November 17, 2023
The Second Circuit today granted the firm’s motion, on behalf of its client the Republic of Haiti, for a stay pending appeal of a $31 million judgment confirming an arbitration award against the Republic.
Following a tangled history that included a law firm mistakenly claiming to represent the Republic in New York state court and in the arbitration when it was never retained or authorized to do so, the district court granted the petition to confirm the arbitrators’ ruling that the Republic’s co-respondent had breached several contracts for the delivery of petroleum products. Schlam Stone was later retained to oppose confirmation of the arbitration award. In their successful stay motion, Partners Elizabeth Wolstein and Sam Butt laid out the district court’s errors in failing to dismiss the petition to confirm for lack of subject matter jurisdiction under the Foreign Sovereign Immunities Act, and in failing to vacate the arbitration award for lack of arbitrability against the Republic, which was not a party to the arbitration agreement. The stay motion required demonstrating the district court’s error in applying res judicata to a state court’s order denying the prior law firm’s motion to stay the arbitration, which under the applicable rules of preclusion can have no preclusive on either the Republic’s motion to dismiss or its motion to vacate the arbitration award.