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Case of the Day: CONPROCA v. Petróleos Mexicanos

The case of the day is CONPROCA S.A. de C.V. v. Petróleos Mexicanos (S.D.N.Y. 2013). CONPROCA was a joint venture organized under the law of Mexico. It sought confirmation of a $311 million arbitral award it had obtained against PEMEX, the Mexican state oil company. The place of the arbitration was Mexico. PEMEX had unsuccessfully brought proceedings in Mexico to have the award set aside. PEMEX then brought an amparo proceeding seeking to revive its attack on the award. The Fourth Collegiate Court granted the amparo petition, reinstated the proceeding to vacate the award, and entered an injunction enjoining CONPROCA from seeking recognition and enforcement of the award in Mexico or abroad.

CONPROCA sought confirmation of the award in New York, and PEMEX moved to dismiss on forum non conveniens grounds or to stay pending the Mexican court’s decision. The Panama Convention governed.

The court granted the motion to stay. It reasoned that it was better to avoid the risk of an improvident decision to enforce the award and because the Mexican courts were better positioned to determine the validity of the award under the applicable law, namely Mexican law. The court deferred any consideration of forum non conveniens, though as I have argued before, application of doctrines such as personal jurisdiction or forum non conveniens at the enforcement stage is problematic, since the merits have already been decided and the only practical question is whether the prevailing party can look to the assets of the other party in the forum where recognition is sought.