Sigma Constructores, S.A. v. Republic of Guatemala

At a glance

Parties

Sigma Constructores, S.A. (Guatemala) v. Republic of Guatemala

Case no.

U.S. District Court for the District of Columbia, Civil Action No. 24-3055 (SLS). Related action: No. 22-cv-1674-TSC-MAU

Court

United States District Court for the District of Columbia

Forum and rules

Petition to confirm foreign arbitral awards under the Federal Arbitration Act, implementing the New York Convention and the Panama Convention

Treaty

New York Convention; Inter-American Convention on International Commercial Arbitration (Panama Convention)

Underlying award(s)

No. 24-3055: arbitral award rendered in Guatemala on 27 October 2021 on the early termination of a 2014 highway construction contract. No. 22-cv-1674: three awards, Arbitration and Conciliation Center of the Guatemalan Chamber of Commerce Case No. 13-2018 (20 September 2019) and Case No. 10-2019, and Cenac Foundation Case No. 11-2019 (2 February 2021)

Court

Judge Sparkle L. Sooknanan (No. 24-3055); Magistrate Judge Moxila A. Upadhyaya and Judge Tanya S. Chutkan (No. 22-cv-1674)

Sector

Construction; public highways

Outcome

In both actions the Court denied Guatemala's motion to dismiss (FSIA immunity, forum non conveniens, comity) and denied a stay without prejudice. The confirmation proceedings continue.

Amount

No. 24-3055: the award granted over $37 million in damages plus post-judgment interest. Guatemala had offered about $4.6 million on termination.

The dispute

Sigma Constructores, S.A., a Guatemalan construction and engineering company, contracted with Guatemala on 7 November 2014 to build about 100 kilometres of public highways. The contract provided for binding arbitration under Guatemalan law, with an award "not subject to any challenge". Guatemala terminated the contract unilaterally in November 2017 and offered about $4.6 million in compensation. A tribunal sitting in Guatemala awarded Sigma over $37 million on 27 October 2021. Guatemala challenged the award in Guatemala by a Recurso de Revisión and Amparo actions, relying on a criminal investigation into alleged bribery by Sigma. Sigma then sought confirmation of the award in Washington, D.C.; Guatemala argued that it was immune under the FSIA, that the case should be dismissed for forum non conveniens, and in the alternative that the case should be stayed. In a separate, earlier action (No. 22-cv-1674), Sigma sought confirmation of three other Guatemalan awards under three construction contracts, and Guatemala raised similar defences.

Key holdings

1. The FSIA arbitration exception (28 U.S.C. § 1605(a)(6)) gives the Court subject-matter and personal jurisdiction. Because the New York and Panama Conventions, as implemented in the FAA, are part of the laws of the United States, the dispute concerns subject matter capable of settlement by arbitration under the laws of the United States. The Court rejected Guatemala's arguments based on FAA Chapter 1, statutory purpose and structure, the presumption against extraterritoriality and the surplusage canon. Memorandum Opinion (10 February 2026), pp. 11–20
2. A stay under Article VI of the New York Convention is refused at this stage. Lack of finality in Guatemala is not a ground for a stay; the relevant test is whether the award is binding, and that question goes to refusal of enforcement, not to deferral. The first two Europcar factors weigh against a stay and the others are neutral or against it. Guatemala may apply again before judgment. Memorandum Opinion, pp. 20–28
3. Even if the Court had inherent authority to stay a Convention enforcement action, it would not grant one. The stay sought would last for an indefinite period, and Guatemala showed no pressing need for it; continued litigation is not a hardship. Memorandum Opinion, pp. 29–30
4. Forum non conveniens is not available in proceedings to confirm a foreign arbitral award in the D.C. Circuit, because only U.S. courts can attach foreign commercial assets in the United States. This applies even where the award is purely domestic to a single foreign State. The Court acknowledged the conflict with the Second Circuit's approach. Memorandum Opinion, pp. 30–33
5. In No. 22-cv-1674, the Magistrate Judge recommended jurisdiction under either Convention and under the FSIA arbitration exception. Guatemala, not its Ministry of Communications, Infrastructure and Housing, was the contracting party and the respondent named in the awards; the Ministry has no separate legal personality. International comity is not a ground for dismissal under Article V. Report and Recommendation (13 February 2025), pp. 5–16
6. On de novo review, the District Judge adopted the Report in full. Partial payment of the awards under Guatemalan judgments does not make forum non conveniens available, and the cost of defending the suit is not hardship justifying a stay. Opinion and Order (12 December 2025), pp. 2–4

Procedural history

1. 7 November 2014Sigma and Guatemala conclude a contract to build about 100 km of public highways, with an arbitration clause.
2. November 2017Guatemala terminates the contract unilaterally and offers about $4.6 million.
3. 27 October 2021An arbitral tribunal in Guatemala awards Sigma over $37 million plus post-judgment interest.
4. December 2021Guatemala files a Recurso de Revisión in the Second Civil Superior Court of Appeals of Guatemala. It also brings Amparo actions; the Constitutional Court grants a temporary stay of the Confirmation Judgment (decision dated 22 April 2022).
5. October 2022The Guatemalan Court of Appeals confirms the arbitral award.
6. 10 June 2022In the separate action No. 22-cv-1674, Sigma petitions to confirm three other Guatemalan awards.
7. 13 February 2025No. 22-cv-1674: Magistrate Judge Upadhyaya recommends denying Guatemala's motion to dismiss and denying a stay without prejudice.
8. 25 October 2024Sigma files the petition in No. 24-3055 to confirm the October 2021 award.
9. 12 December 2025No. 22-cv-1674: Judge Chutkan adopts the Report and Recommendation in full.
10. 10 February 2026No. 24-3055: Judge Sooknanan denies Guatemala's motion to dismiss or stay. A merits briefing schedule is to follow.

Tribunal, counsel and experts

Decided by

• Sparkle L. Sooknanan Judge, United States District Court for the District of Columbia
• Moxila A. Upadhyaya Judge, United States District Court for the District of Columbia — appointed by a court (Magistrate Judge; Report and Recommendation in No. 22-cv-1674)
• Tanya S. Chutkan Judge, United States District Court for the District of Columbia

For the respondent

Greenberg Traurig, LLP

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Keywords

• enforcement
• recognition of foreign arbitral award
• New York Convention
• Panama Convention
• Federal Arbitration Act
• FSIA arbitration exception
• sovereign immunity
• forum non conveniens
• stay of enforcement
• Article VI New York Convention
• Europcar factors
• binding award
• Recurso de Revisión
• amparo
• international comity
• domestic arbitration
• highway construction
• Guatemala

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