Case of the Day: Grupo Unidos Por El Canal v. Autoridad del Canal de Panama

The case of the day is Grupo Unidos Por El Canal S.A. v. Autoridad del Canal de Panama (S.D. Fla. 2018). As you may have guessed, it’s a case about a construction project at the Panama Canal. The parties engaged in an ICC arbitration in Miami, which resulted in an award of damages of $22 million in favor of ACP. Grupo Unidos brought a petition to vacate the award, and ACP sought confirmation. ACP, an instrumentality of Panama, argued that the motion to vacate was barred because it was untimely under 9 U.S.C. § 12 and in light of ACP’s FSIA immunity.

The parties’ contract provided:

All written notifications and communications arising in the course of this arbitration shall be deemed to have been validly made to each Party where they have been transmitted to [ACP’s arbitration counsel].

All written communications of less than twenty pages shall be sent by email (eventually confirmed by fax or courier service) and all written communications of twenty or more pages, including formal submissions and all attachments, shall be sent by email and hand delivery/courier service.

Grupo Unidos served the petition in accordance with this provision and claimed that it had complied with 28 U.S.C. § 1608(b)(1)—service by “delivery of a copy of the summons and complaint in accordance with any special arrangement for service between the plaintiff and the agency or instrumentality.”

The judge held, apparently correctly, that this language was insufficient to be a “special arrangement,” because it covers only documents in the course of the arbitration. But Grupo Unidos argued that in light of 9 U.S.C. § 12, which requires that a petition to vacate be served within three months of the award, a special arrangement is the only practicable way to make service. Service via the Inter-American Convention likely couldn’t be completed in the available time.

The judge disagreed. Section 1608(b) allows the use of service by mail “if service cannot be made under paragraphs (1) or (2),” i.e., if there is no special arrangement for service and service cannot be made under the Convention. This is plausible. I think it’s worth noting the decision because I’m not sure of another case in which a court has held that the inability to effect service within a particular period of time under a convention is sufficient to show that service cannot be made under that convention. The issue doesn’t arise very often because under FRCP 4(m), there is no strict deadline for effecting service under a convention, as long as you take the appropriate steps under the application convention with reasonable diligence. I considered a similar problem in a 2011 post, but the decision there didn’t reach a holding on the issue.

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