Marseille-Kliniken AG v. Equatorial Guinea (II)

Case summary

At a glance

Parties: Marseille-Kliniken AG (Switzerland) v. the Republic of Equatorial Guinea
Case no.: SCAI Case No. 600413-2015 (arbitration); D.C. Cir. No. 23-7169 (appeal from D.D.C. No. 1:20-cv-03572)
Forum and rules: Arbitration before the Chamber of Commerce in Zürich, Switzerland; confirmation proceedings in U.S. federal courts under the FSIA, the Federal Arbitration Act and the New York Convention
Treaty: Dispute-resolution clause of a 2009 contract; New York Convention for enforcement
Court: United States Court of Appeals for the District of Columbia Circuit: Circuit Judge Katsas (author), Senior Circuit Judges Ginsburg and Randolph
Underlying award(s): Award in the second Swiss arbitration (date not stated in the published document), which rejected Equatorial Guinea's jurisdictional objection and awarded damages to Marseille-Kliniken
Sector: Healthcare; hospital modernisation and management
Outcome: The D.C. Circuit upheld subject-matter jurisdiction under the FSIA arbitration exception. It vacated the district court's confirmation of the award because that court had wrongly deferred to the arbitrators on the local-remedies clause, and it remanded.
Amount: The arbitral award granted over USD 9 million in damages.

The dispute

In 2009 the Swiss healthcare provider Marseille-Kliniken AG contracted with Equatorial Guinea to modernise and then run a medical clinic in that country. After the company had spent money and time modernising the clinic, Equatorial Guinea refused to let it run the clinic. A first Swiss arbitration ended in an award of damages that the parties later settled. In a second Swiss arbitration for other damages, Equatorial Guinea argued that the bilingual (Spanish/German) dispute-resolution clause required the company to exhaust remedies in the Equatoguinean courts first. The arbitrators found the clause ambiguous, rejected the objection and awarded over USD 9 million. The U.S. district court confirmed the award, and Equatorial Guinea appealed on FSIA jurisdiction and on the court's deference to the arbitrators.

Key holdings

The FSIA arbitration exception applies. Marseille-Kliniken produced the arbitration agreement, the Swiss award and a potentially applicable treaty (the New York Convention). Equatorial Guinea's exhaustion argument goes to the scope of the arbitration agreement, not its existence, so it does not defeat subject-matter jurisdiction. pp. 6–8
The argument that the clause is invalid because Equatoguinean or Swiss law bars first-instance arbitration is a merits defence under Article V.1(a) of the New York Convention. It is not a jurisdictional defence under the FSIA. p. 8
BG Group v. Argentina does not require deference. Unlike the treaty in BG Group, this clause sits in a contract governed by domestic law. A local-court decision on the contract claims would preclude their arbitration and leave only denial-of-justice claims. The clause therefore bears on what claims may be arbitrated, which is a question of substantive arbitrability and presumptively for courts. pp. 11–12
Unlike in BG Group, no futility exception to exhaustion would colorably apply. Marseille-Kliniken does not contend that Equatorial Guinea impeded its access to the domestic courts. pp. 12–13
The parties did not clearly and unmistakably delegate arbitrability to the arbitrators. Naming the Zurich Chamber of Commerce did not bind the parties to the Swiss Chambers' Arbitration Rules, which the arbitrators fixed only by a procedural order in December 2015. Equatorial Guinea did not forfeit the point: its repeated objection to the panel's jurisdiction subsumed it. pp. 13–15
The court declined to interpret the clause itself. Open questions include the governing law (Equatoguinean, Swiss or U.S.), the interpretive principles and extrinsic evidence to apply, and whether Equatorial Guinea's Foreign Investment Law applies. The judgment was vacated and the case remanded to the district court. pp. 15–16

Procedural history

2009Marseille-Kliniken and Equatorial Guinea contract for the modernisation and operation of a medical clinic.
Not statedFirst Swiss arbitration: the arbitrators rule for Marseille-Kliniken and award damages. The parties later settle that part of the dispute.
December 2015In the second Swiss arbitration, a procedural order fixes the governing procedural rules.
Not statedAward in the second arbitration: the jurisdictional objection is rejected and over USD 9 million in damages is awarded.
17 November 2023The U.S. District Court for the District of Columbia (No. 1:20-cv-03572) upholds FSIA jurisdiction, defers to the arbitrators under BG Group and confirms the award.
25 October 2024Appeal argued before the D.C. Circuit.
23 September 2025D.C. Circuit judgment: jurisdiction affirmed; confirmation vacated; case remanded.