UNITED STATES DISTRICT COURT

FoR THE DISTRICT oF CoLUMBIA F I L E D
BRETT BERKoWITZ, TREvoR ) JAN 23 2018
§§§§gg;;§, and AARON ) C|erk. U.S. D|str|ct & Bankruptcy
, ) Courts for the D|strict of Co|umb|a
Petitioners, §
v. j Civil Action No. 17-148
REPUBLIC OF COSTA RICA, §
Respondent. §
MEMOR:ANDUM OPINION

 

January _Q, 2018 [Dkt. Nos. l, 21, 22]

Petitioners, Brett Berkowitz and his sons, Trevor Berkowitz and Aaron Berl<owitz
(collectively referred to as “the Berkowitz claimants” or “petitioners”), seek vacatur or
annulment of an interim award that Was issued during international arbitration
proceedings they filed against respondent, the Republic of Costa Rica (“Costa Rica” or
“respondent”). ln the underlying arbitration (“the Arbitration”), petitioners alleged that
Costa Rica’s decision to expropriate their beachside properties-and thus deprive them of
their residential real estate property investments_violated the Dominican Republic-
Central America Free Trade Agreement (“CAFTA”).

After a five-day hearing, the Arbitration Tribunal (“the Tribunal”) issued an
interim award (“the Interim Avvard” or “the AWard”) on jurisdiction, finding that it: (l)
lacked jurisdiction to hear claims With regard to one of petitioners’ properties; (2) had
jurisdiction to hear claims With respect to two of petitioners’ properties; (3) and needed

more briefing on Whether it had jurisdiction to hear claims regarding petitioners’ two

l

remaining properties. The Berl<owitz claimants then filed a Petition to Vacate the lnterim
Award in this Court, pursuant to Section lO of the F ederal Arbitration Act (“FAA”), 9
U.S.C. § l()_, on the ground that the Tribunal exceeded its authority in issuing the Award.
While their Petition was pending in this Court, the Berl<owitz claimants voluntarily
withdrew their claims before the Tribunal.

The Berkowitz claimants’ Petition is now fully briefed and ripe for my rcview.
Upon consideration ofthe parties’ submissions and the entire record herein, l find that the
Berl<owitz claimants’ Petition must be DENIED. This case accordingly will be
DlSl\/IISSED with prejudice

BACKGROUND

Before delving into the dispute at issue in the Arbitration, l must provide a brief
background on the land disputes that formed the basis of petitioners’ claims against Costa
Rica.
A. The Marine Park

ln the early l99()s, the government of Costa Rica became increasingly concerned
that tourist development near the country’s beaches would seriously affect the nesting of
leatherbacl< turtles in that area. See Pet. to Vacate Arbitration Award Ex. K (“lnterim
Award”) [Dl<t. #l-l l] jj 33. To reduce the impact of tourism on the leatherback turtles,
Costa Rica decided to establish a marine park in order to protect the turtles, as well as
other species and natural resources. Id. On July 9, .l99l, the l\/linistry of Natural
Resources, Energy and Mines accordingly issued an executive decree (“the 1991

Decree”), declaring the government’s intent to establish a park to be known as Parque

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Nacional l\/larino Las Baulas de Guanacaste (“the Park"`), which translates to National
Leatherback 'l`urtle Marine Park of Guanacaste. Icz’. at 1111 33, 60. The 1991 Decree
stipulated the exact boundaries of the parl<, and as relevant here, called for “a strip of land
of 75 meters from the public Zone,"’ which consists of the first 50 meters of land running
inland from the mean high tide line. [d. at ‘lH[ 33, 34. This decree essentially established
a marine park that extended 125 meters inland from the high tide mark. Ia’. at 11 33.

Four years later, on July 10, 1995, the Costa Rican Congress passed Law No. 7524
(“the Park Law”), which authorized the state to acquire, either through direct purchase or
expropriation, any private properties or portions thereof that are located within the
boundaries of the Parl<. See id. at 11 36. lmportantly, however, the Park Law established
the eastern boundary of the Park at 125 meters west of the mean high tide marl<, rather
than 125 meters easl of the mean high tide marl<, as contemplated by the 1991 Decree.
[d. at 1111 36¢37. In essence, the Park law created an offshore marine park. Id. The
conllict between the 1991 Decrce’s contemplated inland marine park and the Park Law’s
offshore park generated uncertainty regarding the boundaries of the Park. ld. at 37.
B. The Berkowitz Acquisitions

