Preble-Rish Haiti, S.A. v. Republic of Haiti

Background

Preble-Rish Haiti, S.A. (PRH) supplied fuel under contracts with the Bureau de Monétisation des Programmes d’Aide au Développment (BMPAD), a Haitian agency charged with ordering petroleum products on behalf of the Republic of Haiti (ROH). BMPAD took possession of some of the fuel but did not pay PRH. PRH stopped shipments and pursued arbitration against ROH and BMPAD under the contracts’ arbitration clauses.

A New York state court denied ROH and BMPAD’s request to stop the arbitration and granted PRH’s request to compel arbitration. The Appellate Division affirmed that decision. The arbitration panel later issued a Final Award finding that PRH was entitled to recover $28,184,756.65 from the respondents. On June 29, 2023, this Court confirmed the award, and a Final Judgment was entered on July 20, 2023. ROH appealed and moved to stay enforcement of the judgment during the appeal.

Motion to Stay Pending Appeal

A stay pending appeal is a court order temporarily pausing enforcement while an appeal is considered. The court evaluated four factors: whether ROH made a strong showing that it was likely to succeed, whether it would suffer irreparable harm without a stay, whether a stay would substantially injure PRH, and whether the public interest supported a stay.

Likelihood of Success

The court concluded that ROH had not made the required strong showing. ROH primarily argued that it was not a party to the contracts and therefore could not be bound by the arbitration. The court held that this argument was precluded by the earlier New York state-court proceeding. ROH had initiated that proceeding and had the opportunity there to challenge whether it was bound to arbitrate. The state court denied ROH’s request to stop arbitration, compelled arbitration against ROH, and was affirmed on appeal.

The court distinguished ROH’s argument from a later challenge that an arbitration panel exceeded the scope of an arbitration agreement. In this case, the court said ROH was arguing that no valid arbitration agreement existed as to ROH because ROH was not a contract party. The court held that this position had been foreclosed by the earlier proceeding.

The court also rejected ROH’s contention that its counsel in the state proceeding was unauthorized. It stated that this Court—not the state court—had given preclusive effect to the state-court order.

The court further rejected ROH’s challenge to service under the Foreign Sovereign Immunities Act. It held that contract provisions requiring all correspondence between the parties to be sent to BMPAD’s executive director by email constituted a special arrangement for service of process. The court also stated that it had previously determined, on the merits, that ROH waived its foreign-sovereign immunity.

Irreparable Harm and Other Factors

The court held that ROH had not shown irreparable harm. It treated the asserted injury—the requirement to pay the money judgment—as economic harm that generally can be addressed through money. The court found ROH’s concern that it might have difficulty recovering the money if it won its appeal insufficient to create an exception to that general rule.

For similar reasons, the court found little likelihood of substantial injury to PRH from not granting a stay because PRH’s injury was also economic and could still be addressed after a successful appeal. The court acknowledged that considerations of respect for foreign sovereigns may be relevant when enforcing a judgment against one, but held that ROH had not shown that the public-interest factor favored a stay.

Disposition

Judge P. Castel’s order states that ROH’s motion for a stay pending appeal is DENIED. The court separately GRANT[ED] a temporary, fourteen-day administrative stay of enforcement against ROH to allow ROH to apply to the federal appeals court for a stay. The order stated that this temporary ruling did not affect ROH’s ability to seek a stay by providing a bond or other security.