Notice of Arbitration 1111 1~3. ln particular, they alleged that Costa Rica failed “to provide prompt and adequate compensation for its defacto and dejure takings,” contrary to CAFTA Article 1().7. [a’. at 1111 17, 14. They also contended that Costa Rica failed to provide “access to the necessary administrative and/orjudicial means for the prompt review of its a'efaclo expropriation of certain segments of the lots” in question, in violation ofCAl""l`A Article 10.5’s minimum standard of treatment requirement Ia’.
Costa Rica objected to the Tribunal’s jurisdiction on the grounds that the claims fell outside of CAFTA’s three-year limitation period, and that the alleged breaches occurred before CAFTA entered into force between Costa Rica and the United States on January 1, 2()()9. See lnterim Award 11 109. On the merits, Costa Rica argued that the petitioners “were, or should have been, aware that their properties, or portions of them, were subject to expropriation, as provided by the law creating the Park,” and that, to the extent that any property has been expropriated, “1itwas1 not . . . an uncompensated expropriation.” Ia’. at 11 8. D. The lnterim Award
()n October 25, 2016, the Tribunal issued an lnterim Award regarding its jurisdiction over petitioners’ claims. Ia’. at p. i. 1n the Award, the 'fribunal first noted that CAFTA imposed two temporal limitations on the Tribunal’s jurisdiction to hear a claim. See id. at 11 237. First, Article 10.3 of CAFTA holds that its provisions do not bind Costa Rica “to any act or fact that took place or any situation that ceased to exist before” Costa Rica implemented the agreement on January 1, 2009. See CAFTA, art.
1().1.3, 19 U.S.C. §§ 4()()1, 4011. Second, CAFTA makes clear that “[n]o claim may be
submitted to arbitration . . . ifmore than three years have elapsed from the date on which the claimant first acquired, or should have first acquired, knowledge of the breach alleged . . . and knowledge that the claimant . . . has incurred loss or damage.” See id. at art. 10.18.1. The Tribunal then proceeded to assess petitioners’ claims with these limitations periods in mind.
'1`he Tribunal first determined that the Berkowitz claimants had constructive knowledge of the expropriation oftheir lots as ofNovember 27, 2006. lnterim Award 1111 96(_c), 265. /\s a result, the 'l`ribunal concluded that it lackedjurisdiction to hear any of petitioners` expropriation claims under CAFTA Article 10.7 because the alleged expropriations occurred before the effective date ofCAFTA, and because petitioners knew about the alleged breach over three years before they sought arbitration. Id. at 1111 265-268. 'l`he Tribunal went on to conclude, however, that even if petitioners could not pursue claims under CAFTA Article 10.7 for expropriation, they could pursue claims under CAFTA Article 10.5 for violations of the minimum standard of treatment, provided that the Costa Rican judgment assessing compensation for their expropriated property was entered within the limitations period and there was evidence that the judgment was made with “manifest arbitrariness and / or . . . blatant unfairness.” [cz'. at 11 286. Thus, because Costa Rica entered judgments with respect to Lots 133 and 138 in 2013 and 2012, rcspcctively, which were both prior to the commencement of arbitration but within the limitations period, the Tribunal concluded that the Berkowitz claimants could pursue claims under CAFTA Article 10.5 for those properties. [a’. at 11 286, Tables 10, 13.
Judgments assessing compensation for Lots B5 and 136, however, were rendered after
Arbitration commenced, so the Tribunal sought more argument on whether it had jurisdiction to hear Article 10.5 claims regarding those Lots. [a’. at 1111 289~95. Finally, the Tribunal determined that it did not have jurisdiction over Lot Bl because neither party provided evidence showing that ajudgment on compensation for that lot had ever occurred. Ic!. at 1111 274, 288.
