Arbitration

• Pages: 2-3

2Volume 18, January–March 2012 international law update

© 2012 Transnational Law Associates, LLC. All rights reserved. ISSN 1089-5450, ISSN 1943-1287 (on-line) | www.internationallawupdate.com

ARBITRATION

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      

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  

       L

   B

Belize is a country slightly smaller than

Massachusetts, formerly British Honduras. It is

situated just south of Mexico and north of Guatemala.

In September 2005, the Prime Minister of Belize

executed an accommodation agreement with Belize

Telemedia Limited on behalf of the government of

Belize. e agreement allowed Telemedia to acquire

property in order to better accommodate the

government’s telecommunications needs. It would

also entitle Telemedia to a tax set-o, to favorable

business tax treatment, and to exemption from

import taxes.

According to the agreement, Belize law would

govern the agreement and that if Telemedia were

to sue the government of Belize on the agreement,

then the government would irrevocably and

unconditionally waive its sovereign immunity. e

agreement also stated that the London Court of

International Arbitration (LCIA) would resolve any

contract disputes pursuant to its rules.

In February 2008, a new Prime Minister

announced that the agreement was invalid and that

he refused to abide by it. Telemedia claimed a breach

of the agreement and, on May 9, 2008, invoked the

LCIA arbitration clause. e Belize government

took no part in the proceedings.

e tribunal found that the agreement was valid

and, in March 2009, issued a nal award against

Belize in the amount of $38 million. e Prime

Minister continued to argue that the agreement

was invalid and that the ruling of a foreign

arbitral tribunal did not bind his government.

Telemedia assigned the nal award to Belize Social

Development Limited (BSDL).

On April 6, 2009, the Attorney General of

Belize sued Telemedia and BSDL in the Belize

Supreme Court. e court issued an ex parte interim

injunction prohibiting Telemedia and BSDL from

pursuing enforcement of the nal award in any

jurisdiction outside of Belize. Telemedia sought to

have the injunction discharged and the nal award

declared valid and binding on the government.

Instead, the court extended the injunction.

In November 2009, BSDL petitioned a U.S.

district court to conrm and enforce the nal

award in accordance with section 207 of the Federal

Arbitration Act (FAA), 9 U.S.C. § 201-208 (2006).

e Government moved in the alternative to stay

or to dismiss the petition. BDSL then moved to

suspend the district court’s scheduling order and

for a status conference. e district court denied

BSDL’s motion to suspend and its later motions

to clarify. e court granted Belize’s motion to stay

the petition to conrm pending the outcome of the

Belize Supreme Court case.

BSDL appealed the stay order or, if the order is

not yet nal, asks the appellate court to treat it as a

petition for a writ of mandamus. e U.S. Court of

Appeals for the District of Columbia Circuit vacates

the stay order and remands the case to the district

court for further proceedings. e Court begins by

determining whether the lower court’s stay is a nal

decision for the purpose of appeal under Section

1291. e Court states that a stay is not ordinarily

a nal order; however, there is the “eectively out

of court” doctrine that supports an appeal. e

Court states, “e doctrine’s applicability, however,

is limited to cases where the object of the stay is to

require all or an essential part of the federal suit to

be litigated outside of federal court.” [Slip op. 8].

“e stay at issue may be suciently indenite

as to require a nding of pressing need, but it is

not so indenite as to constitute the equivalent of a

dismissal under the ‘eectively out of court’ doctrine.”

erefore, the Court holds that the method of appeal

BSDL calls for does not aord it an adequate means

of attaining the relief it requests. In the alternative,

BSDL invokes the collateral order doctrine. e

Court notes that it has previously acknowledged the

similarities between the requirements for mandamus

and collateral order review.

“In cases where the claim of appealability is not

insubstantial, the court is mindful of the advantage

of limiting the use of appellate recourse in response

to stay orders, yet keeping the door open for the

occasional case reecting abuse of discretionary

authority. Because BSDL has shown a clear and

indisputable right to the issuance of the writ and

the writ is appropriate here, we proceed with the