[00:00:00] Speaker 01:
Space number 24-7081, Dutch Delicom AG versus Republic of India at balance.

[00:00:07] Speaker 01:
Ms.

[00:00:08] Speaker 01:
Menaker for the balance.

[00:00:09] Speaker 01:
Ms.

[00:00:09] Speaker 01:
Boykin for the appellate.

[00:00:12] Speaker 03:
Good morning, counsel.

[00:00:14] Speaker 03:
Ms.

[00:00:15] Speaker 03:
Menaker, please proceed when you're ready and apologize if I pronounced that incorrectly.

[00:00:21] Speaker 00:
Good morning.

[00:00:22] Speaker 00:
May it please the court?

[00:00:24] Speaker 00:
India has reserved three minutes for rebuttal.

[00:00:27] Speaker 00:
India respectfully requests that this court reverse the district court's judgment, which took the extraordinary step of enforcing an arbitral award against a foreign sovereign without even giving that sovereign India an opportunity to brief its preserved merits defenses after the district court denied its sovereign immunity defenses.

[00:00:50] Speaker 00:
India has raised several issues on appeal

[00:00:52] Speaker 00:
all of which it preserves.

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But today, I'd like to focus on two of those issues that are primed for this court to reverse the district court's judgment.

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First, India did not waive its preserved merits defenses when it invoked the P&ID framework.

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And second, when reviewing those merits defenses, there is not clear and unmistakable evidence that the court should defer to the conclusions of the arbitral tribunal.

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So turning to the first of those arguments,

[00:01:22] Speaker 00:
The district court committed reversible error by violating the two step framework that this court established in the P and I D versus Nigeria case, which held that a foreign state is entitled to first have its colorable assertions of immunity determined before having to defend on the merits of a claim.

[00:01:43] Speaker 05:
And guided by difficulty for you here.

[00:01:48] Speaker 05:
is that your arguments about the terms investor and investment, they may be right or wrong as a substantive matter, but they don't seem to me colorable as an immunity matter in light of our cases.

[00:02:08] Speaker 00:
With respect, Your Honor, as of the date when we filed our motion to dismiss, which was back in September of 2021,

[00:02:16] Speaker 00:
our immunity defenses were more than colorable at that time.

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And that is because up until that time, there had been ambiguity and disagreement amongst the courts as to whether our type of an immunity defense, which was that DT.

[00:02:35] Speaker 05:
You have, you have still X, which is about the term investment and still X and Chevron are

[00:02:43] Speaker 05:
about investment and investor arguments in a bit, going to scope.

[00:02:49] Speaker 00:
That's right.

[00:02:50] Speaker 00:
They're both distinguishable, Your Honor.

[00:02:52] Speaker 00:
In Stilex, Moldova, that case was under the Moldova-Ukrainian BIT.

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And Moldova argued that the claims did not fall within the scope of the agreement to arbitrate because the investor had structured its investment

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through the BVI allegedly to evade Ukrainian currency controls.

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And so that was more akin to an argument that we made and preserved on the merits, didn't make preserved on the merits, our fraud argument.

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They're arguing that the investment was made illegally and therefore the scope of those claims did not fall within the agreement to arbitrate.

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In Chevron, Ecuador said again that contract claims

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that Chevron wanted to bring did not fall within the scope of the arbitration agreement.

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And in your next era two case, in fact, you distinguished Spain's arguments from the claimants arguments that were made, excuse me, the respondents arguments that were made in both Stylix and Moldova.

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And if you look at page 1130, 1103, excuse me, of the next era two case,

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You can see there that this court says that in both Chevron and Stylaks, the sovereigns argued that they hadn't agreed to arbitrate because the arbitration agreement did not extend to the disputes.

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So that was a scope issue.

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And it then characterized Spain's argument as being somewhat different because there Spain was arguing that the energy charter treaty did not extend to EU nationals.

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like the claimants there.

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So that was an issue as to whether the investor was a proper offeree of the offer to arbitrate in the bilateral investment treaty.

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And that is akin to the argument that we made before the district court.

[00:04:50] Speaker 05:
And so certainly at that time- You agree that the through line of all those cases is that arguments about the existence of an agreement

[00:05:03] Speaker 05:
go to immunity and therefore jurisdiction, arguments about the scope of the agreement go to the New York convention merits defense.

[00:05:14] Speaker 05:
Yes.

[00:05:14] Speaker 05:
That's why in this case, there's no doubt, there's no doubt that India signed the bid with Germany and it protects German investors with regard to investment disputes.

[00:05:31] Speaker 05:
And there's a question about

[00:05:34] Speaker 05:
whether the investor includes the corporation one line up in the ownership chain.

[00:05:43] Speaker 05:
But it seems as much about scope as can be.

[00:05:47] Speaker 00:
But I respectfully disagree because it is about the existence of the agreement.

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The agreement needs to be with a party or for the benefit of a party.

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And here, simply by saying that you are a German.

[00:06:00] Speaker 05:
There is an agreement.

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India has made an agreement with Germany to protect German investors.

[00:06:08] Speaker 05:
There's a question whether this corporation is a German investor.

[00:06:14] Speaker 00:
Correct.

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And so there we made an agreement for the benefit of German investors.

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So one necessarily has to answer the question as to whether you are a German investor that falls within the scope of that agreement, excuse me, within the confines

[00:06:31] Speaker 00:
Well, I'm using that terminology, I think in a different manner than the other cases use it when you talk about the scope of claims, because it's very different to say that we agreed to arbitrate with German investors.

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And my question here, like in Chevron versus Ecuador, but we didn't agree to arbitrate contract claims.

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We only agreed to arbitrate treaty claims.

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That's a scope question.

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But clearly, it cannot be, for instance, that a

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group of German university students go over to India on vacation and one trips and falls in a hotel room and says, well, I will bring a claim under the bilateral investment treaty.

[00:07:09] Speaker 00:
This is made for the benefit of me.

[00:07:11] Speaker 00:
I'm an investor.

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I'm helping the Indian economy.

[00:07:15] Speaker 00:
I'm paying for hotels, cab fares, right?

[00:07:17] Speaker 00:
There has to be some limitation to determine whether there is an arbitration agreement, whether there exists an arbitration agreement.

[00:07:26] Speaker 03:
And again, in that scenario, the way that would come up in an FSIA context in our court, it would be predicated on an arbitrator actually concluding that it's within the terms of the arbitration agreement so that the arbitrator has jurisdiction, right?

[00:07:42] Speaker 03:
So I mean, I take your point that there's going to be some line drawing questions at some point that seem like under our decisions, they actually do go to the existence of the agreement rather than to its scope.

[00:07:52] Speaker 03:
But it would have to be a context in which the arbitration panel or the arbitrator, depending on what sort of procedure followed, would have concluded that the agreement actually does give that claim to them.

[00:08:03] Speaker 03:
And it would still have to be so outlandish like the German tourists that it would then come to us.

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And the argument would be made, well, that actually went to jurisdiction rather than to scope.

[00:08:11] Speaker 00:
Sure, but you would have de novo review over that.

[00:08:14] Speaker 00:
And yes, and there are arbitrator panel determinations that could be outlandish in that regard.

[00:08:20] Speaker 00:
But you would think there that the state would have the opportunity to say that they are immune, not just defend on the merits of that claim, but to say we are immune.

[00:08:28] Speaker 00:
We never agreed to arbitrate.

[00:08:30] Speaker 00:
So I'm not asking you here now to agree with me on the ultimate question of our immunity.

[00:08:40] Speaker 00:
but to look back into September 2021 and say it certainly was colorable at that time.

[00:08:46] Speaker 00:
And what shows that it was colorable.

[00:08:48] Speaker 03:
And what happens after that is Nexdera?

[00:08:50] Speaker 00:
Well, it is Nexdera.

[00:08:51] Speaker 03:
But the fact- Is there something else?

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I mean, because- No.

[00:08:53] Speaker 03:
OK.

[00:08:54] Speaker 00:
No, it's Nexdera.

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And the fact that this court heard Nexdera too and was looking at two divergent- well, there were three district court decisions, as you know, but two divergent ones.

[00:09:07] Speaker 00:
So you had nine ran and you had Blasket.

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And in Blasket, the district court judge found, contrary to Nexdera 2, you reversed that decision.

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So clearly there, that was a colorable argument that they were making there at that time.

[00:09:22] Speaker 03:
That decision was post Chevron and Stylix.

