Sociedad Concesionaria Metropolitana de Salud S.A. v. Webuild S.P.A

Case summary

At a glance

Parties: Sociedad Concesionaria Metropolitana de Salud S.A. (SCMS), a Chilean company (appellant), v. Webuild S.p.A, an Italian construction company (appellee)
Case no.: United States Court of Appeals for the Third Circuit, No. 24-3005 (appeal from D. Del. Civil No. 1:23-cv-01175)
Forum and rules: Petition to confirm, recognize and enforce a foreign arbitral award under 9 U.S.C. § 207 (Federal Arbitration Act implementing the New York Convention)
Treaty: New York Convention of 10 June 1958; arbitration clause in the SCMS–Astaldi contract (Santiago Center for Arbitration and Mediation)
Court: Third Circuit: Shwartz, Matey and Fisher, Circuit Judges; opinion by Fisher (precedential)
Underlying award(s): Chilean arbitral award in favour of SCMS against Astaldi, with damages reduced by the Chilean Court of Appeals; the Chilean Supreme Court held Astaldi's further appeal inadmissible
Sector: Hospital concession; construction
Outcome: The District Court's dismissal for lack of personal jurisdiction was vacated. The case was remanded for the District Court to decide whether Webuild is Astaldi's successor in interest.

The dispute

In 2014 Chile's Ministry of Public Works awarded a contract to design, build and operate a hospital in Santiago. The contract was assigned to SCMS, which subcontracted design and construction to Astaldi, an Italian company, under a clause providing for arbitration before the Santiago Center for Arbitration and Mediation. Astaldi entered an Italian "Concordato" restructuring in September 2018. SCMS terminated the contract in January 2019 and won an arbitral award against Astaldi. During the arbitration, Astaldi's business, said to include the hospital project, was spun off into Webuild. SCMS petitioned in Delaware to enforce the award against Webuild as Astaldi's successor in interest, relying on quasi in rem jurisdiction over Webuild's shares in its Delaware subsidiary, Webuild US Holdings, Inc. Webuild argued that Shaffer v. Heitner requires minimum contacts for all quasi in rem jurisdiction and that no court had found Webuild to be SCMS's debtor.

Key holdings

Under footnote 36 of Shaffer v. Heitner, a court may exercise traditional quasi in rem (attachment) jurisdiction, without minimum contacts, in an action to collect on a liability that has already been adjudicated. The minimum-contacts requirement in Shaffer applies to plenary actions that determine liability. It does not apply to post-judgment proceedings, because the original cause of action has merged into the judgment. pp. 17–21
Rush v. Savchuk and Nehemiah do not decide the point. Neither concerned the collection of a judgment already rendered, and Burnham abrogated Nehemiah. pp. 18–19
The logic of footnote 36 extends to foreign judgments and to foreign arbitral awards under the New York Convention. A district court may therefore exercise attachment jurisdiction based on the mere presence in the forum of the award debtor's property, and that property need not relate to the underlying cause of action. pp. 25–31
Some jurisdictional basis over the defendant or its property is still required. Decisions holding that no jurisdiction at all is needed are constitutionally suspect, and the Court does not endorse them. The holding does not necessarily apply to domestic arbitral awards. p. 26, nn. 11–12
The District Court erred by dismissing the petition without first deciding whether Webuild is Astaldi's successor in interest. That question decides jurisdiction, and the District Court has both the power and the obligation to resolve it, even if it is intertwined with the merits. If Webuild is the successor, a court of competent jurisdiction will have determined that it is the debtor. pp. 31–33
The Court of Appeals declined to decide the successor question itself. That question is complex and heavily factual: it involves the choice between Delaware and Italian law, the Italian Concordato and the Italian merger and spin-off. The dismissal was vacated and the case remanded. pp. 33–34

Procedural history

2014Chile's Ministry of Public Works awards the Santiago hospital contract to Astaldi Concessioni S.R.L., which assigns it to SCMS. SCMS subcontracts design and construction to Astaldi.
September 2018Astaldi commences a Concordato restructuring in Italy.
January 2019SCMS terminates the contract. An arbitration in Chile follows and results in an award in favour of SCMS.
July 2020An Italian court approves Astaldi's restructuring plan. Webuild acquires the majority of Astaldi's business on 1 August 2021.
January 2022Astaldi petitions the Chilean Court of Appeals, which reduces the damages but otherwise affirms the award. The Chilean Supreme Court holds Astaldi's appeal inadmissible.
27 September 2024The District of Delaware (Chief Judge Colm F. Connolly) dismisses SCMS's petition for lack of personal jurisdiction.
1 October 2025Appeal argued before the Third Circuit.
18 May 2026The Third Circuit vacates the dismissal and remands for a decision on whether Webuild is Astaldi's successor in interest.