FSIA, RICO, And New York Convention Developments All In One Month

• Jurisdiction: United States,Federal
• Law Firm: Steptoe & Johnson
• Subject Matter: Litigation, Mediation & Arbitration, Arbitration & Dispute Resolution, Sovereign Immunity: Public Sector Government, Personal Injury
• Author: Mr Steven Davidson, Michael Baratz, Molly Bruder Fox and Michael G. Scavelli
• Published date: 16 May 2023

First Tuesday Update is our monthly take on current issues in commercial disputes, international arbitration, and judgment enforcement. We interrupt our three-part series examining whether the English courts can issue a worldwide freezing order against a foreign state in support of efforts to enforce an arbitral award or foreign judgment to cover three significant updates.

First, the United States Supreme Court issued its decision in Turkiye Halk Bankasi A.S. v. United States, No. 21-1450, 598 U.S. __ (2023) (Halkbank), holding that the Foreign Sovereign Immunities Act (FSIA) applies only in civil, not criminal, cases, rejecting Defendants' argument that language from Amerada Hess v. Argentine Republic, 488 U.S. 428, 439 (1989) that the FSIA is the "sole basis" for jurisdiction over foreign state actors. Second, the Supreme Court heard oral argument in Yegiazaryan v. Smagin and CMB Monaco v. Smagin, which will decide whether a RICO claim against a Russian citizen who resides in California can be brought based on conduct that impairs enforcement of a foreign arbitration award, which was confirmed as a California judgment. Finally, we update one of our prior reports'the Eleventh Circuit issued its en banc decision in Corporacion AIC, SA v. Hidroelectrica Santa Rita S.A., and ruled that in a New York Convention case where the arbitration is seated in the United States, or where United States law governs the conduct of the arbitration, domestic law'that is, Chapter 1 of the Federal Arbitration Act (FAA)'provides the grounds for vacatur of an arbitral award.

Halkbank - SCOTUS Holds FSIA Doesn't Apply to Criminal Cases

Halk Bankasi A.S. (Halkbank), a Turkish state-owned bank, was accused of conspiring to evade US sanctions against Iran. See Turkiye Halk Bankasi A.S. v. United States, No. 21-1450, 598 U.S. __ (2023) (Halkbank). Halkbank moved to dismiss the indictment on sovereign immunity grounds; the district court denied the motion and the Second Circuit affirmed. Defendants argued that Argentine Republic v. Amerada Hess Shipping Corp., 488 U.S. 428, 434 (1989) stands for the proposition that the FSIA is the "sole basis" for jurisdiction over foreign state actors in all cases, including criminal cases. However, the Supreme Court expressly rejected this proposition. Halkbank, slip op. at 12. The Supreme Court warned that these prior statements are "general language in [a] judicial opinion," which must be read "as referring in context to circumstances similar...