member of the same chambers as another
barrister who, in proceedings unrelated in fact and time,
represented a conflicting interest, is insufficient to meet that
burden, let alone to demonstrate that enforcement would
violate the United States’ “most basic notions of morality and
justice” as required to set aside an award under the New York
Convention. TermoRio, 487 F.3d at 938. First, “barristers are
all self-employed . . . precisely in order to maintain the position
where they can appear against or in front of one another.” Laker
Airways, [1999] QB 45 at 52; accord Stephan Landsman, The
Servants, 83 MICH. L. REV. 1105, 1106-07 (1985) (“Although
barristers must join a set of chambers, each is considered a sole
practitioner and is prohibited from entering into any
partnership arrangements. Each must develop and sustain his
or her own practice.” (footnote omitted)). Because the
chambers model is designed to protect a barrister’s
independence—a fact acknowledged by English courts, see
Laker Airways, [1999] QB at 52 (rule “prevent[ing] barristers
at the same chambers from appearing against one another . . .
has never been recognized, and the contrary practice is an every
day occurrence in the [English] Courts”), and scholars, see
Landsman, supra at 1106-07—we are aware of no ethical rule
that would require conflict imputation in these circumstances.
Without more, a perceived conflict arising from another
barrister’s practice does not give rise to the Commonwealth
Coatings duty to disclose or otherwise create an appearance of
impropriety.6 See 393 U.S. at 151-52 (White, J., concurring).
6
Indeed, we have already limited Commonwealth Coatings in
similar circumstances. In Al-Harbi v. Citibank, N.A., 85 F.3d 680
(D.C. Cir. 1996), we held that “the fact that [an arbitrator’s] former
law firm had represented [one of the parties] on matters unrelated to
the mediation or the underlying dispute” gave rise to only a
“marginally disclosable” conflict under Commonwealth Coatings, a
conflict that did not require the arbitrator to conduct any further
investigation. Id. at 682-83. Likewise, here, the events causing the
12
Second, we cannot say that Douglas’s membership in
Matrix Chambers threatened “[t]he arbitration process[’s] . . .
amicable and trusting atmosphere.” Id. at 151. Granted,
“insistence on the appearance of neutrality” is vital to
“ensuring the reality of fair adjudication.” Williams v.
Pennsylvania, 136 S. Ct. 1899, 1909 (2016). At the same time,
however, questions about appearance are resolved from the
perspective of the parties. See Matter of Andros Compania
Maritima, S.A. (Marc Rich & Co., A.G.), 579 F.2d 691, 700 (2d
Cir. 1978) (considering “Commonwealth Coatings principle of
disclosure” for arbitrator conflicts applicable only to
information “of which the parties cannot reasonably be
expected to be aware” (emphasis added)); see Freeman v.
Pittsburgh Glass Works, LLC, 709 F.3d 240, 253 (3d Cir.
2013). As the LCIA noted, the “chambers system of barristers
acting as independent practitioners” was “familiar” to Belize
based on Belize’s historical association with the British justice
system7 and the fact that, in an earlier proceeding involving
Belize, Matrix Chambers barristers appeared on opposing sides
purported conflicts occurred in 1994 and 2001, before Douglas
joined Matrix Chambers in 2006; Belize has alleged no potentially
conflict-creating event that occurred contemporaneously with
Douglas’s membership in Matrix Chambers. In the “arms-length”
chambers context, Douglas’s alleged conflict is more attenuated. See
supra at 4.
7
“Belize is a former British colony and, even after
independence in 1981, the [British] Privy Council remained its final
court of appeal until 2010. [Belize] has instructed English barristers
to represent it in appeals before the Privy Council . . . .” Belize Bank
Ltd. v. Gov’t of Belize, Case No. 81116, at 17 (London Ct. Int’l Arb.
2012).
13
of the same appeal with no objection from Belize. Belize Bank
Ltd., Case No. 81116, at 17.
Considered together, these factors demonstrate that
enforcement of the LCIA arbitral award would not violate the
United States’ most basic notions of morality and justice.
TermoRio, 487 F.3d at 938.
For the foregoing reasons, the judgment of the district
court is affirmed.
So ordered.