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Compañía de Inversiones Mercantiles S.A. v. Grupo Cementos de Chihuahua, S.A.B. de C.V., No. 1:15-cv-02120-JLK (D. Colo. Apr. 30, 2021) [click for opinion]

In 2005, Compañía de Inversiones Mercantiles S.A. (“CIMSA”), Grupo Cementos de Chihuahua, S.A.B. de C.V. (“GCC S.A.B.”) and GCC Latinoamérica, S.A. de C.V. (“GCC Latinoamérica,” and collectively “GCC”) executed a shareholder’s agreement under which they each obtained a right of first refusal of shares in a mutually held Bolivian cement company. In late 2009, GCC communicated its intention to sell its shares in the cement company. After lengthy negotiations regarding CIMSA’s purchase of GCC’s shares, GCC claimed that CIMSA’s attempts to exercise its right of first refusal were invalid, and sold its shares to a Peruvian company instead.

In 2011, CIMSA initiated arbitration against GCC. The arbitration was conducted pursuant to the Inter-American Commercial Arbitration Commission (“IACAC”) Rules, applying Bolivian law, before a three-person tribunal. The Tribunal issued a Merits Award in 2013, and an approximately $36 million Damages Award in 2015, both in favor of CIMSA.

Although the relevant agreement expressly waived any appeal of the arbitration award, GCC nonetheless applied to the Bolivian courts to annul the award through a series of overlapping court proceedings, including a number of amparos. The Merits Award was ultimately upheld by the Plurinational Constitutional Tribunal (“PCT”), Bolivia’s highest constitutional court. The Damages Award was initially annulled, but that decision was then overturned by the PCT, which remanded the case for further proceedings. For several years, through court delays and various delay tactics, a final decision on the Damages Award languished at the trial court level.

Meanwhile, CIMSA petitioned the U.S. District Court for the District of Colorado to confirm the foreign arbitral awards. On March 26, 2019, the district court entered a judgment confirming both awards, which the Tenth Circuit Court of Appeals affirmed on August 17, 2020.

After the district court’s decision, during a period of political turmoil that resulted in new elections in Bolivia—in which CIMSA’s principal served as the vice-presidential running mate for the losing party—GCC brought new challenges in the Bolivian courts. Shortly after those elections, the Bolivian courts suddenly changed course, reversed several of their prior decisions, and ultimately reinstated the October 2015 decision to annul the Damages Award.

Arguing that the Bolivian courts’ 2020 orders meant there was no longer any arbitral award to enforce and no basis for a judgment enforcing such an award, GCC asked the district court to vacate its judgment. The court declined to do so. The court explained that there is a pro-enforcement bias to the New York Convention. Although a court may refuse to enforce an award if it has been set aside in the primary jurisdiction—the country in which, or under the law of which, that award was made—courts have applied a narrow public policy exception when enforcement of an arbitral award is necessary to “vindicate fundamental notions of what is decent and just in the United States.”

CIMSA asserted that the unfavorable 2020 decisions did not merit comity because they were the product of corruption in the judiciary and bias against CIMSA’s principal, and were issued in flagrant violation of Bolivian constitutional law. While the court did not find the 2020 orders themselves to be “repugnant to fundamental notions of what is decent and just” in the United States, the court determined that applying the 2020 orders to vacate the awards “would rise to that unacceptable level.”

The court specifically found that allowing these proceedings to continue without end would be “repugnant.” When the court issued its original decision enforcing the awards, the Bolivian PCT had also appeared to have reached a final decision in favor of enforcement. Despite this, GCC continued to prolong proceedings as much as possible, and, while the PCT may have reversed its prior decision, there was no guarantee the Bolivian courts would not change course again. The court noted that “[p]ublic policy dictates that there be an end to litigation.” The court further emphasized that this value was expressed in the parties’ agreement, where the parties specifically waived any appeals to the award, and the IACAC Rules provided that there would be no appeals. Therefore, five years after the Damages Award was issued, the court held that “the interests in finality overshadow those of comity.”

The court explained that its decision to uphold its earlier order was “reinforced by GCC’s inequitable conduct throughout this litigation.” First, GCC waited until its efforts to defend against enforcement in the U.S. were unsuccessful to then bring new challenges in Bolivia, thereby sleeping on its rights. Second, GCC unreasonably frustrated service while also participating in the litigation, and refused to carry out the award without delay. Finally, GCC repeatedly asked for stays while also refusing to post bond, even though the company did hundreds of millions of dollars of business in the U.S.

For these reasons, the court denied GCC’s motion to vacate the court’s previous order confirming the arbitral awards.


Jacob M. Kaplan is a partner in Baker McKenzie, New York. He focuses on international litigation and arbitration, and has participated in several high-profile contract and financial services cases. Jacob serves as counsel in disputes concerning contract, energy, investment, construction, commodities, financial services, insurance, and intellectual property, among other matters. He has appeared in state and federal courts as well as a variety of institutional and ad hoc arbitral forums. Jacob can be reached at and + 1 212 891 3896.