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That's correct.

[00:09:25] Speaker 00:
That's correct.

[00:09:25] Speaker 00:
So that's post Chevron, post Stylix.

[00:09:27] Speaker 00:
And I think in Nexdera 2, the court actually looks, and the way that it's characterizing these cases, it's extending the holdings of those cases.

[00:09:37] Speaker 00:
It's an extension.

[00:09:38] Speaker 00:
because it wasn't clear prior to that time.

[00:09:41] Speaker 00:
Another example that we gave in our briefs was the case where actually Deutsche Telekom's counsel is counsel in that case for Ecuadorian, Equatorial Guinea, excuse me, Marcel Klinken, where that was three months after we filed our motion to dismiss.

[00:10:01] Speaker 00:
And the respondent there argued that the district courts

[00:10:06] Speaker 00:
rejection of its immunity defense should be reversed because of Blasket.

[00:10:12] Speaker 00:
So they were making the argument there that that was still ambiguous enough.

[00:10:18] Speaker 03:
Can I ask a question about how you would ask us to construe the colorability standard from PNID?

[00:10:26] Speaker 03:
And with respect to two sub aspects of it.

[00:10:29] Speaker 03:
So one is I read PNID as borrowing from Bell versus Hood, which is a pretty

[00:10:38] Speaker 03:
strict standard, and it has to be so insubstantial that the claim if it were brought in the trial court wouldn't even support federal jurisdiction.

[00:10:46] Speaker 03:
So that's part of the question is, what do we do with that standard vis-a-vis colorability in the way you read our opinion?

[00:10:52] Speaker 03:
And then secondly, if there's panel precedence, I know you have an argument that even under the panel precedence as they existed at the time, it's still colorable because look at what happened with next area and look what happened to district court, one district court.

[00:11:05] Speaker 03:
I understand that.

[00:11:06] Speaker 03:
But let's suppose the panel precedents are preclusive of that.

[00:11:10] Speaker 03:
And so let's suppose this post next era.

[00:11:12] Speaker 03:
Let's make it easy.

[00:11:12] Speaker 03:
Let's suppose this post next era.

[00:11:14] Speaker 03:
But then the argument for colorability isn't that you actually have a colorable claim under

[00:11:19] Speaker 03:
existing panel precedent, it's that there's an abstract way in which you have exist a color of argument because you're not taking the panel precedent as a given because you might win in the on bank quarter might win in the Supreme Court.

[00:11:29] Speaker 03:
So what's your reaction?

[00:11:30] Speaker 00:
Yes.

[00:11:31] Speaker 03:
Either or both.

[00:11:32] Speaker 00:
Well, I agree with your suggestions on both, which is first, it's a very low standard or a very low hurdle for us to get over to show color ability.

[00:11:41] Speaker 00:
And in a slightly different context, I've seen it as a hint of a suggestion.

[00:11:47] Speaker 00:
And if you look at PNID itself, that was a decision of 2020 of this court.

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And this court reversed and said that the district court had to hear the immunity arguments that Nigeria was making before its merits arguments.

[00:12:05] Speaker 00:
That immunity argument that Nigeria was making in that case, that case was the arbitral seat was in London, and a Nigerian court had taken jurisdiction and vacated or set aside the award.

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And Nigeria was arguing that as an issue of immunity, saying, well, our award has been set aside, not by the court of the seat, but has been set aside.

[00:12:25] Speaker 00:
And therefore, no award exists, and we're immune.

[00:12:29] Speaker 00:
And this court found that that was a colorable enough assertion to go back.

[00:12:34] Speaker 00:
And what's interesting is if you look at the 2022 decision, because that case went up and down the courts a bit, of P&ID, the court here

[00:12:44] Speaker 00:
rejects the immunity or upholds the rejection of the immunity claim and finds that it's precluded by 2016 precedent of the court, finding that when an award has been set aside, if you're using that as an objection or a defense, that that is a merits defense.

[00:13:03] Speaker 00:
Only under the New York Convention, it doesn't implicate immunity.

[00:13:06] Speaker 00:
So in 2020, when this court said that Nigeria had the right to have its

[00:13:12] Speaker 00:
immunity questions heard before the merits.

[00:13:15] Speaker 00:
You already had a 2016 precedent that you said foreclosed the merits of that defense, and yet it was still colorable and it's still entitled them to have that heard.

[00:13:29] Speaker 01:
So is it your position as well that India has had no prior opportunity to present these defenses?

[00:13:38] Speaker 00:
India, that is correct.

[00:13:40] Speaker 00:
because on the two immunity defenses that we did raise, no U.S.

[00:13:46] Speaker 00:
court has reviewed those defenses because the district court found that they weren't immunity defenses.

[00:13:52] Speaker 00:
It then said they would consider them as New York convention defenses.

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However, it said that it deemed the parties to clearly and unmistakably delegate

[00:14:05] Speaker 00:
authority for deciding those defenses to the arbitral tribunal, and it had no authority to second guess those determinations.

[00:14:13] Speaker 00:
So no one has looked at that.

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And then with our preserved defenses, no U.S.

[00:14:18] Speaker 00:
court has considered those either.

[00:14:19] Speaker 03:
And we identify those arguments to be considered elsewhere.

[00:14:22] Speaker 03:
Right.

[00:14:22] Speaker 03:
And then it haven't been met with only some of them from your perspective.

[00:14:29] Speaker 00:
Some of them.

[00:14:29] Speaker 00:
So there are two.

[00:14:30] Speaker 00:
One is fraud.

[00:14:31] Speaker 00:
One is the essential security interest.

[00:14:35] Speaker 00:
Deutsche Telekom acknowledges that neither the Arbitral Tribunal nor the Swiss Court had made any determinations on fraud, given the timing of those allegations.

[00:14:47] Speaker 00:
With the essential security interest, those courts, excuse me, the Arbitral Tribunal and the court had looked at that.

[00:14:53] Speaker 00:
But again, that has no bearing on the United States' Court's ability to review those determinations.

[00:15:01] Speaker 00:
And we

[00:15:02] Speaker 00:
contend that the review of those determinations should be an independent review.

[00:15:08] Speaker 00:
They are not to defer to the arbitral tribunal's determinations because there simply is no clear and unmistakable evidence that the parties agreed to delegate to the tribunal the authority to make that determination.

[00:15:22] Speaker 00:
The district court relied on dicta in some cases of this court, the Stilex and

[00:15:32] Speaker 00:
I believe the style X case when it held that because the bit incorporated or referenced the answer trial.

[00:15:39] Speaker 05:
You're losing me with I'm sorry, are we are we talking about the investor investment arguments that might you want to make into immunity but if they're not immunity their substantive New York Convention defenses or are we talking about the other

[00:15:58] Speaker 00:
I was talking about both because the ones that we have not had a chance to brief yet and that we preserved, of course we want those heard as New York convention cases.

[00:16:09] Speaker 00:
We had, and to clear up any misconception, we had no intention of getting a second bite of the apple on our immunity defenses.

[00:16:18] Speaker 00:
So if they had been heard as immunity defenses, we would not then have re-raised them under the New York convention.

[00:16:24] Speaker 00:
It would not have made sense.

[00:16:25] Speaker 00:
They would have been determined.

[00:16:27] Speaker 00:
They have not been heard, though.

[00:16:29] Speaker 00:
So if we went back, we would want to raise them under the New York Convention.

[00:16:33] Speaker 00:
Of course, we'd want to.

[00:16:34] Speaker 05:
So as to those defenses, the investor and investment, but not the other two.

[00:16:41] Speaker 05:
Yes.

[00:16:41] Speaker 05:
Then we come to the question whether the district court.

[00:16:49] Speaker 05:
So he says no immunity, but he goes on to resolve them as New York Convention defenses.

[00:16:55] Speaker 05:
And he says,

[00:16:57] Speaker 00:
not for me to decide because those defenses were delegated to the arbitrator correct so that's what he said although we say that is incorrect because we didn't delegate those to the arbitrator nor did we delegate our preserved merits defenses to the arbitrator the only thing that the district judge looked at was the fact that the uncentral rules governed the arbitration and those rules contain a standard

[00:17:26] Speaker 00:
competence, competence clause, there is no clear and unmistakable evidence.

[00:17:30] Speaker 00:
And that's, of course, the standard under first options, that the parties to this dispute, to the bit, which is to be interpreted as a contract, that they intended to delegate exclusive authority to the arbitrators to determine these issues.

