Preble-Rish Haiti v. Bureau de Monetisation de Programmes d’Aide au Developpement (Haiti)
Ad hoc (New York seat) · Investment (ICSID and treaty) · United States (New York) · 6 Aug 2021
Why it matters
This case is significant for its holding that the Foreign Sovereign Immunities Act does not preclude an arbitral tribunal from ordering a foreign state entity to post pre-award security. It reinforces the power of arbitrators to grant interim measures even when the respondent challenges jurisdiction and refuses to participate, and it clarifies that a pending court challenge to arbitration does not automatically stay proceedings.
Summary
Preble-Rish Haiti SA (PRH) entered into three contracts with Haiti's BMPAD for the supply of diesel, jet fuel, and gasoline. After disputes arose, PRH initiated arbitration in New York under the contracts' arbitration clause. BMPAD challenged the tribunal's jurisdiction in New York state court, arguing the arbitration clause was invalid under Haitian law and that PRH's demand was procedurally defective. BMPAD did not obtain a stay or temporary restraining order. The tribunal proceeded and PRH sought an interim award of $30 million in security. BMPAD refused to participate, citing its jurisdictional challenge and the FSIA. The tribunal held a hearing and granted partial security of $23,043,429.79, finding that PRH had shown a likelihood of success on the merits, that BMPAD's assets were at risk of dissipation, and that the FSIA does not apply to arbitration. The tribunal also noted that BMPAD had waived any immunity by agreeing to arbitrate. The award was made subject to further orders of the tribunal or courts.
The detail
Parties: Preble-Rish Haiti v. Bureau de Monetisation de Programmes d’Aide au Developpement (Haiti)
Case number: italaw/cases/9294
Outcome: PRH's motion for partial pre-award security granted in part; BMPAD ordered to deposit $23,043,429.79 into escrow as security for PRH's claims.
Quantum: $23,043,429.79
Applicable law: Three contracts dated May 13, 2020 (diesel, jet fuel, gasoline); arbitration clause providing for New York seat; New York law; Haitian law raised by respondent; Foreign Sovereign Immunities Act (FSIA) considered.
Issues in play: The tribunal addressed whether the FSIA bars an arbitral panel from ordering pre-award security against a foreign sovereign entity. It held that the FSIA does not apply in arbitration and, alternatively, that the respondent waived immunity by agreeing to arbitrate.
Read the full decision at italaw ↗
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