D.C. Circuit finds 3-Month period to vacate Arbitral Award Statutory

D.C. Circuit finds 3-Month period to vacate Arbitral Award Statutory

 

By: Louis M. Solomon

 

Argentine Republic v. National Grid PLC, No. 10-7093 (D.C. Cir. Mar. 2011), [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law] is a per curiam decision of the D.C. Circuit addressing an important issue that affects international practice particularly:  can a federal court extend time deadlines imposed by statute when dealing with the exercise of a right under international convention or treaty, here the New York Convention. 

The underlying dispute related to an arbitration under a Bilateral Investment Treaty between Argentina and the United Kingdom.  The panel determined that Argentina had violated the treaty by implementing several emergency measures in response to the Argentine financial crisis.  National Grid was awarded $53 million plus costs and interest. 

Argentina attempted to move to vacate the award within the statutory three month deadline but had to move the District Court under Fed. R. Civ. P. 6(b)(1) since it could not complete service within the statutory time frame because National Grid was headquartered in the U.K., and service would have to effected under the Hague Convention. 

The D.C. Circuit ruled that National Grid had not waived its right to object to the untimeliness and then ruled that, as a matter of law,  Rule 6(b) could not be used to extend periods of time dictated by statute.  In so holding the Court of Appeals stated that it was joining every other court to have addressed the issue.  The Court of Appeals so held even though the text of Rule 6(b) was amended in 2007 to eliminate the limiting references to "time periods set out in the Federal Rules or by court order".  That change arguably suggested that the district courts had the authority to extend even statutory deadlines.  The Court of Appeals stated that the modification of the Rule was stylistic only and had no substantive effect.

The Court of Appeals did not discuss how a person or entity trying to comply with the three-month rule can do so if, by reason of procedures not under its control, it simply could not do so.  In this case the Court of Appeals found that Argentina had ample opportunity to present its substantive grounds for vacating the arbitral award but had not done so.

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