[00:17:48] Speaker 00:
And if you look at BG versus Argentina in the US Supreme Court, a court there

[00:17:53] Speaker 00:
says very clearly that ultimately interpreting a treaty is like interpreting a contract.

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And what is important is the intentions of the parties.

[00:18:00] Speaker 00:
And here we have two things that I think are of utmost importance.

[00:18:06] Speaker 01:
One is Argentina counsel.

[00:18:08] Speaker 01:
This court was reversed in BG versus Argentina because the Supreme Court said to us all of these questions, regardless of the facts sovereigns are involved, are to be decided by the arbitrator.

[00:18:22] Speaker 01:
Yes.

[00:18:24] Speaker 01:
Yes, no.

[00:18:24] Speaker 01:
I take that as very strong language from the Supreme Court.

[00:18:29] Speaker 00:
Yes, but what the Supreme Court said when it had made that determination, it said that what you need to do to determine if it is to be resolved by the arbitrators is to look at the contracting party's intent.

[00:18:42] Speaker 00:
And so that's what I want to look at here.

[00:18:45] Speaker 00:
And here, the contracting parties to the treaty are India and Germany.

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And there can be no doubt

[00:18:52] Speaker 00:
that India and Germany understand the Ancetral rules and Article 21 in particular to afford the Arbitral Tribunal an initial determination of these issues to be later reviewed by a court.

[00:19:10] Speaker 00:
And that is absolutely, Deutsche Telekom doesn't contest that.

[00:19:16] Speaker 00:
That is their understanding of those clauses.

[00:19:18] Speaker 00:
And when you look at our bit in particular in Article 9 2B5,

[00:19:22] Speaker 00:
It says that the award shall be enforced in accordance with the national laws of the contracting party where the investment has been made.

[00:19:29] Speaker 00:
That's Indian law.

[00:19:31] Speaker 00:
So, and we have other arguments, of course, that we construe that choice of law clause as being a form selection clause, but even at its most narrow as a choice of law clause, that means that in enforcing this award, we have to apply Indian law.

[00:19:46] Speaker 00:
There is no doubt that Indian law

[00:19:49] Speaker 00:
interprets the uncentral rule as simply giving the look.

[00:19:54] Speaker 03:
Can I just ask a question about where this fits in the overall architecture role we have before us?

[00:19:58] Speaker 03:
So you took a collateral order appeal.

[00:20:01] Speaker 03:
from the denial of dismissal on jurisdictional, right?

[00:20:06] Speaker 00:
I think not.

[00:20:07] Speaker 00:
I think we waited until final judgment was entered.

[00:20:10] Speaker 00:
It was a few weeks later.

[00:20:11] Speaker 03:
Oh, OK, true, true.

[00:20:12] Speaker 03:
Yeah, OK.

[00:20:14] Speaker 03:
But then what do we have before us?

[00:20:15] Speaker 03:
Because we clearly have the jurisdictional question before us.

[00:20:19] Speaker 03:
And then if we suppose we disagree with you on jurisdiction,

[00:20:25] Speaker 03:
so that we assume that the questions that you think are jurisdictional ones actually go to scope.

[00:20:32] Speaker 03:
Let's just suppose that.

[00:20:33] Speaker 03:
I know you resist that, but let's just suppose that.

[00:20:36] Speaker 03:
If that's true, then we also have before us what the district court did to go on and decide the merits of that question as opposed to the ones that are just bracketed off and never addressed by the district court because the district court said that those were effectively waived or forfeited by you.

[00:20:55] Speaker 03:
So on, if we go on to the answer trial question, the question of does the provision in the answer trial that deals with what the arbitrator has jurisdiction to do, we address that one as well.

[00:21:12] Speaker 00:
Yes.

[00:21:13] Speaker 03:
If we get, if we get past your jurisdiction.

[00:21:18] Speaker 00:
I believe so because the court,

[00:21:22] Speaker 00:
If you go back and say that it was error to deny our, you can either deny our foreign sovereign immunity defenses, or you can say, well, they were denied, they should have been scoped.

[00:21:39] Speaker 00:
However, you should not have then said that we waived our ability to bring the merits defenses.

[00:21:48] Speaker 00:
And then since the court

[00:21:50] Speaker 00:
in its order has already said that it finds itself bound by the arbitral tribunal's determination of those and wasn't able to second guess.

[00:21:58] Speaker 00:
I believe that that is then before you now, and we're asking you to reverse on that.

[00:22:03] Speaker 00:
That is a de novo determination, whether there was clear and unmistakable evidence that we intended to delegate this question to the arbitrators.

[00:22:11] Speaker 00:
And so if you reversed on that, then saying there was no clear and unmistakable evidence of delegation,

[00:22:18] Speaker 00:
then it would be remanded, vacated or remanded, and we would have heard our New York Convention defenses under an independent review standard.

[00:22:29] Speaker 05:
The Indian law that you cite as invoking a model that the arbitrator gets to decide arbitrability questions in the first instance, then subject to judicial review, is that

[00:22:48] Speaker 05:
Um, specific to onset trial or just general, like India's version of BG.

[00:22:56] Speaker 05:
Just this is how presumptively how things work.

[00:22:59] Speaker 00:
I would need to double check, but I believe it does contain some, um, case law that would have dealt with onset trial, uh, because they, India, for instance, is not a party to the exit convention and they

[00:23:14] Speaker 00:
Exactly.

[00:23:16] Speaker 05:
I mean, I guess the reason I ask is we have cases, the same cases I was citing at you earlier, those cases say that invoking a provision in the contract which calls for application of uncentral rules, which permit the arbitrator to decide questions of arbitrability,

[00:23:43] Speaker 05:
is sufficient to assign those questions exclusively to the arbitrator?

[00:23:49] Speaker 00:
Sure.

[00:23:49] Speaker 00:
And I just have a few responses to that.

[00:23:51] Speaker 00:
That first of all, those cases are looking, again, what you need to do in each of the cases is just not to say that there are the unto trial rules which are being referenced, but you have to look at the intent of the parties.

[00:24:05] Speaker 00:
And so the court presumably did or should have looked to the intention of the parties in those cases

[00:24:13] Speaker 00:
to those particular bits to determine if there was clear and unmistakable evidence.

[00:24:18] Speaker 00:
And that's what we're asking this court to do here is to not have any flatline rule.

[00:24:24] Speaker 00:
We need to look to the intention of these parties.

[00:24:26] Speaker 00:
And there's just no way that India and Germany intended to delegate exclusive authority to the arbitrators when in our submission, because the background law and

[00:24:40] Speaker 05:
I mean, what's odd about this is, if you were thinking about the world from first principles, you might think that only the judges can decide these questions, or only the arbitrators can decide these questions, or door number three, the arbitrators decide in the first instance in the judge's review, which you say is Indian law.

[00:25:07] Speaker 05:
And yet,

[00:25:09] Speaker 05:
know, BG says your options are door number one or door number two.

[00:25:15] Speaker 05:
And I don't know what to make of that.

[00:25:19] Speaker 05:
I mean, you know, tend to think I'm bound by Supreme Court precedent.

[00:25:24] Speaker 05:
But is that just no one in these any of these cases is thinking that contract might provide for door number three?

[00:25:34] Speaker 05:
Is that what's going on?

[00:25:36] Speaker 00:
Well, I think that the US is somewhat unique in this regard, because I don't know of any other jurisdiction that does interpret these provisions in the manner that the US courts have done on occasion.

[00:25:52] Speaker 05:
Because our non-FAA law is so arbitration friendly.

[00:25:59] Speaker 00:
I don't know why it is.

[00:26:04] Speaker 00:
I also think that BG in Argentina, and not to just repeat myself, but there first it was looking at a different issue.

[00:26:12] Speaker 00:
It was looking at a time, a procedural time issue.

[00:26:16] Speaker 00:
But it did emphasize, the court did emphasize that what you need to look is for clear and unmistakable evidence.

[00:26:22] Speaker 00:
And you need to look at the party's intent.

[00:26:25] Speaker 00:
And I'd also just point the court's attention to a statement in DT's opposition that we have quoted where they say,

[00:26:34] Speaker 00:
That and I quote.

[00:26:36] Speaker 00:
This is at 21 through the incorporation of the ancestral rules, India agreed to quote to delegate disputes about arbitrability to the arbitrators subject only to post award judicial review.

[00:26:49] Speaker 00:
That's what we're asking for is post award judicial review.