In 2003, Brett Berl<owitz began to purchase land along the Pacific coast of Costa
Rica, hoping to build luxury homes on that land in the future. See Pet. to Vacate
Arbitration Award, Ex. D. (“Notice of Arbitration”) [Dkt. #1-4] 11 43; lnterim Award 11
6(). Before purchasing the land, Brett Berl<owitz alleges that he met personally with the
Minister of the Environment and Energy, Carlos Manuel Rodriquez Echandi (“Eehandi”),

and received assurances that he would be permitted to develop this real estate, even

3

though large portions of it fell within the boundary set by the 1991 Decree»but not
within the boundary set by the Park Law. Interim Award 11 6(). According to petitioners,
Echandi stated “that the Government did not intend to expropriate the land in question,
they did not have the funds for it, and the Government and his Ministry did not intend to
prevent development of the private property bordering the public Zone . . . .” ]a’. Brett
Berl<owitz ultimately acquired five of the lots at issue in the Arbitration: Lots Bl l, 133,
B5, 136, and 1382 (“the Berl<owitz Lots”).3 See z`a’. 11254, Table 38.

But in 2005, the Costa Rican government adopted Resolution No. 2238-2005-
Sl'i'l`l§iNA, which set the Parl<’s eastern boundary 125 meters inland from the mean high
tide mark. Ia’. at 11 41 (i). Later that year, Costa Rica began initiating local court
proceedings to expropriate lots that the government deemed to be located within the Park,
including some of the lots owned by petitioners. See Pet. to Vacate Arbitration Award
(“Pet’rs’ Pet.”) [Dkt.#1]11 18.

C. The Arbitration

'f he Berl<owitz claimants, and five other individuals and entities whose properties
were the subjects of these expropriation proceedings, submitted their claims to the
lnternational Centre for Settlement of lnvestment Disputes (“the Tribunal”), an

international arbitration tribunal, alleging violations of Chapter Ten of CAFTA. See

 

' 'I`he 'l`ribuna| referred to the lots at issue by combining the first letter ofthe last name ofthe claimant and a
number. For clarity’s sal<e, 1 do the same. Interim Award 11 5 n.7.

2 ln 2013, Brett Berl<owitz gave Lots Bl and 138 to his sons, Trevor Berkowitz and Aaron Berkowitz. See ia'. at 11 5
Table l.

3 Brett 13erkowitz also purchased Lots 132 and 134 in September of 2003, but these lots were subsequently sold to
third parties and were not at issue in the Arbitration. See Notice of Arbitration 11 43 n.49. Similarly, Brett
Berl<owitz sold L,ot 137 to another private individual in 2004, and thus that lot also did not feature in the Arbitration.
See lnterim Awarcl 11 5 Table 1.

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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

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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

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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.

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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.

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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

9

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_

10

pursuant to Federal Rule ofCivil Procedure 55. See Mot. for Default J. 1Dkt. #21]. 1n
their motion, the Berl<owitz claimants argue that they effected service on January 25,
2017, by hand delivering a copy of their Petition to the address listed for notices under
CAFT/»\-DR, § 13, 11 10. Id. at 6. Because Costa Rica did not timely respond, petitioners
insist that defaultjudgment must be entered against Costa Rica. Ia’. at 7~8.

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.

11

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<owitz claimants allege that, even if service upon Sidley and
the Embassy was improper, they served Costa Rica on January 25, 2017 by delivering the
Petition to the l\/linistry ofForeign Trade pursuant to Annex G of Chapter 10 of CAFTA.
l\/lot. for Default J. 12~13. Annex G lists the designated recipients of service and their
addresses for the seven member states of CAFT/-\. See CAFTA-DR, Ch. 10, § 13, Annex
G. As to Costa Rica, Annex G identifies the 1\/1inistry of Foreign Trade as the designated
recipient of service. Id. And under Section 1608(a)(1) ofthe FSIA, a plaintiff may serve
a foreign state in federal court “by delivery of a copy of the summons and complaint in
accordance with any special arrangement for service between the 1Petitioner1 and the
foreign state.” 28 U.S.C. § l608(a)(1). The Berkowitz claimants accordingly argue that
Annex G of Chapter 10 of CAF TA constitutes a “special arrangement” under Section

1608, such that they properly effected service by delivering documents to the Ministry of

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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.”).

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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.,

14

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

333

complete determination of every issue submitted to him (quoting McKl`nney Restoral'ion

15

C()., 392 1"`.3d at 871)). rl`hus, 1 must assess whether the evidence demonstrates that the

464

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

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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

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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

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