E. Subsequent Proceedings
Because of the “heavy factual detail of th[e] case,” after the Tribunal issued the lnterim Award, it invited the parties to propose corrections within 30 days, as provided for in Article 38 of the United Nations Commission on lnternational Trade Law Arbitration Rules (“the UNCITRAL Arbitration Rules”), G.A. Res. 68/109, art. 38, U.N. Doc. A/RES/68/109 (Dec. 16, 2013). See MacGrath Decl. Ex. D 1Dkt. #23-51 1-2. Although the parties knew that-contrary to the Tribunal’s finding_a judgment on compensation for Lot 131 had, in fact, occurred, they did not supplement the record with evidence ref1ecting that fact within the 30-day period. lnstead, petitioners represented to the Tribunal that they “ha[d] not identified any errors . . . to which they wish[ed] to draw the 'fribunal’s attention.” Third MacGrath Decl. Ex. B [Dkt. #28-31 1.
But on January 23, 2017, the Berkowitz claimants filed their Petition in this Court, seeking to vacate or set aside the lnterim Award. See Pet’rs’ Pet. On March 20, 2017, while the Berkowitz claimants’ Petition was pending before this Court, the Tribunal contacted the parties, noting that it had become aware of the Bl judgment, even though the parties had not disclosed thejudgment within the 30-day period following the issuance of the Award provided for by Article 38 ofthe UNCITRAL Arbitration Rules.
See 'l`hird l\/[acGrath Decl. Ex. A 1Dkt. 1128-21 1. Importantly, the Tribunal noted that, although it had “reached a decision on the question of its jurisdiction regarding Lot Bl in its lnterim Award, it remain[ed] seised of the dispute between the Parties,” and was “not fimcl'us officio.” Ia'. at 2. The Tribunal accordingly asked the parties to submit the Bl Judgment, which Costa Rica did on April 4, 2017. See id.; Third MacGrath Decl. Ex. C 11)kt. #28-41 1-2. After reviewing the Bl Judgment, the Tribunal notified the parties that it needed to correct the lnterim Award. [d. T he l3erkowitz claimants opposed any correction of the lnterim Award on the ground that it contained legal and factual errors, and they moved for a preliminary injunction in this Court to enjoin the Tribunal from correcting the Award. See l\/lot. for Prelim. Inj. 1Dkt. #27_1. Shortly thereafter, the 13erkowitz claimants filed a notice with the Tribunal indicating their voluntary withdrawal oftheir claims. See Fourth l\/lacGrath Decl. Ex. D 1Dkt. #29-51 1-3.
On May 30, 2017, the Tribunal issued a Corrected lnterim Award (“the Corrected Award”) and a Procedural Order terminating the Arbitration (“the Procedural Order”). See Fourth MacGrath Decl. Ex. A (“Corrected Award”) [Dkt. #29-21; Fourth l\/lacGrath Decl. Ex. 13 (“Procedural Order”) [Dkt. #29-31. The Corrected Award made clear that, in light of the 131 judgment, the Tribunal would consider arguments from petitioners regarding whether the Tribunal has jurisdiction to hear Article 10.5 claims with respect to that property. See Corrected Award 11 308(3), Table 9. But because the Berkowitz claimants voluntarily withdrew their claims, the Tribunal terminated the Arbitration. See Procedural Order 11 39. The issuance of the Corrected Award mooted petitioners’ motion
for a preliminary injunction. See Notice of Withdrawal of Mot. [Dkt. #301.
DISCUSSION A. Default Judgment
Before turning to the merits of this dispute, 1 must first address one procedural hurdle that both parties have raised: whether Costa Rica defaulted by allegedly failing to timely reply to the Petition. The Berkowitz claimants filed their Petition in this Court on January 23, 2017, pursuant to Scction 10 ofthe FAA, 9 U.S.C. § 10. ln an attempt to serve Costa Rica, petitioners delivered a copy of their Petition to the Washington, D.C. office of Sidley Austin LLP (“Sidley”), which is the law firm that represented Costa Rica in the underlying Arbitration. See Smith Aff. 1Dkt. #13-1] 1. Although Sidley currently represents Costa Rica in this case, at the time that petitioners served Sidley, Costa Rica had not retained the law firm to represent it. Ia’. On February 2, 2017, Sidley sent the Berkowitz claimants a letter explaining that the firm was not authorized to accept service on behall`of Costa Rica. See Letter, February 2, 2017 1Dkt. #22-21.