[00:26:52] Speaker 03:
I'm not the thing about that is

[00:26:55] Speaker 03:
That may well be the background principle in Indian law.

[00:26:58] Speaker 03:
I'm not sure that that's not the background principle all over the place.

[00:27:02] Speaker 03:
But yet, we still have these decisions that treat the UNCTRL provision and the parallel wonder under exit as not only creating a regime in which the arbitrator gets the first crack subject to judicial review, but as creating a regime in which the arbitrator gets the first and last crack.

[00:27:21] Speaker 03:
I think that just seems like that's

[00:27:23] Speaker 03:
I mean, this competence idea is not some, you know, unique principle that applies in the narrow corner of the universe.

[00:27:30] Speaker 03:
It seems like it's a pretty universal one abroad, but yet we still have, our decisional law still says that these particular provisions, I think it's basically parallel between a central and what they do is that they give it to the arbitrator in the first instance, and that's exclusive of subsequent judicial review.

[00:27:50] Speaker 00:
Well, I would disagree with that because,

[00:27:53] Speaker 00:
There is a very material distinction between Ancetral and ICSID insofar as ICSID has a two-tier layer of review.

[00:28:00] Speaker 00:
It's an independent review.

[00:28:01] Speaker 00:
So after you have your arbitral award, if you want to review that under essentially the same standards as the New York Convention, I mean, slightly different, but it's ICSID Article 54, it's deferential.

[00:28:15] Speaker 00:
But what you do is you don't go to court to do that.

[00:28:18] Speaker 00:
You have a second tribunal.

[00:28:19] Speaker 00:
It's called an ad hoc committee.

[00:28:21] Speaker 00:
within the arbitral process.

[00:28:22] Speaker 00:
So you have two.

[00:28:23] Speaker 00:
And then when you go to court, it's a much more summary procedure.

[00:28:26] Speaker 00:
So I don't think it can be compared because, of course, they are, you're deferring to the tribunal or the ad hoc committee.

[00:28:32] Speaker 00:
You've already had your level of review.

[00:28:35] Speaker 00:
Whereas here with Uncentral, you haven't.

[00:28:37] Speaker 00:
And I would just also point the court's attention to the DTK versus Hotels case, which was before the Second Circuit in 2021.

[00:28:46] Speaker 00:
When we're talking about these arbitral rules automatically

[00:28:50] Speaker 00:
meaning that you delegate to the arbitrators an exclusive determination, the Second Circuit cast that into doubt when it said you have to look at the particular circumstances, which is what we're saying here.

[00:29:03] Speaker 00:
There it was an arbitration clause under or an agreement governed by the AAA.

[00:29:08] Speaker 00:
There was a AAA arbitration.

[00:29:10] Speaker 00:
And yet there was a question as to whether the clause covered the scope of dispute that was being dealt with.

[00:29:18] Speaker 00:
And the Second Circuit said,

[00:29:21] Speaker 00:
we find it ambiguous.

[00:29:23] Speaker 00:
It's an argument, maybe it's covered, maybe it's not.

[00:29:25] Speaker 00:
So we're finding that it's not clear and unmistakable evidence that you delegated this to the tribunal, and we're going to look at it ourselves.

[00:29:33] Speaker 00:
So even there, when the AAA, I think, is clear, when you look at the history, the legislative or statutory history, when those rules were promulgated, that they had first options in mind, and they wanted to make this delegation.

[00:29:50] Speaker 00:
That's not the case for the 1976 Ancetral Rules for certain, but even in a case governed by the AAA rules, the Second Circuit saw that there could be exceptions based on the particularities of that case.

[00:30:02] Speaker 00:
And that's what we contend should happen here, particularly also, I would also note, with both Chevron and Stilex, which contain the language about the Ancetral Rules delegation, I note that the parties in those cases did not brief and argue that issue.

[00:30:16] Speaker 00:
So in that respect, the court didn't have the full ability or the full opportunity to hear argument on that.

[00:30:23] Speaker 00:
And to the extent that they just accepted or acknowledged that point and were happy with that standard of review, we don't think that that should bind us going forward.

[00:30:33] Speaker 00:
And in that sense, we have called that dicta.

[00:30:37] Speaker 05:
OK.

[00:30:37] Speaker 05:
You have authority for the judicial review model under Indian law.

[00:30:44] Speaker 05:
Do you know what would be the standard of review?

[00:30:48] Speaker 05:
The cases don't seem to speak to it.

[00:30:50] Speaker 05:
Is it de novo review on arbitrability?

[00:30:54] Speaker 05:
Is it review for reasonableness?

[00:30:57] Speaker 05:
Is it review under the US, you know, super deferential?

[00:31:03] Speaker 05:
Does this?

[00:31:05] Speaker 05:
I from the essence of the contract standard.

[00:31:07] Speaker 05:
What?

[00:31:08] Speaker 05:
What is the level of scrutiny?

[00:31:11] Speaker 00:
I understand the question.

[00:31:12] Speaker 00:
I don't know the answer.

[00:31:13] Speaker 00:
And I apologize.

[00:31:14] Speaker 00:
I can get back to the court on that if you would like.

[00:31:18] Speaker 03:
Okay.

[00:31:18] Speaker 03:
Thank you, counsel.

[00:31:19] Speaker 03:
We'll give you a little time for rebuttal.

[00:31:21] Speaker 03:
Thank you.

[00:31:22] Speaker 03:
We'll have from the other side now.

[00:31:35] Speaker 02:
Boykin.

[00:31:36] Speaker 02:
Thank you, Your Honor.

[00:31:37] Speaker 02:
James Boykin on behalf of Deutsche Telekom Petitioner and Appellate

[00:31:41] Speaker 02:
I will first address the argument that the second issue on appeal as to whether the district court erred in not giving India a second round of briefing.

[00:31:58] Speaker 02:
That's foreclosed by their own conduct.

[00:32:01] Speaker 02:
PNID gives the state an absolute right to invoke immunity defenses.

[00:32:08] Speaker 02:
But it also recognizes the inherent right of the sovereign to choose to raise immunity defenses together with merits defenses with, however, the consequence that it would in so doing, it foregoes the right to have the immunity determination made as a threshold matter.

[00:32:26] Speaker 02:
In this case, India did not raise any colorable argument of immunity.

[00:32:33] Speaker 02:
But even if one were to look inside and

[00:32:36] Speaker 02:
their motion to dismiss and find a colorable argument of immunity, one cannot overlook the fact that India raised merits defenses.

[00:32:47] Speaker 02:
And those merits defenses were specifically that there was no investment and there was no investor.

[00:32:54] Speaker 02:
Now, India tries to say this was colorable at the time and was cleared up by next era.

[00:33:03] Speaker 02:
That is not correct.

[00:33:07] Speaker 02:
They do so.

[00:33:07] Speaker 03:
But when you're saying those are merits issues, India was presenting them as jurisdictional arguments, right?

[00:33:12] Speaker 02:
Right.

[00:33:12] Speaker 02:
But this court's clear precedent at the time in Chevron and Stylex held that these do not go to jurisdiction or immunity.

[00:33:20] Speaker 03:
OK, so then that goes to whether they're colorable jurisdictional arguments, not whether they're merits arguments.

[00:33:25] Speaker 02:
We say they're merits arguments.

[00:33:27] Speaker 03:
No, but no.

[00:33:28] Speaker 03:
I think the question is, maybe I'm misunderstanding the architecture here, but I thought

[00:33:33] Speaker 03:
Those are being presented as jurisdictional arguments.

[00:33:35] Speaker 03:
You disagree that they're jurisdictional arguments.

[00:33:38] Speaker 03:
Let's just suppose you're right about that.

[00:33:40] Speaker 03:
But that doesn't answer the question of whether they're colorable jurisdictional arguments.

[00:33:43] Speaker 03:
And if they're colorable jurisdictional arguments, India did not then need to go on and make merits arguments.

[00:33:50] Speaker 03:
At that point, they could have reserved their opportunity to make other merits.

[00:33:54] Speaker 02:
Fair enough.

[00:33:55] Speaker 02:
In that framework, I would say they're not colorable, because Chevron and Stilex have already held that those defenses are not immunity arguments.

[00:34:06] Speaker 02:
They go to.

[00:34:08] Speaker 03:
So what about the point that, as to that, what about the point that even NextEra hadn't been decided?

[00:34:14] Speaker 03:
Right.

