Etrak Insaat Taahhut Ve Ticaret Anonim Sirketi v. State of Libya

At a glance

Parties

Etrak İnşaat Taahhüt Ve Ticaret Anonim Şirketi (Turkey) v. State of Libya

Case no.

Civil Action No. 22-cv-864 (JMC)

Court

United States District Court for the District of Columbia (Judge Jia M. Cobb)

Forum and rules

Petition to confirm a foreign arbitral award under the New York Convention and the Federal Arbitration Act, 9 U.S.C. §§ 201–208. Underlying arbitration seated in Geneva, Switzerland, with costs fixed by the ICC Court.

Underlying award(s)

Arbitral award of July 2019 in Etrak's favour; Libya's set-aside application was rejected by the Swiss Federal Court in November 2020

Treaty

Libya–Turkey BIT

Sector

Construction; public works

Outcome

Libya's motion to stay was denied and Etrak's petition to confirm the award was granted (4 February 2025).

Amount

Award confirmed: USD 21,865,554, including pre-award simple interest at 4% per annum, plus post-award interest at LIBOR + 3% per annum compounded annually. Arbitration costs were fixed by the ICC Court at USD 542,600, with Libya to pay Etrak USD 478,850. Etrak also sought post-judgment interest under 28 U.S.C. § 1961 and the costs of the court proceeding.

The dispute

Etrak, a Turkish company, carried out public construction projects for Libya from the 1980s and was not paid. In October 2012 a Libyan court in Beida ordered Libya to pay it LYD 1,906,360.23 plus interest and LYD 1,000,000 in damages. In December 2013 the parties settled for LYD 5,420,308.707, but Libya did not pay and later argued that the official who signed the settlement lacked authority. Etrak brought arbitration under the Libya–Turkey BIT. The tribunal found that Libya had denied fair and equitable treatment and awarded damages. In this court, Etrak sought confirmation of the award. Libya asked for a stay pending confirmation proceedings in Turkey and Curaçao. It also argued that confirmation would breach U.S. public policy on res judicata, because a May 2019 Tripoli judgment had declared the settlement agreement invalid.

Key holdings

1. The Court has subject-matter jurisdiction under the FSIA arbitration exception, 28 U.S.C. § 1605(a)(6). The BIT's arbitration clause is an agreement 'for the benefit of' Turkish investors. The award is 'commercial' and so falls under the New York Convention, because the BIT is designed to promote commerce. Libya waived any objection to personal jurisdiction. pp. 5–7
2. No stay under Article VI of the New York Convention. A stay is possible only while a set-aside or suspension application is pending at the seat (Switzerland), and Libya's Swiss set-aside action had already failed. Parallel confirmation proceedings in Turkey and Curaçao have no effect on the award's validity and no preclusive effect on the Court. pp. 8–9
3. The Europcar factors apply only to proceedings in the originating forum. Even if they applied, they would not justify a stay: a stay would only prolong the litigation, and the foreign proceedings have no expected end date. Libya's reply-brief reading of Article VI was also rejected, as was any basis for a discretionary stay under Landis. Under Libya's reading, a party that had ever started a set-aside action could seek a stay even after losing it. pp. 9–11 and n. 3
4. The public policy defence (Article V(2)(b)) fails. The Tripoli case decided only whether the settlement agreement was valid under Libyan law. The tribunal decided the broader question of BIT breach, which included breach of legitimate expectations and arbitrary conduct, issues the Tripoli court did not reach. The Swiss court had already rejected the same res judicata argument under Swiss law, and holding Libya to its choice of Geneva as the seat does not offend basic notions of morality and justice. pp. 11–14
5. The German court's refusal to recognise the award, on the ground that the settlement agreement was not an 'investment', has no preclusive effect on this Court. p. 14 n. 4
6. The award is confirmed. Etrak was directed to file a proposed order of judgment by 18 February 2025 stating the exact amount, including interest. Libya could respond by 25 February 2025 and Etrak could reply by 4 March 2025. pp. 14–15

Procedural history

1. October 2012The Court of First Instance in Beida orders Libya to pay Etrak LYD 1,906,360.23 plus interest and LYD 1,000,000 in damages.
2. December 2013Settlement agreement: Libya is to pay LYD 5,420,308.707. Libya does not pay.
3. August 2016Etrak files its request for arbitration under the Libya–Turkey BIT; the seat is Geneva.
4. January–March 2018A Libyan appellate court overturns the 2012 judgment. Libya then sues in Tripoli to have the settlement agreement declared invalid.
5. May 2019The Tripoli court declares the settlement agreement invalid. Neither the tribunal nor counsel learn of this before the award.
6. July 2019The arbitral award finds a breach of fair and equitable treatment and awards Etrak USD 21,865,554 plus interest and costs.
7. November 2020The Swiss Federal Court rejects Libya's application, filed in September 2019, to set aside the award.
8. March 2023The Paris Court of Appeals affirms the French decision declaring the award enforceable in France. German courts had refused recognition.
9. 4 February 2025The D.C. District Court denies Libya's motion to stay and grants Etrak's petition to confirm the award.

Tribunal, counsel and experts

Decided by

• Jia M. Cobb Judge, United States District Court for the District of Columbia

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Keywords

• confirmation of arbitral award
• New York Convention
• Article V(2)(b) public policy
• Article VI stay
• res judicata
• FSIA arbitration exception
• Europcar factors
• set-aside
• enforcement
• Libya–Turkey BIT
• fair and equitable treatment
• settlement agreement
• construction
• parallel proceedings
• Swiss Federal Court
• ICC
• Geneva seat

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