ln another attempt to effect service, petitioners delivered a copy of the Petition in this case to the Costa Rican l\/linistry of Foreign Trade and the Embassy ofCosta Rica in Washington, D.C on January 25, 2017. See Smith Aff. 1. Under the Hague Service Convention, however, Costa Rica specifically designated the l\/linistry of Foreign Affairs and Worship as the authority designated to receive foreign judicial documents. See Broaa' v. Mannesmcmn Anlagenbau AG, 196 F.3d 1075, 1076 (9th Cir. 1999) (“The Hague |:Service1 Convention requires plaintiffs who sue foreign defendants in signatory countries to request that a designated central authority execute service of process.”); (,‘().s'm Rica - (.‘emml Az//h()rily & pracl/,'cal information HAGUE CoNFERl-:NCE oN PRivATt-: INT’L
fsz lleuiz (`c)Nvi:N'l'ic)N oN run SnvaCl-; AaRo/\D or JUDlCI/\L & Ex'rRAJUDICmL Doc‘ulvn,~:N*rs lN Civlr & Cc)MMEIzClAL MA'rTERs, Nov. 15, 1965 (designating the Ministry of Foreign Affairs and Worship as Costa Rica’s central authority).4 ThuS, this attempt, tOo, failed to effect service.
After these unsuccessful attempts to serve Costa Rica, the Berkowitz claimants moved for this Court to issue a summons to the Ministry of Foreign Affairs and Worship, which 1 granted on February 3, 2017. See 2/3/17 Dkt. Entry. Petitioners then mailed their Request for Service Abroad of Judicial Documents to the Ministry of Foreign Affairs and Worship on February 22, 2017. See A'ff. ofAdditional Serv. 11 2 1Dkt. #16-
l |. Costa Rica accepted service on l\/Iarch 28, 2017. See Cert. of Serv. 1Dkt. #19-11.
The following week, the Berkowitz claimants submitted to this Court an affidavit for default, claiming that Costa Rica had been served either on January 23, 2017 or on January 25, 2017. See Smith Aff. 1. They further alleged that Costa Rica had defaulted by failing to respond to the Petition within 14 days of service. [a’. at 2. Accordingly, the Clerk of Court entered default against Costa Rica on April 6, 2017. Clerk’s Entry of Default 1Dkt. #151. The very next day_ Costa Rica entered an appearance in this case and informed the Court that it was not served with the Petition until March 28, 2017. See Notice oflntent to Seek Vacatur of Default 1Dkt. #191. Costa Rica also made clear its intention to timely submit a response to the Petition by l\/lay 30, 2017. Ia’. at 2.
()n April 20, 2017, petitioners moved for defaultjudgment against Costa Rica,
4 This authority is available at https://www.hcch.net/en/states/authorities/detailsS/?aid:l068_
pursuant to Federal Rule ofCivil Procedure 55. See Mot. for Default J. 1Dkt. #21]. 1n their motion, the Berl
That same day, Costa Rica filed a Motion to Vacate the Entry of Default pursuant to Federal Rule of Civil Procedure 55(c), arguing that the Foreign Sovereign Immunities Act (“FSIA”) provides a respondent with 60 days after service of process to respond to a petition. See l\/fot. to Vacate Entry ofDefault 1Dkt. #22-11 5; 28 U.S.C. § 1608(d). According to Costa Rica, petitioners did not serve the Republic until March 28, 2017, and thus the 60-day period had not yet expired. See Mot. to Vacate Entry of Default 6. Both motions are now ripe. Upon review of the motions and the accompanying documents, 1 find that Costa Rica was not properly served until March 28, 2017.
Pursuant to the FSIA, a foreign state is entitled to 60 days after the completion of proper service to respond to a petition filed in U.S. court. See 28 U.S.C. § 1608(d) (“1A] foreign state . . . shall . . . respon[d] . . . within sixty days after service has been made under this scction.”); see also Keegel v. Key West & Cczribbean Traa’l`ng Co., Inc., 627 F.2d 373, 374 (D.C. Cir. 1980) (“No obligation to [respond] ar[ises] until after service [is] effected.”). The relevant issue, then, is when petitioners properly effected service upon Costa Rica.