[00:34:14] Speaker 03:
So we're in a Chevron Stilex land.

[00:34:18] Speaker 03:
there was a district court decision as counsel pointed out that the district courts went two different ways and on the next era question.

[00:34:26] Speaker 03:
So was that district court decision that went away opposite of the way we saw next era?

[00:34:34] Speaker 03:
Did they get it so wrong that actually it doesn't even meet the Bellevue hood standard for whether it's a substantial argument.

[00:34:41] Speaker 02:
Next era didn't decide any question that was

[00:34:45] Speaker 02:
relevant to this case when their motion to dismiss was filed.

[00:34:49] Speaker 02:
And India's own brief, or the reply brief on page six, acknowledges that next there are really concerned Spain's legal capacity to arbitrate.

[00:35:01] Speaker 02:
It had to do with a question of EU law and whether Spain could have the legal capacity to arbitrate with persons within the EU.

[00:35:11] Speaker 02:
The questions that they framed in front of the district court

[00:35:15] Speaker 02:
In the motion dismiss in this case were clearly covered by style X and Chevron for on their motion to dismiss page twenty seven they complained that the supposed investment.

[00:35:31] Speaker 02:
The.

[00:35:32] Speaker 02:
under the agreement was indirect.

[00:35:36] Speaker 02:
And that in page 26, they talk about DT status as an investor.

[00:35:44] Speaker 02:
And there's nothing about Germany's capacity to have entered into

[00:35:52] Speaker 02:
the agreement with India, there's no allegation that the treaty was never ratified, which would go to the existence.

[00:35:57] Speaker 03:
It has to not even be colorable, including on the indirect one.

[00:36:01] Speaker 03:
And just to tease out what exactly the colorability threshold entails, suppose you have a situation in which the panel precedents that you're relying on, and again, we're in a pre-next era stage.

[00:36:12] Speaker 03:
Suppose you have a situation in which the panel precedents that you say make a claim non-colorable under those precedents included a dissent.

[00:36:23] Speaker 03:
then would you say that the argument is just non-colorable because the panel precedents say they don't go forward, even if there's a panel dissent?

[00:36:31] Speaker 03:
And the case has never gone before the on-bank.

[00:36:33] Speaker 03:
The issue has never gone before the on-bank court, much as the Supreme Court.

[00:36:36] Speaker 02:
Yes.

[00:36:36] Speaker 02:
If it's controlling precedent, it's not colorable.

[00:36:40] Speaker 03:
And I think the most- Even if there's a dissent, and it's never gone before the on-bank court, and it's never gone before the Supreme Court.

[00:36:44] Speaker 02:
I think there's precedent in this circuit that it's bound to apply a panel decision.

[00:36:49] Speaker 03:
Oh, there's no doubt.

[00:36:50] Speaker 03:
We're bound by it.

[00:36:52] Speaker 03:
I think there's at least a subsequent panel would be bound by it.

[00:36:55] Speaker 02:
I guess my question is.

[00:36:56] Speaker 02:
Oh, your question.

[00:36:57] Speaker 02:
Is it colorable in that context?

[00:36:59] Speaker 02:
Right.

[00:37:00] Speaker 02:
Right.

[00:37:00] Speaker 02:
But the question, these questions of investor investment have been settled with Chevron, Stylex, and NextEra did something.

[00:37:10] Speaker 03:
I just questioned it.

[00:37:11] Speaker 03:
Were they so settled that it

[00:37:13] Speaker 03:
Were they so obviously wrong that it's not even colorable?

[00:37:17] Speaker 03:
I know that there's panel precedents that you say make them wrong.

[00:37:23] Speaker 03:
The question is whether they're not even colorable.

[00:37:26] Speaker 02:
In our view, if they're foreclosed by clear circuit precedent that's been consistently applied, then they're not colored immunity defenses.

[00:37:35] Speaker 02:
Because the other rise, the result is going to be that

[00:37:40] Speaker 02:
Every state will come and reassert merits defenses as immunity defenses and to claim they're entitled to the two step process and this circuit court can say over and over again.

[00:37:50] Speaker 02:
Those are actually go to the merits and

[00:37:57] Speaker 02:
It must be the case.

[00:37:58] Speaker 03:
Well, there's definitely a color ability threshold.

[00:38:00] Speaker 03:
And so you're right that at some point, something becomes non-colorable.

[00:38:03] Speaker 03:
I guess the question is, how strict is that standard?

[00:38:06] Speaker 02:
It's pretty low.

[00:38:08] Speaker 02:
It's in PNID.

[00:38:09] Speaker 02:
It has to be plausible.

[00:38:11] Speaker 02:
But our position is that once it's foreclosed by a

[00:38:15] Speaker 05:
One can imagine lots of cases where there's binding circuit precedent and a plausible opportunity for in-bank or cert.

[00:38:24] Speaker 05:
It's like they take the appeal and say, they seek initial in-bank.

[00:38:34] Speaker 02:
And that would be pretty decent.

[00:38:37] Speaker 02:
But if you read the next era, it decides something new that is not

[00:38:43] Speaker 02:
relevant to this case.

[00:38:45] Speaker 02:
But it very heavily relies on Chevron and Stilex.

[00:38:49] Speaker 02:
And there's no indication that Chevron and Stilex are set up for en banc review or that there's questions about their authority.

[00:39:00] Speaker 02:
In fact, this court just relied on them in, as my colleague pointed out, a number of consolidated cases concerning the inter-EU dispute in Spain's authority

[00:39:13] Speaker 02:
and power to arbitrate.

[00:39:15] Speaker 02:
And district courts reached divergent results on that because it involved a sovereign saying, we are constrained by EU law.

[00:39:22] Speaker 02:
That was a novel question.

[00:39:23] Speaker 02:
That was a colorable argument of immunity.

[00:39:27] Speaker 02:
But Chevron and Stilex, on which NextEra relied, those are settled.

[00:39:32] Speaker 02:
So these arguments weren't colorable under the very low threshold.

[00:39:38] Speaker 02:
And I think there's some,

[00:39:43] Speaker 02:
There's also, they knew they weren't colorblind.

[00:39:47] Speaker 02:
One other indication of the lack of colorability of the argument is that in these briefs, it's framed as our proper offeree argument.

[00:39:57] Speaker 02:
In their first, they filed on June 24th a statement of issues that the district court aired in holding that the arbitration exception applied.

[00:40:09] Speaker 02:
In their brief and their statement of issues, they say the district court aired

[00:40:13] Speaker 02:
in not giving de novo review to a proper offer e-defense.

[00:40:18] Speaker 02:
But they never made a proper offer e-defense to the district court.

[00:40:23] Speaker 02:
They won't use those words in their motion to dismiss.

[00:40:27] Speaker 02:
Those proper offer e-defense wasn't even the statement of issues after they filed appeal.

[00:40:31] Speaker 02:
Those words emerge and they encapsulate investor and investment.

[00:40:38] Speaker 02:
They emerge after next era.

[00:40:40] Speaker 02:
So what they're doing is essentially rewriting the motion to dismiss to make it look like it was something akin to what was undecided in next era.

[00:40:53] Speaker 02:
But it's not.

[00:40:55] Speaker 02:
There was never first, never a proper offeree defense argued to the district court.

[00:41:00] Speaker 02:
So it's hard to criticize the district court for not having ruled on an issue not put before it.

[00:41:05] Speaker 03:
And second, what is a proper offering under the bit question about the incentive dynamics that would be at play if we.

[00:41:12] Speaker 03:
It's true color ability in the way that you are because in the way that I think your argument suggests, because I take it that what would end up what happening is that a foreign sovereign.

[00:41:20] Speaker 03:
Because they'd be worried.

[00:41:22] Speaker 03:
that the jurisdictional arguments they made may be seen to be non-colorable under panel circuit precedent would feel like they need to make every merits argument that they have in their initial pleading.

[00:41:38] Speaker 03:
a threshold jurisdictional argument, and then you have 27 merits arguments that follow it, all of which are going to be briefed by a foreign sovereign, then the district court understandably would say, I don't want to deal with all these merits arguments, because I think there's no jurisdiction here.

[00:41:52] Speaker 03:
And then we'd be in a situation in which that all could have been resolved at the jurisdictional stage, but then the foreign sovereign would, because of concerns about being deemed to have waived

[00:42:03] Speaker 03:
merits arguments would have felt the need to develop and introduce that kind of array of merits arguments.

