Deutsche Rückversicherung AG v. Caja Nacional de Ahorro y Seguro en liquidación et al.

At a glance

Parties

Deutsche Rückversicherung AG v. Caja Nacional de Ahorro y Seguro (in liquidation), Instituto Nacional de Reaseguros and the Argentine State (Estado Nacional)

Case no.

CCF 6461/2009/CS1 (Corte Suprema de Justicia de la Nación); Causa No. 6.461/09 (Cámara Nacional de Apelaciones en lo Civil y Comercial Federal, Sala III)

Court

Corte Suprema de Justicia de la Nación (Argentina); earlier, Cámara Nacional de Apelaciones en lo Civil y Comercial Federal, Sala III

Underlying award(s)

Arbitral award of 26 April 2006 rendered in New York, confirmed by the US District Court for the Southern District of New York on 1 August 2007 and amended on 16 November 2007

Treaty

New York Convention 1958 (approved in Argentina by Law 23.619)

Court

Supreme Court: Carlos Fernando Rosenkrantz (President, separate vote), Juan Carlos Maqueda, Elena I. Highton de Nolasco, Horacio Rosatti (separate vote)

Sector

Reinsurance and retrocession

Outcome

The Supreme Court rejected the State's appeal and left in place recognition and enforcement of the award, adjusted to Argentina's state-debt consolidation regime.

Amount

Award: USD 7,390,044 in principal plus USD 8,642,622.50 in interest at 6% a year to 31 July 2007, with further interest until payment. Enforcement is subject to the consolidation regime (Laws 23.982 and 25.565), and the amount is to be set in the liquidation stage. Costs: the majority and Rosenkrantz ordered the appellant to pay; Rosatti would have had each side bear its own.

The dispute

Deutsche Rückversicherung AG, a German reinsurer, won an arbitral award in New York on 26 April 2006 for sums due under retrocession contracts concluded in 1975 and 1977. The award was against the Caja Nacional de Ahorro y Seguro (in liquidation), the Instituto Nacional de Reaseguros and the Argentine State. The US District Court for the Southern District of New York confirmed the award on 1 August 2007 and amended its judgment on 16 November 2007. Deutsche Rückversicherung then sought recognition and enforcement (exequatur) in Argentina. The Argentine State resisted on public-policy grounds. It argued that the award ordered cash payment at 6% interest, contrary to the state-debt consolidation regime (Laws 23.982 and 25.565; Article 17 of Law 24.624). It also argued that the tribunal had wrongly applied a five-year Dutch limitation period instead of the one-year period in Article 58 of Law 17.418, and had treated as interrupting the limitation period a 1992 letter sent by a person who lacked authority to represent the claimant. Finally, it argued that an exequatur judge cannot modify or partly enforce a foreign award.

Key holdings

1. Majority: the appeal was deserted. The State made no concrete, reasoned criticism of the Court of Appeals' central reasoning: Article III of the New York Convention bars conditions appreciably more onerous than those for domestic awards, and a domestic judgment that breaches the consolidation rules is adjusted to them rather than annulled. A foreign award can therefore be enforced in conformity with the consolidation regime. Majority, considerandos 7°–8°
2. Majority: the defences on powers of representation and on the limitation period had not been properly put to the Court of Appeals; a general reference back to the answer to the claim was not enough. The objection that interest could not be calculated also failed, because the State did not show that the due dates (before 1 April 1991) could not be determined. Majority, considerandos 6° and 9°
3. Rosenkrantz (separate vote): the defences had been maintained and had to be decided, but they fail on three grounds. Article 517 of the Code of Civil and Commercial Procedure (CPCCN) does not apply where the New York Convention governs. Applying Dutch rules on limitation and representation does not breach public policy, since under Argentine law limitation is not raised by the court of its own motion and can be waived. Re-examining issues already decided by the tribunal and the US court would mean reviewing the merits, which is not allowed. Rosenkrantz vote, considerandos 6°–10°
4. Rosenkrantz: Article VII(1) of the Convention lets the award creditor rely on more favourable local law. The claimant chose to seek enforcement adapted to the consolidation regime, and Article 518 CPCCN requires foreign judgments to be enforced like Argentine ones. Doing so does not modify the substance of the award. Having obtained the application of the consolidation regime, the State cannot oppose enforcement of the award as adapted to it. Rosenkrantz vote, considerandos 12°–16°
5. Rosatti (separate vote): exequatur does not permit re-weighing the facts decided abroad, and no breach of due process was shown. Direct enforcement of an award for cash plus 6% interest would breach Argentine public policy: it conflicts with emergency consolidation legislation that expressly covers arbitral awards, and it would breach equality among the State's creditors. But because the breach can be identified and separated from the rest, partial enforcement under the consolidation regime is possible, and costs should be borne by each side. Rosatti vote, considerandos 12°–15°
6. Court of Appeals (11 February 2010): the claimant must pay the court fee (tasa de justicia) under Law 23.898 on the exequatur, which has a determinable economic value and falls within no exemption. The fee paid now cannot be charged again in a later execution, and the claimant may recover it from the losing party. pp. 1–2

Procedural history

1. 24 November 2004Preliminary award holds that Dutch law governs limitation, at the request of the Argentine State.
2. 26 April 2006Final award rendered in New York, with a partial dissent by the arbitrator proposed by the Caja.
3. 1 August 2007The US District Court for the Southern District of New York confirms the award; its judgment is amended on 16 November 2007.
4. 11 February 2010Court of Appeals, Sala III, confirms the order requiring the claimant to pay the court fee in the exequatur proceeding.
5. The Juzgado Nacional de Primera Instancia en lo Civil y Comercial Federal No. 2 finds the formal requirements met but denies enforcement on public-policy grounds.
6. 9 October 2014The State is notified of the Court of Appeals, Sala III, judgment, which reversed the first-instance decision and granted recognition and enforcement subject to the consolidation regime.
7. 24 September 2019The Supreme Court rejects the State's ordinary appeal; Rosenkrantz and Rosatti write separate concurring votes.

Tribunal, counsel and experts

Decided by

• Carlos Fernando Rosenkrantz Judge, Corte Suprema de Justicia de la Nación (President; separate concurring vote)
• Juan Carlos Maqueda Judge, Corte Suprema de Justicia de la Nación
• Elena I. Highton de Nolasco Judge, Corte Suprema de Justicia de la Nación
• Horacio Rosatti Judge, Corte Suprema de Justicia de la Nación (separate concurring vote; would have had each side bear its own costs)
• Ricardo Gustavo Recondo Judge, Cámara Nacional de Apelaciones en lo Civil y Comercial Federal, Sala III
• Guillermo Alberto Antelo Judge, Cámara Nacional de Apelaciones en lo Civil y Comercial Federal, Sala III

For the claimant

Lautaro Damián Ferro · Cristian A. Krüger · Jimena Vega Olmos · Juan Cruz Azzarri

For the respondent

Estado Nacional – Ministerio de Economía y Finanzas

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Keywords

• New York Convention
• recognition and enforcement
• exequatur
• public policy
• Article V(2)(b)
• Article VII(1) more-favourable-right provision
• Article III
• partial enforcement
• debt consolidation regime
• Law 23.982
• reinsurance
• retrocession
• limitation period
• Dutch law
• Argentina
• court fee
• state immunity from cash payment
• no review of the merits

Summary generated with AI from the published documents — refer to the award for the authoritative text.