Preble-Rish Haiti v. Bureau de Monetisation de Programmes d’Aide au Developpement (Haiti)

Case summary

At a glance

Parties: Preble-Rish Haiti, S.A. (PRH) v. Republic of Haiti and Bureau de Monétisation des Programmes d'Aide au Développement (BMPAD)
Case no.: 21-cv-6704 (PKC) (S.D.N.Y.)
Forum and rules: Ad hoc arbitration seated in New York under Article 20 of three fuel supply contracts; enforcement under the New York Convention and Chapter Two of the Federal Arbitration Act
Court: United States District Court for the Southern District of New York (P. Kevin Castel, U.S.D.J.)
Underlying award(s): Partial Final Award of 6 August 2021 (panel: Robert G. Shaw, LeRoy Lambert, Louis Epstein)
Sector: Fuel supply
Outcome: Petition to recognize, confirm and enforce the Partial Final Award granted against BMPAD (26 January 2022).
Amount: Pre-award security: BMPAD ordered to deposit USD 23,043,429.79 into escrow. PRH claims about USD 27.2 million for unpaid fuel invoices, including lost profits.

The dispute

On 13 May 2020, PRH, a Haitian company, and BMPAD, a Haitian government agency, signed three contracts under which PRH would source, ship and deliver fuel to BMPAD over six monthly shipments. BMPAD fell behind on paying for the fifth order. It took possession of the fuel but never paid. PRH stopped shipments and claimed about USD 27.2 million. PRH started an arbitration in New York under the contracts. BMPAD refused to take part. The panel issued a Partial Final Award ordering BMPAD to pay pre-award security into escrow, and PRH petitioned the court to confirm it. BMPAD argued that the New York Convention did not apply and raised four defences: the arbitration agreement was illegal under Haitian law, it had been denied due process and proper notice, the panel was improperly composed and biased, and enforcement would be contrary to public policy.

Key holdings

The New York Convention applies. The award is not considered domestic because both parties are domiciled in Haiti, a Convention State. The arbitration was seated in New York and arose from a commercial relationship. The court therefore has subject-matter jurisdiction under 9 U.S.C. § 203. p. 7
BMPAD's argument that the arbitration clause is illegal under Haitian law is barred by res judicata. On 27 September 2021, Justice Borrok of the New York Supreme Court denied BMPAD's petition to stay the arbitration and held that the clauses were not illegal under Haitian law. That ruling is a final judgment, and a pending appeal does not remove its preclusive effect. pp. 9–10
BMPAD received proper notice. PRH had sent notice of its intent to arbitrate in French and English on 4 November 2020, and BMPAD stamped it received. The state court ruling also precludes BMPAD's argument that service had to be made by letters rogatory. pp. 11–12
BMPAD was not prevented from presenting its case. The panel adjourned the hearing when BMPAD's director fell ill with COVID-19. Its refusal of a further 60-day adjournment after the assassination of the Haitian president did not deprive BMPAD of a hearing. BMPAD was invited to attend and chose not to. pp. 12–14
The panel was composed in accordance with the parties' agreement. PRH appointed the second arbitrator under the default rule after BMPAD failed to appoint one within 10 days. The arbitrators' past ties to Blank Rome and their membership of the Society of Maritime Arbitrators do not show evident partiality. pp. 14–16
The public policy exception in Article V(2)(b) is construed very narrowly. Enforcing the award does not violate basic notions of morality and justice. p. 16

Procedural history

13 May 2020PRH and BMPAD sign three fuel supply contracts, each with an arbitration clause providing for arbitration in New York.
20 November 2020PRH serves its notice of arbitration and appoints Robert G. Shaw. BMPAD does not appoint an arbitrator, so PRH appoints LeRoy Lambert. Louis Epstein is appointed third arbitrator on 1 December 2020.
22 December 2020BMPAD petitions the New York Supreme Court to stay the arbitration.
28 July 2021Remote hearing on security takes place. BMPAD does not attend.
6 August 2021Partial Final Award orders BMPAD to deposit USD 23,043,429.79 in escrow.
27 September 2021Justice Borrok denies the petition to stay the arbitration. BMPAD appeals. On 7 December 2021 the Appellate Division vacates an interim stay of his order.
26 January 2022The S.D.N.Y. grants the petition to recognize, confirm and enforce the Partial Final Award.
2 August 2022US Court Order on Application for Writ of Garnishment (text not included among the documents provided).