The Berkowitz claimants argue that they were not required to comply with the
FSIA because they properly served Costa Rica pursuant to Section 12 of the FAA. Mot.
for l)el`ault .1. 9. But the Supremc Court has made clear that the “FSIA provides the sole basis for obtaining jurisdiction over a foreign state in federal court.” Argentz`rze Republic v. Ameraa’a Hess Shz`pping Corp., 488 U.S. 428, 439 (1989). And “1S1ection 1608(a) 1of the FSIA] sets forth the exclusive procedures for service” on a foreign state. Tmrzsaero, [nc. v. La Fuerza Aerea Boll`lvl`ana, 30 F.3d 148, 154 (D.C. Cir. 1994) (internal quotation marks omitted). Thus, service on Sidley and the Costa Rican Embassy pursuant to the FAA did not qualify as effective service for the purposes of calculating the 60-day limitations period. See [d. at 153-54 (holding that service was ineffective where plaintiff served a foreign statc’s °‘Alnbassador and Consul General in Washington, and . . . First l\/linister . . . but never the l\/finistry of Foreign Affairs or the Secretary of State”). Alternatively, the Berl
1608, such that they properly effected service by delivering documents to the Ministry of
Foreign "frade. Resp. in ()pp’n to l\/lot. to Vacate Entry of De'fault 1Dkt. #241 12. Unfortunately for petitioners, this too, proved to be ineffective service.
Courts have interpreted the “special arrangement” language of Section 1608 narrowly, such that a special arrangement exists only where the language is “all encompassing” rather than “confined to the contract or agreement at issue.” Orange Ml'a'clle E & Afrl'ca v. Republic OfEaaalorl`al Galnea, No. 15-CV-849 (Rl\/[C), 2016 WL 2894857, at *4 (D.D.C. May 18, 2016). The plain text of Annex G makes clear that it does not apply to all attempts to serve Costa Rica in any matter; instead, it is limited to communications made pursuant to the dispute settlement section of Chapter 10 of CAFTA. As relevant here, Annex G expressly provides that “[n]otices and other documents in disputes under [Chapter 101 Section B shall be served on” the Foreign '1`rade l\/linistry. See CAFTA, Ch. 10, § 13, Annex G. And section 13 of Chapter 10 sets forth the dispute settlement provisions for investor-state arbitrations under CAFTA. See la’., Ch. 10, § 13. As such, Annex G plainly is not an “all encompassing” provision that governs all communications between a claimant and a CAFTA member state. lnstead, Annex G covers communications between a claimant and a CAFTA member state regarding arbitration disputes under the treaty. Annex G does not apply to the service of judicial documents in subsequent vacatur proceedings in United States domestic courts. See, e.g., Orange Ml`a’a’le E. 2016 WL 2894857, at *5 (“[T]he Agreement provided for dispute resolution through . . . binding arbitration[, which was] the outer limit of the 1Agreement’s1 reach. A Petition to 1confirm1 the ensuing arbitral award is another
matterione that must . . . conform to FSIA’s prerequisites to jurisdiction in this Court.”).
li`or these reasons, 1 find that petitioners" attempt to serve Costa Rica pursuant to Annex G was ineffective, and thus Costa Rica was not properly served until March 28, 2017. As such, Costa Rica’s response to the 13erkowitz claimants’ Petition in this case was timely filed, and Costa Rica is accordingly not in default. 1 therefore vacate the Clerk’s entry of default and proceed to the substance of the Petition.
B. Petition to Vacate the lnterim Award
The Berkowitz claimants ask this Court to set aside the Tribunal’s lnterim Award pursuant to Section 10 of the FAA, 9 U.S.C. § 10, on the ground that the Award exceeded the authority granted to the '1`ribunal by the parties. Pet’rs’ Pet. 1. Costa Rica counters that this Court does not have jurisdiction to review the lnterim Award because it was not final. Resp’t’s ()pp’n 14. For the following reasons, 1 find that Costa Rica is correct.
