Devas Multimedia Private Ltd. v. Antrix Corp. Ltd., No. C18-1360-TSZ (W.D. Wash. Apr. 16, 2019)
Devas Mutlimedia Private Ltd. (“Devas”) brought an action to confirm a foreign arbitral award issued against Antrix Corp. Ltd. (“Antrix”), an entity owned and controlled by the Government of India. Antrix moved to dismiss Devas’s petition on the grounds that Antrix was not subject to the court’s jurisdiction and based on the doctrine of forum non conveniens.
In its evaluation of the motion to dismiss for lack of jurisdiction, the court explained that the parties did not dispute that personal jurisdiction existed as a matter of statute under the Foreign Sovereign Immunities Act (the “FSIA“). However, Antrix argued that it was entitled to additional, constitutional due process protections requiring a minimum contacts analysis. The court disagreed. Although U.S. Supreme Court and Ninth Circuit cases had assumed in dicta that foreign states were “persons” entitled to due process, the court found persuasive decisions from the Second, Fifth and D.C. circuits that had held that when the state exercises sufficient control over a foreign corporation, the due process clause does not apply and statutory personal jurisdiction under the FSIA is all that is required. Therefore, the court had jurisdiction over Antrix.
As to its forum non conveniens analysis, the court denied Antrix’s motion to dismiss in favor of the courts of India. Because “only a court of the United States . . . may attach the commercial property of a foreign nation located in the United States,” Devas had no adequate alternative forum in which to execute on property Antrix may own in the United States. In addition, the court cited active investigations and proceedings against Devas and its officers and agents in India—including both civil and criminal proceedings—which raised additional concerns about the neutrality of proceedings in India.
Although declining to grant the relief sought in Antrix’s motion to dismiss, the court exercised its discretion pursuant to Article VI of the New York Convention to temporarily stay the action pending resolution of Antrix’s challenge to the arbitral award in India’s courts. Article VI provides, in pertinent part, that “the authority before which the award is sought to be relied upon may, if it considers it proper, adjourn the decision on the enforcement of the award and may also, on the application of the party claiming enforcement of the award, order the other party to give suitable security.” The court invited the parties to submit further briefing on whether, and at what amount, the court should require security to be posted as a condition of the stay.
A version of this post originally appeared in the July 2019 edition of Baker McKenzie’s International Litigation & Arbitration Newsletter, which is edited by David Zaslowsky and Grant Hanessian.