LBKM Secures Dismissal of Seven-Figure Arbitration Enforcement Petition
On October 9, 2026, the United States District Court for the Southern District of New York dismissed a petition that sought to enforce an arbitration award exceeding USD 27 million against the Comisión Federal de Electricidad (“CFE”), Mexico’s state-owned power utility. Lewis Baach Kaufmann Middlemiss PLLC successfully obtained the dismissal on mootness grounds through a single pre-motion conference and without the time or expense of full motion practice and litigation, thus protecting any CFE assets in the U.S. from seizure.
CFE had signed a contract with Proyecto CCC Empalme I, S.A.P.I. de C.V. (“Empalme”) to construct a power plant in Mexico. A dispute arose as to whether Empalme had constructed the plant according to agreed specifications, and whether CFE was entitled to execute on a performance guarantee in the form of a letter of credit with a Mexican bank.
Empalme filed for arbitration before the London Court of International Arbitration. The arbitral tribunal issued an award in Empalme’s favor on March 14, 2023, requiring CFE to pay Empalme over USD 27 million. Empalme sought to enforce the award in the United States District Court for the Southern District of New York beginning in 2024. By seeking to convert the award into a U.S. judgment to enforce it here, Empalme presumably hoped to freeze and seize any CFE assets in the U.S., since Mexican law prohibits seizure of its assets in Mexico. LBKM represented CFE in these enforcement proceedings.
Pursuant to its obligations under Mexican law, after obtaining all internal approvals CFE paid Empalme the amounts stated in the award in May 2026, during the enforcement action. However, Empalme sought millions of dollars in additional amounts, including Mexican value-added-taxes (“VAT”) and interest, neither of which was specified in the award. While the award would have included interest, the interest rate stipulated in the parties’ contract utilized LIBOR as the benchmark, and because LIBOR had been discontinued, the calculation of interest would require further litigation to determine a new interest rate. Because VAT and interest were not included in the award, LBKM sought to argue to the Court that the award had been fully satisfied by CFE’s payment of the facial amount of the award, and thus Empalme’s petition was moot.
LBKM requested a pre-motion conference, explaining to the Court that CFE intended to move to dismiss Empalme’s petition on mootness grounds. Following the pre-motion conference the Court agreed that CFE’s payment of the principal award amount rendered the dispute moot. The award did not mention VAT or entitle Empalme to payment of VAT. And the discontinuation of the contractual interest rate made the interest portion of the award too ambiguous to enforce. The Court wrote, “Indeed, an award is too ambiguous to confirm where it ‘failed to deal explicitly with the contingency which arose,’” citing Trustees of NY State Nurses Ass’n Pension Plan v. White Oak Global Advisors, LLC, 102 F.4th 572, 607 & n.19 (2d Cir. 2024). “In this case, the contingency is the disappearance of the contractual interest rate.”
The Court therefore dismissed Empalme’s enforcement petition as moot. By resolving the matter at the pre-motion stage, LBKM secured this favorable outcome for CFE quickly and economically, sparing the client the cost and delay of further briefing and formal motion practice. The result protects any CFE assets in the U.S. from freezing or seizure and brings the U.S. enforcement proceedings to a close.
LBKM had also opposed the petition on jurisdictional and venue grounds, which raised matters of first impression following the U.S. Supreme Court’s decision in Fuld v. Palestine Liberation Org., 606 U.S. 1 (2025). The dismissal of the petition on the ground of mootness meant that the Court did not need to decide those issues.