[00:42:10] Speaker 02:
The foreign sovereign need not have such a concern under P and ID, which expressly recognizes its right to a two-step process when it raises colorable immunity.

[00:42:22] Speaker 03:
Right, but it just places all the load-bearing weight on whether it's colorable.

[00:42:26] Speaker 03:
And I guess what I'm saying is, if we don't have a very, very low threshold for what's colorable,

[00:42:32] Speaker 03:
Then a foreign sovereign who's going to be careful just can't risk it.

[00:42:37] Speaker 03:
You just got you got to include all your merits arguments because I could be seen to, for example, in this case, even if there's not next era hasn't come along yet.

[00:42:47] Speaker 03:
Maybe Chevron and Stillex say that this is non-colorable.

[00:42:50] Speaker 03:
And therefore, I'm just going to end.

[00:42:52] Speaker 03:
And India happens to have a couple more merits arguments.

[00:42:54] Speaker 03:
I'm sure there's other cases in which a foreign sovereign has many, many more merits arguments than that.

[00:42:58] Speaker 03:
But they would feel compelled to the threshold to include all of those.

[00:43:02] Speaker 03:
And I just wonder whether that's a healthy.

[00:43:04] Speaker 03:
incentive dynamic.

[00:43:06] Speaker 02:
I mean, the foreign sovereign has the incentive to raise all of its colorable immunity arguments in its first brief.

[00:43:12] Speaker 02:
And it has the right to choose to raise merits arguments at the same time or not.

[00:43:17] Speaker 02:
So it cannot waive merits arguments if it raises only colorable immunity arguments.

[00:43:24] Speaker 02:
And so the policy and administrative angle that your question was approaching is better served by sending a message that

[00:43:34] Speaker 02:
If you're going to invoke the two-step process, pay attention to this circuit's precedent about what is an immunity objection and what is not.

[00:43:44] Speaker 02:
And that's a reason, that's still a low standard of colorability.

[00:43:48] Speaker 02:
A colorable argument, we admit, should have a low standard.

[00:43:52] Speaker 02:
But to have a decision that requires sovereigns to look at controlling precedent of the circuit as to where that line has been drawn,

[00:44:00] Speaker 03:
Suppose you have a situation with a circuit in which you are as an outlier.

[00:44:06] Speaker 03:
So you have panel precedent that, let's just say, clearly forecloses an argument.

[00:44:10] Speaker 03:
But then every other court of appeals, there's eight other courts of appeals that are pronounced on the question and disagree.

[00:44:17] Speaker 03:
Would you say that the argument is non-colorable, and therefore all the merits arguments have to be included?

[00:44:22] Speaker 03:
Because in this circuit, the law points in a particular discretion.

[00:44:25] Speaker 03:
And it's clear.

[00:44:26] Speaker 03:
In this circuit, it's only panel precedents.

[00:44:28] Speaker 03:
The panel president's point.

[00:44:30] Speaker 02:
I would say it's colorable immunity.

[00:44:32] Speaker 02:
And I've never said they have to include merits arguments with a colorable immunity.

[00:44:36] Speaker 02:
A sovereign has a right to make that choice.

[00:44:39] Speaker 02:
A sovereign has a right, though, to a threshold determination of immunity.

[00:44:43] Speaker 02:
So if you had eight other circuits, that would be colorable.

[00:44:46] Speaker 02:
But once the sovereign brings in what are clearly merits defenses, it has waived its right to a second round of briefing.

[00:44:56] Speaker 02:
That's the only conclusion.

[00:44:58] Speaker 02:
for which we're advocating, that they've essentially briefed all of the merits defenses.

[00:45:03] Speaker 02:
And the judge was entitled to rule on them.

[00:45:06] Speaker 02:
And this gets us into sort of the, the judge was entitled or obligated under the law because of the uncentral rules and that the parties delegated the intent to decide issues of archivability to the arbitrators.

[00:45:22] Speaker 02:
And my colleague said that the judge did not consider the intent

[00:45:29] Speaker 02:
The district court looked at the uncentral rules.

[00:45:35] Speaker 02:
He construed the treaties of contract.

[00:45:38] Speaker 02:
And he considered their extrinsic evidence.

[00:45:41] Speaker 02:
And he said, even if it were proper for me to consider that extrinsic evidence, it doesn't override the language in the contract that has the uncentral rules in the delegation.

[00:45:52] Speaker 02:
And as for the background law of India,

[00:45:58] Speaker 02:
requiring de novo review.

[00:46:00] Speaker 02:
They did get de novo review of the arbitrator's decision by the Swiss Federal Supreme Court.

[00:46:06] Speaker 02:
And there is no proposition of law that requires a court of secondary jurisdiction like a district court sitting as a court of secondary jurisdiction in a convention case to follow Indian law.

[00:46:19] Speaker 02:
Rather, it has to follow the Supreme Court.

[00:46:22] Speaker 02:
And look to the fact that the uncentral rules delegated these questions to the arbitrators.

[00:46:28] Speaker 02:
And on page 25 of our brief, we cite a number of cases that require the district court to defer to the judgment of the court of primary jurisdiction that scrutinized the award, especially if they vacate the award.

[00:46:46] Speaker 02:
Well, if the court of the seat confirms an award, it should be at least entitled to the same degree of deference as when it vacates.

[00:46:52] Speaker 02:
And that's what happened here.

[00:46:54] Speaker 02:
All of these issues have been aired.

[00:46:57] Speaker 05:
The district court's rationale on the merits, looking past immunity to the merits, was that

[00:47:09] Speaker 05:
Arbitrability was assigned to the arbitrator through the incorporation of Ansa trial.

[00:47:17] Speaker 05:
And for that reason, the district court couldn't review.

[00:47:21] Speaker 05:
Right.

[00:47:21] Speaker 05:
Couldn't review the decision.

[00:47:23] Speaker 05:
That's different from the alternative that you just floated, which is the district court can't or shouldn't

[00:47:32] Speaker 05:
review arbitrability because a Swiss court has decided.

[00:47:36] Speaker 02:
Yes, that's different.

[00:47:37] Speaker 02:
Those are two distinct lines.

[00:47:38] Speaker 05:
Those are two distinct lines.

[00:47:39] Speaker 05:
The second one raises all sorts of questions about the issue preclusive effect of foreign judgments, which the district court didn't get into, potentially messy.

[00:47:52] Speaker 05:
I would think that one

[00:47:55] Speaker 05:
is a little uncomfortable as an alternative and you need not reach it because the district court was go back to.

[00:48:02] Speaker 05:
Yeah, that's what I thought.

[00:48:03] Speaker 05:
So that takes us back to is the issue off the table by virtue of.

[00:48:11] Speaker 05:
Incorporation of onset trial rules and you have precedent.

[00:48:16] Speaker 05:
You have some good precedent, no doubt.

[00:48:19] Speaker 05:
But.

[00:48:21] Speaker 05:
This contract seems to provide for Indian enforcement law to govern enforcement questions.

[00:48:36] Speaker 05:
And if it is the case that Indian enforcement law has this model that arbitrators decide arbitrability questions and then there's judicial review, why don't we follow Indian law per the contract?

[00:48:51] Speaker 02:
Well, I would say they did get the judicial review that they agreed, Deutsche Telekom in India agreed on the seat of arbitration in Switzerland where the law is that the Swiss Federal Supreme Court reviews questions of arbitrability de novo.

[00:49:13] Speaker 02:
They don't have a BG, I mean, first options.

[00:49:18] Speaker 02:
And this court,

[00:49:19] Speaker 02:
One, we disagree with their contractual interpretation as in the brief.

[00:49:22] Speaker 02:
But this court, the Indian law does not so clearly override the evidence of intent.

[00:49:35] Speaker 02:
And Judge Leon, at the district court level, took it into account.

[00:49:39] Speaker 02:
He referred to it as extrinsic evidence.

[00:49:42] Speaker 02:
And he said it didn't override.

[00:49:44] Speaker 02:
That's a factual finding that you would need to find was clear error.

[00:49:48] Speaker 02:
And then there was a lack of intent to refer questions of arbitrability to the arbitrators.

[00:49:57] Speaker 02:
Because he did look at India's evidence and said, even if I were allowed to take in all of this extrinsic evidence,

[00:50:03] Speaker 02:
It doesn't outweigh.

[00:50:06] Speaker 05:
I'm not sure why it's extrinsic evidence.

[00:50:09] Speaker 05:
We're construing the bit and one provision incorporates on to trial, which cuts in your favor.