1n general, it is improper for a district court to interfere with an international arbitration proceeding before the tribunal issues a final ruling. See A)n. Posl'al Wor/cers Union v. U.S. Postal Serv., 422 F. Supp. 2d 240, 246 (D.D.C. 2006) (“10]rdinarily, an arbitration award must be final and binding before a district court may vacate or enforce it.”). Indeed, “1t_1he Arbitration Act contemplates that courts should not interfere with arbitrations by making interlocutory rulings.” LaPraa’e v. Kz`cla’er Peabocly & C0., Inc., 146 F.3d 899, 903 (D.C. Cir. 1998). And our Circuit has held that “it is a cardinal principle of arbitration that 1arbitration1 awards are reviewable and enforceable only if they are ‘final’--that is, if they purport to resolve all aspects ofthe dispute being arbitrated.” A/n. Fea”n ofGov ’l E/nps., AFL-CIO, Local 3090 v. Fea’. Labor Relatl`ons
Azlth., 777 F.2d 751, 755 (D.C. Cir. 1985) (citing Mz`chaels v. Mar[forum Shl`ppz`ng, S.A.,
624 F.2d 411, 413-14 (2d Cir. 1980)). Other Circuits to address the issue have similarly held that the Federal Arbitration Act precludes the interlocutory review of arbitration decisions See, e.g., Mz`cliaels, 624 F.2d at 414 (“Under the 1FAA1 . . . a district court does not have the power to review an interlocutory ruling by an arbitration panel.”); Sclzal'l v. Avenlura Liln()usine & Transp. Serv., Inc., 603 Fed. App’x 881, 887 (1lth Cir. 2015) (“[T:|he FAA allows review of final arbitral awards only, but not of interim or partial rulings.”); Qul`xlar, lnc. v. Braa’y, 328 Fed. App’x 317, 320 (6th Cir. 2009) (“1C10urts generally should not entertain interlocutory appeals from ongoing arbitration proceedings.”); Blue Cr()ss Blue Shlelcl ofMass, Inc. v. BCS Ins. CO., 671 F.3d 635, 638 (7th Cir. 201 1) (“1J1udges must not intervene in pending arbitrations.”). The question 1 must decide, then, is whether the lnterim Award was final, and thus reviewable
Under the “complete arbitration rule,” for an arbitration to be final, “the arbitrators must have decided not only the issue of` liability ofa party on the claim, but also the issue of damages.” United Transp. Union v. Tral`lways, lnc., No. 86-CV-1502, 1987 WL 8730, at *l (D.D.C. l\/[ar. 12, 1987). lndeed, “1t1he courts seem to agree that, when ‘a substantive task remain1s1 for the arbitrator to perform,’ an award is not final.” A/n. Postal Worke/”s Union, 422 F. Supp. 3d at 246 (quoting McKz`nney Restoralz'On CO. v. [ll. Dist. Councll No. ], 392 F.3d 867, 871 (7th Cir. 2004)). lmportantly, the Tribunal’s subjective beliefs about the finality of its award is a key factor in determining whether the award was, in fact, final. See A/n. Poslal Workers Unz'on, 422 F. Supp. 2d at 246 (noting
that an award will be considered final when it is “‘intended by the arbitrator to be his
complete determination of every issue submitted to him (quoting McKl`nney Restoral'ion
C()., 392 1"`.3d at 871)). rl`hus, 1 must assess whether the evidence demonstrates that the
fl`ribunal believed its assignment 1was1 completed.”’ ]a’. (quoting MeKinney Restoralion, 392 F.3d at 872). Unfortunately for the l3erkowitz claimants, the evidence in this case makes clear that the Tribunal did not so believe.
lndeed, by letter dated March 20, 2017_after the Berkowitz claimants’ Petition had already been filed in this Court_the Tribunal noted that “1although1 1it1 reached a decision on the question ofits jurisdiction regarding Lot Bl in its lnterim Award, it remains seised of the dispute between the Parties. lt is notfunctas Q}j?clo.” Letter, l\/lar. 20, 2017. fn that same letter, the Tribunal requested that the parties submit “documents” concerning the Tribunal’s jurisdiction over Lot 131. Iol. This request for documents evidences the Tribunal’s belief that there were still “substantive task[s]” remaining for it to perform. See Am. Postal Workers Union, 422 F. Supp. 3d at 246. Similarly, in the Tribunal’s letter dated April 17, 2017, the Tribunal again noted that it “considers that it is notfanctus ojj“z`cz'O, being still seised of the dispute between the Parties.” Letter, Apr. 17, 2017 1Dkt. #28-41. And in the Procedural Order, the Tribunal stated:
Although the Tribunal reached a decision on the question of its jurisdiction
regarding Lot 131, it is notfunclus Q]Wclo and remains seised of the matter.
