“Please!” “Enough is enough!” D.C. Federal Court Emphatically Confirms Arbitration Award in Favor of Deutsche Telekom
LBKM's Alexander Bedrosyan represented Deutsche Telekom in confirmation proceedings
On March 27, 2024, the U.S. District Court for the District of Columbia (“D.C. Court”) confirmed an arbitration award issued in favor of Deutsche Telekom AG, Germany’s largest telecommunications company, against India for $93.3 million plus interest. The court simultaneously rejected India’s attempts to dismiss or otherwise lengthen the confirmation proceeding.
In forceful language, the decision written by Judge Richard J. Leon puts award debtors—particularly sovereign award debtors—on notice of tactics that will not be countenanced in post-arbitration proceedings in the United States, in light of the strong U.S. federal policy in favor of arbitration.
In the underlying dispute, Deutsche Telekom owned shares in an Indian company that had the contractual right to lease electromagnetic spectrum from an Indian state-owned satellite company and supply broadband wireless and audiovisual services throughout the country. In February 2011, however, India in its sovereign capacity terminated this lease agreement. Deutsche Telekom began arbitration against India in Switzerland under the Germany-India bilateral investment treaty (“Investment Treaty”). The tribunal ruled that India’s actions violated the treaty and ordered it to pay damages. India twice attempted to challenge the tribunal’s findings before the Swiss Federal Supreme Court, but its challenges failed.
Deutsche Telekom began proceedings in the D.C. Court to confirm the arbitration award under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”). India moved to dismiss the confirmation proceedings, arguing that it had sovereign immunity from the court’s jurisdiction because the scope of the Treaty’s arbitration clause allegedly did not cover Deutsche Telekom or its investment. Furthermore, India reserved its purported right to make defenses to enforcement under the New York Convention at a second stage of the proceedings.
The D.C. Court rejected these arguments and agreed with Deutsche Telekom in all respects. First, India’s arguments on the scope of the arbitration clause were not jurisdictional arguments bearing on its sovereign immunity, but rather defenses to the merits of enforcement under the New York Convention. Second, per the parties’ agreement, these arguments had already been heard and rejected by the arbitral tribunal, and U.S. law required the D.C. Court to accept the tribunal’s determination.
As for India’s request to defer its New York Convention defenses to a second stage of the proceedings, Judge Leon stated, “Please!” India could and should have briefed its defenses together with its purported immunity arguments, particularly since the purported immunity arguments were not “colorable.” Furthermore, India had already made these same arguments before the arbitral tribunal and Swiss Federal Supreme Court. “Enough is enough!” Judge Leon concluded.
Therefore, the D.C. Court not only rejected India’s motion to dismiss the confirmation proceeding, but went a step further and accepted Deutsche Telekom’s petition to confirm the award.
Alexander Bedrosyan represented Deutsche Telekom in the confirmation through the completion of substantive briefing, before joining Lewis Baach Kaufmann Middlemiss PLLC in May 2023. The brief co-drafted by Mr. Bedrosyan, as well as Judge Leon’s decision, can be read below.