Case of the Day: Getma v. Guinea
Posted on July 10, 2017
Getma had a contract to develop Guinea’s main port in the capital city, Conakry. The agreement called for arbitration of disputes under the CCJA arbitration rules. When a dispute arose, Getma demanded arbitration. The tribunal ultimately awarded Getma significant damages.
During the proceedings, the CCJA had ordered the parties to pay certain arbitration costs in advance. The tribunal asked the CCJA, which was administering the arbitration, to increase the arbitrators’ fees. The CCJA seemed to encourage or at least countenance this request, and the parties indicated they had no objection. But later, the CCJA rejected the tribunal’s effort to increase the fees, citing its prior precedents. Nevertheless, the tribunal’s award included a demand for € 450,000 in arbitrators’ fees, contrary to the CCJA’s decision. “And somehow, the tribunal eventually collected half of the increased arbitrators’ fees from Getma,” the prevailing party.
Guinea sought to annul the award in proceedings before the CCJA, and the CCJA granted its petition on the grounds that the tribunal had violated the CCJA rules by increasing its fees, which only the CCJA had the authority to do. Getma sought confirmation of the now-annulled award in Washington.
Unsurprisingly, the District Court refused to confirm the award, and now the DC Circuit has affirmed. When the court with jurisdiction annuls an award, can another court confirm it nevertheless? Yes, but only in very exceptional circumstances: according to DC Circuit precedent, the annulment has to be repugnant to the United States’s most fundamental notions of morality and justice. Here, the points Getma was able to make didn’t rise to that level. Getma noted, for example, that a Guinean government minister had said that a Guinean judge on the CCJA had had ex parte communications with the government, but the minister later recanted, and the court affirmed the District Court’s decision to credit the minister’s recantation. There was no clear indication in the parties’ contract that they had any agreement on how the arbitrators were to be compensated, and even if there were, a violation of the agreement would not really be repugnant to fundamental notions. The court also easily rejected the argument that the CCJA had misapplied its own rules—the argument was half-hearted anyway, as Getma apparently recognized that an error of law or even manifest disregard of law would not, on its own, be enough to constitute a violation of public policy.