The decision of the Tribunal was expressly designated to be an “interim”
award, not a “final” award. That lnterim Award contemplated further
proceedings involving all Claimants, including both the Berkowitz
Claimants and Respondent. All parties thus remained subject to the arbitral
jurisdiction of the "1`ribunal even after the lnterim Award issued.
Procedural ()rder 11 35.
'l`his order makes clear that the Tribunal considered itself to be “seised” ofthe dispute,
which is not surprising, given that the lnterim Award merely resolved some jurisdictional
issues, while expressly contemplating the Tribunal’s intent to review additional evidence and assess the merits ofthe dispute at a later time.5 See lnterim Award 11 308. Petitioners concede that the “lnterim Award is not the ultimate, conclusive arbitral award on all claims submitted to arbitration,” but they argue that the lnterim Award was sufficiently final for this Court’s review because it resolved claims as to Lots 131 and B8 and “inost claims as to Lots 133, 135, and 136.” Pet’rs’ Pet. 11 42. But petitioners mischaracterize the nature of the lnterim Award. ln that Award, the Tribunal ruled that (l) it lacked jurisdiction to hear any claims with respect to Lot 131; (2) it hadjurisdiction to hear claims relating to Lots 133 and 138 to the extent that petitioners alleged arbitrariness or unfairness under CAFTA Article 10.5; and (3) “the Parties should be afforded an opportunity to be heard” on whether the Tribunal has jurisdiction over judgments respecting Lots 135 and 136 that were rendered after June 10, 2013. lnterim Award 11 308. The lnterim Award also expressly contemplates “consultation with the Parties” regarding “further proceedings” to allow the 'fribunal to decide these remaining
issues. la’. 1mportantly, the lnterim Award included no final rulings as to liability or
5 ln its Procedural Order, the Tribunal noted that the Berkowitz claimants decided “to withdraw their remaining claims,’7 so it accordingly “ordcr[ed] the termination ofthe proceeding with respect to the Berkowitz Claimants and their remaining Lots 131, 133, 135, B6, and 138.” Procedural Order1146. Petitioners argue that the Tribunal’s “termination ofthe arbitration proceedings weighs strongly in favor ofreviewing the lnterim Award in this Court.” Reply in Supp. of Pet’rs’ Pet. 1Dkt. #31] 6. Petitioners take the position that the Tribunal’s termination of proceedingsiupon their request*rendered the lnterim Award final. /a'. But the fact that petitioners voluntarily withdrew their claims before the 'l`ribunal-~after filing their Petition for vacatur in this Courtidoes not transform the lnterim Award into a final decision.
This is especially true in light of the fact that the Corrected Award did not resolve any ofthejurisdictional or merits issues still pending before the Tribuna| at the time of petitioners’ withdrawal oftheir claims. ln fact, the only substantive change the Tribunal made in the Corrected Award was its finding that it might havejurisdiction to hear claims related to liot 131. ln this way, the Corrected Award rendered the lnterim Award less final than it Was at the time Of Petitioners’ filing for vacatur in this Court. At bottom, petitioners’ argument on this point is nothing more than an attempt to evade the Tribunal’s jurisdiction, and l find that it is unavailing
¢¢'
damages, but instead principally addressed questions of the Tribunal’s jurisdiction and the justiciability of the Claimants’ case under the CAFTA.” Ia’. at 11 300. This language regarding “further proceedings” makes unequivocally clear the Tribunal’s intent to adjudicate the merits of the parties’ dispute upon its consideration of additional argument
Therefore, because the evidence clearly demonstrates that the Tribunal did not believe that its “assignment [was] completed,” McKz'nney Restoration, 392 F.3d at 872, 1 find that the lnterim Award was not a final, appealable judgment.
CONCLUSION
For the foregoing reasons, the Berkowitz claimants’ Petition to Vacate the lnterim
Arbitration Award is DENIED, and petitioners’ case is DISMISSED with prejudice A
separate Order consistent with this decision accompanies this Memorandum Opinion.
ilwaf…
RICHARDLJ./LEON United States District Judge