Bridas SAPIC v. Government of Turkmenistan
United States Court of Appeals for the Fifth Circuit
447 F.3d 411 (2006)
- Written by Mary Katherine Cunningham, JD
Facts
In February 1993, Bridas SAPIC (Bridas) (plaintiff) entered a joint venture agreement (JVA) with Turkmenneft, a production association owned by the Government of Turkmenistan (Government) (defendant). The JVA only identified Bridas and the “Turkmenian Party” as the parties to the JVA, and the Government substituted various parties in for Turkmenian Party over time. The JVA created a joint venture entity to conduct hydrocarbon operations in southeastern Turkmenistan. The JVA contained a clause agreeing to refer any dispute arising out of the JVA to the arbitration under the Rules of the International Chamber of Commerce (ICC). Bridas asserted the Government ordered Bridas to suspend work in Turkmenistan, causing Bridas to initiate arbitration in April 1996. The Government argued it was not an appropriate party to the arbitration because it did not sign the JVA. The ICC Court of Arbitration stated the arbitrators would determine the tribunal’s jurisdiction over the Government. The arbitral tribunal held the arbitrators had jurisdiction to determine whether they had jurisdiction over the Government and that the Government was a proper party to the arbitration. The arbitrators later issued an award for Bridas. Bridas filed a lawsuit to confirm the award rendered against the Government. The Government filed a motion to vacate or modify the award. The district court denied the Government’s motion to vacate or modify the award, and the Government and Turkmenneft appealed to the Fifth Circuit. On appeal, the Government argued the JVA did not name the Government and lacked the ability to bind the Government to the terms of arbitration clause within the JVA. Bridas countered that the “Turkmenian Party” was always controlled by the Government and that the Government was bound to the terms of the JVA under the alter-ego doctrine.
Rule of Law
Issue
Holding and Reasoning (Jones, C.J.)
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