[00:50:15] Speaker 05:
The other provision says apply Indian enforcement law, which comes in their favor.

[00:50:20] Speaker 02:
And this is an interpreted dispute about.

[00:50:23] Speaker 02:
So let's look at the bit and what it says, because it doesn't say apply Indian law to enforcement.

[00:50:29] Speaker 02:
Maybe you have a clause in mind.

[00:50:31] Speaker 05:
Arbitration should be enforced in accordance with national laws of the party where the investment was made.

[00:50:38] Speaker 05:
And like their argument that enforcement can only happen in India, I completely disagree with.

[00:50:49] Speaker 05:
But their narrower argument that Indian enforcement law governs enforcement wherever enforcement happens seems

[00:51:03] Speaker 02:
on a few things, but seems at least color.

[00:51:06] Speaker 02:
Well, first of all, it was waived because it was never made to the district court.

[00:51:10] Speaker 02:
And all they raised in front of the district court were merits defenses.

[00:51:14] Speaker 02:
So second, in our opposition to their motion to dismiss, and I don't have the page references in my head, but we explain what this clause means.

[00:51:29] Speaker 02:
It may also be in,

[00:51:31] Speaker 02:
But there are authorities that explain that this is a guarantee that states will not change their laws when it comes to enforcement.

[00:51:46] Speaker 05:
You say it is uniquely addressed to India and prohibits India from imposing distinct

[00:51:56] Speaker 05:
enforcement.

[00:51:56] Speaker 05:
Like they can apply their generally applicable law of arbitral enforcement.

[00:52:01] Speaker 05:
Right.

[00:52:01] Speaker 05:
They can't target this.

[00:52:03] Speaker 05:
Exactly.

[00:52:04] Speaker 05:
It reads more broadly though.

[00:52:09] Speaker 05:
The award shall be enforced in accordance with the national laws of India.

[00:52:13] Speaker 02:
Where the investment has been made.

[00:52:16] Speaker 02:
Right.

[00:52:16] Speaker 02:
Which here is India.

[00:52:23] Speaker 02:
Right.

[00:52:26] Speaker 02:
was in the opposition to the motion to dismiss, there are authorities that look at provisions similar to this that say that this type of phrase, what it means is that a state is promising not to change its laws to make enforcement more difficult.

[00:52:43] Speaker 02:
It cannot be that Germany and India have the power in a treaty to

[00:52:53] Speaker 02:
impose upon the United States District Court, acting as a court of secondary jurisdiction, a standard of review.

[00:53:01] Speaker 02:
That court must comply with the laws of the United States.

[00:53:06] Speaker 05:
I mean, I understand why you say that.

[00:53:16] Speaker 02:
And we're not, the word shall be enforced.

[00:53:20] Speaker 02:
In accordance with laws, let's assume Indian law does require de novo review.

[00:53:25] Speaker 02:
They obtained a de novo review at the Swiss Federal Supreme Court.

[00:53:28] Speaker 02:
We sought confirmation and recognition.

[00:53:31] Speaker 02:
That's not enforcement.

[00:53:32] Speaker 03:
Suppose that the agreement actually forecast everything that's come to pass.

[00:53:37] Speaker 03:
And suppose that the agreement, the provision actually spoke clearly to this and just said,

[00:53:42] Speaker 03:
the arbitrator's determination shall not be final.

[00:53:46] Speaker 03:
And a court of judicial review in any other country shall, of course, under the principle of competence, spell it out, shall have authority to review that determination.

[00:53:58] Speaker 03:
Then are you saying that that wouldn't be operative here?

[00:54:04] Speaker 02:
I think a court could choose.

[00:54:07] Speaker 02:
Two sovereign states.

[00:54:09] Speaker 02:
cannot contract and affect a Kurtz jurisdiction to other foreign sovereign states.

[00:54:16] Speaker 02:
No more than two private contracting parties.

[00:54:19] Speaker 03:
No, but on the question of whether the arbitrator determination is final and conclusive and can't be reviewed by another court by a court.

[00:54:27] Speaker 02:
If it said it's not final conclusive, then it probably wouldn't be a convention award.

[00:54:32] Speaker 02:
Because the convention, I think you have to have a final award or it couldn't fit under the FAA.

[00:54:38] Speaker 02:
It's not final in binding.

[00:54:39] Speaker 05:
It's final conclusively resolved by the arbitrator and then subject to judicial.

[00:54:46] Speaker 02:
Denovo.

[00:54:48] Speaker 03:
I mean, it might be Denovo or it might be for reasonable.

[00:54:51] Speaker 03:
With regards to the standard, I mean, I think because what the district court said and understandably in light of the language in some decisions said is that because the on central provision

[00:55:01] Speaker 03:
provides for the arbitrator to decide arbitrability, then the incorporation of that provision means that not only the arbitrator gets to decide it, but that the arbitrator's decision of it is preclusive of any judicial review.

[00:55:11] Speaker 03:
And all I'm saying is, suppose you have a contract that just says, no, under this agreement isn't intended to do that.

[00:55:17] Speaker 03:
What this agreement is intended to do is to preserve judicial review.

[00:55:21] Speaker 02:
If you had a contract that said, no, we intend to preserve judicial review of issues of arbitrability, then

[00:55:30] Speaker 02:
that there would not have been an intent to delegate those issues.

[00:55:33] Speaker 03:
Because I thought some of the arguments you were making was that a US court would never have the ability to give effect to such a provision.

[00:55:41] Speaker 02:
I had understood your question to mean more to be broader than on arbitrability, because the presumption is that courts review arbitrability, and first option is an exception.

[00:55:52] Speaker 02:
What you're saying here, and was getting at, that the law of India, two contracting parties cannot expand the scope of

[00:56:00] Speaker 02:
the federal court's authority.

[00:56:01] Speaker 02:
But they can, of course, if it's evidence of intent on the question of arbitrability, that needs to be taken into account.

[00:56:10] Speaker 05:
Let me try it this way.

[00:56:13] Speaker 05:
Do private parties have the power to contract for an arbitration scheme

[00:56:24] Speaker 05:
where the arbitrator decides arbitrability in the first instance, and then enforcement courts review those decisions?

[00:56:37] Speaker 02:
Yes.

[00:56:39] Speaker 05:
Okay, so then we're just talking about whether this clause... Overrides the reference to the uncentral.

[00:56:45] Speaker 05:
Accomplishes that, notwithstanding the reference to the uncentral.

[00:56:49] Speaker 02:
Right, and the district court found that it did not.

[00:56:53] Speaker 02:
And I think it.

[00:56:54] Speaker 03:
I don't know that the district court found that it did not.

[00:56:58] Speaker 03:
I think the district court talked under the language of some of our decisions.

[00:57:01] Speaker 03:
The mere incorporation of the answer trial means that everybody is off.

[00:57:08] Speaker 02:
Respectfully, I'll quote from the district court at page 8.

[00:57:11] Speaker 02:
It says, while India purports to offer extra contractual evidence, and I take your point, that would be contractual evidence.

[00:57:18] Speaker 02:
So I'm not relying on that.

[00:57:23] Speaker 02:
consider this language part of he says is even assuming would be proper to consider it's sufficient to overcome the clear and unmistakable evidence found in the bits incorporation of the ancestral rules here.

[00:57:36] Speaker 03:
It's just the incorporation of the ancestral rules.

[00:57:39] Speaker 03:
He just he thought and I'm not saying that there's not support for that proposition there is but he just thought that that was that was the end of the matter.

[00:57:47] Speaker 02:
He thought that that clause wasn't enough to override the clear and unmistakable evidence found in the BITS incorporation of the uncentral rules.

[00:57:58] Speaker 02:
So he did consider it.

[00:57:59] Speaker 02:
He didn't ignore it.

[00:58:00] Speaker 02:
We agree with him that that second sentence isn't sufficient to override the reference to the uncentral rules.

[00:58:11] Speaker 02:
And also, we have other evidence of the party's intent is when they chose Switzerland.

[00:58:17] Speaker 02:
And they got de novo review of all these issues in Switzerland.

[00:58:23] Speaker 02:
And this court, the district court, is simply applying US procedural law.

[00:58:31] Speaker 02:
What does US law require me to do when I'm sitting as a court of secondary jurisdiction?

[00:58:35] Speaker 02:
I defer to the arbitrators.

[00:58:41] Speaker 02:
And I'm going to go back to our cases on page 25.

[00:58:43] Speaker 02:
There are, and I'm not invoking these as race judicata, but simply there is a public policy in the United States of recognizing arbitration awards.

[00:58:53] Speaker 02:
And there's a consistent line of cases that say we give significance to the court to rulings of the court at the seat in terms of vacatur.

[00:59:04] Speaker 02:
Our point is confirmation is at least as worthy of the same dignity as if a court had vacated.

[00:59:10] Speaker 05:
Did the Swiss court air in reviewing the arbitrability question, Stanova?

[00:59:19] Speaker 02:
No, that's Swiss law.

[00:59:22] Speaker 02:
That's well-established Swiss law that was known when the parties chose Switzerland as the seat of arbitration.

[00:59:32] Speaker 05:
So then this whole thing, this whole question comes down to the difference between

[00:59:38] Speaker 05:
the law of the seat of the arbitration and the law of a secondary and fourth court.

[00:59:46] Speaker 05:
It doesn't come down to the line between arbitrators and courts.

[00:59:53] Speaker 02:
That's right.

[00:59:53] Speaker 02:
District courts seem to think.

[00:59:55] Speaker 02:
Right.

[00:59:56] Speaker 02:
And the law in Germany required to know the review.

[01:00:00] Speaker 01:
Sorry, counsel.

[01:00:02] Speaker 01:
Continue.

[01:00:02] Speaker 02:
No, I apologize.

[01:00:04] Speaker 02:
Your question is more important.

[01:00:06] Speaker 01:
Well, I think

[01:00:08] Speaker 01:
The judge would like to hear your answer.

[01:00:12] Speaker 02:
I'm sorry.

[01:00:12] Speaker 02:
I'm sorry.

[01:00:13] Speaker 02:
OK.

[01:00:14] Speaker 02:
The law in Germany required de novo review of these questions.

[01:00:19] Speaker 02:
And the Kammergericht considered investor an investment and agreed with the Swiss Federal Court in the Arbitral Tribunal.

[01:00:25] Speaker 02:
The law in Singapore required de novo review.

[01:00:28] Speaker 05:
So if that's true, then this sentence read in light of those.

[01:00:35] Speaker 05:
You have to read this sentence to mean

[01:00:38] Speaker 05:
Arbitrator decides arbitrability.

[01:00:45] Speaker 05:
Swiss court gets to review those questions de novo, but no other enforcement court can.

[01:00:53] Speaker 05:
Right.

[01:00:57] Speaker 05:
That does not come from BG or Chevron or any of those cases.

[01:01:02] Speaker 05:
It sounds plausible.

[01:01:04] Speaker 05:
I'm just not sure where it comes from.

[01:01:09] Speaker 01:
I was about to suggest that I think, this is just my opinion, that a lot of American courts are uncomfortable with arbitration.

[01:01:20] Speaker 01:
All right?

[01:01:20] Speaker 01:
And that what was contemplated was that these sovereigns who have a lot of experience, a lot of legal talent available to them, make these decisions to arbitrate because of the incredible financial awards.

[01:01:38] Speaker 01:
And the only way they get these awards is not to have these matters bogged down for 20 years in the Indian courts or elsewhere.

[01:01:51] Speaker 01:
So now we have two sovereigns.

[01:01:55] Speaker 01:
They enter into an agreement to arbitrate.

[01:01:58] Speaker 01:
They've chosen the court, but they want to review any questions.

[01:02:03] Speaker 01:
They've been there not once.

[01:02:05] Speaker 01:
They've been there twice.

[01:02:08] Speaker 01:
and the Swiss court has ruled.

[01:02:10] Speaker 01:
And so now what's left for what we're calling the court of secondary jurisdiction.

[01:02:18] Speaker 01:
And this court has issued a lot of very strong opinions saying we're out of it, basically.

[01:02:27] Speaker 01:
And we've fooled around with what does arbitrability mean?

[01:02:33] Speaker 01:
How broad is that term to be interpreted?

[01:02:37] Speaker 01:
And maybe we're going to switch to a different arbitration system than was described in BG versus Argentina and subsequently by the Supreme Court.

[01:02:53] Speaker 01:
But that's what's so troubling, that this is not the normal way that things go.

[01:02:58] Speaker 01:
And what we don't trust sovereigns to make these decisions in their own

[01:03:07] Speaker 01:
interest, and therefore, this enforcement role of the secondary court is very limited.

[01:03:16] Speaker 01:
We don't start all over again.

[01:03:18] Speaker 01:
Now, maybe all that's going to change.

[01:03:21] Speaker 01:
And we'll see what position the Justice Department starts taking in these cases.

[01:03:32] Speaker 01:
But that's why it's very troubling to me

[01:03:37] Speaker 01:
that we've had all these proceedings been twice to the court that the parties chose.

[01:03:47] Speaker 01:
And now basically what I read the district court as saying is that the DC circuit has made it very clear what its position is on a lot of these issues.

[01:04:01] Speaker 01:
And basically there's a very limited role

[01:04:06] Speaker 01:
for the enforcement court.

[01:04:07] Speaker 01:
It has to find three things.

[01:04:09] Speaker 01:
If it finds those three things, its role is done other than issuing the orders and moving forth on, you know, even the award goes back overseas in this case.

[01:04:27] Speaker 01:
So that's what's troubling to me here.

[01:04:31] Speaker 01:
And if we're going to rewrite this whole scheme, fine.

[01:04:34] Speaker 01:
But we have to be clear that is what we are doing.

[01:04:41] Speaker 02:
Your honor effectively encapsulated our position.

[01:04:43] Speaker 02:
There's no proposition for de novo review by every court where confirmation and recognition are sought.

[01:04:56] Speaker 02:
States are free.

[01:04:57] Speaker 01:
You heard counsel for India say, though,

[01:05:00] Speaker 01:
They had not had the opportunity to raise these merit defenses.

[01:05:03] Speaker 01:
And your response is, well, they raise some.

[01:05:07] Speaker 01:
And the law is you get a chance to raise merits defenses.

[01:05:13] Speaker 01:
And those you don't raise, you forfeit.

[01:05:16] Speaker 01:
And that's what happened here.

[01:05:17] Speaker 01:
And there's a comfortable feeling about immunity that necessarily our court has.

[01:05:30] Speaker 01:
And that's what I hear coming up in all these questions.

[01:05:35] Speaker 01:
Maybe I misunderstand my colleagues' concerns, but that's just one view.

[01:05:43] Speaker 01:
And so what's your best answer to satisfy what I'm identifying as a level of discomfort here with the system that the Supreme Court has endorsed, that Congress has endorsed in several actions

[01:05:59] Speaker 01:
And now this court has repeatedly endorsed.

[01:06:03] Speaker 02:
And if such a level of discomfort exists, this is the wrong case to address it.

[01:06:09] Speaker 02:
India has litigated all of its objections before the Arbitral Tribunal for the Swiss Federal Supreme Court.

[01:06:23] Speaker 02:
They were briefed before this court.

[01:06:25] Speaker 02:
They went before the district's court and asked for a stay to go back to Switzerland with supposedly evidence that would result in vacatur and would render in the district court, they said, could render it moot.

[01:06:40] Speaker 02:
He let them go, stayed for a year.

[01:06:42] Speaker 02:
Swiss Federal Supreme Court said, no, we're not going to vacate.

[01:06:48] Speaker 02:
Those are the same facts about illegality that you knew during the arbitration.

[01:06:53] Speaker 02:
And they found you wave.

[01:06:55] Speaker 02:
They tried the same argument this Singapore commercial court all of these same arguments.

[01:07:01] Speaker 02:
Justice race rates.

[01:07:04] Speaker 02:
Wonderful decision analyzing each of them to know about the Singapore Court of Appeals analyze all of these questions in the.

[01:07:11] Speaker 02:
They have had five opportunities.

[01:07:14] Speaker 03:
Let me just ask maybe one last question, which is just to make sure I'm understanding your arguments about waiving merits issues.

[01:07:21] Speaker 03:
If we think that the arguments that India presented as jurisdictional arguments are colorable jurisdiction arguments, but we agree with you that they actually ultimately don't go to jurisdiction, they go to scope.

[01:07:37] Speaker 03:
But let's suppose we think

[01:07:39] Speaker 03:
that they're colorable, then you don't say that if that's true, India waived its ability to present the merits arguments that aren't wrapped up in jurisdiction at all that the district court just didn't pronounce on