April 2023 – Chaffetz Lindsey has submitted an amicus brief to the United States Supreme Court on behalf of amicus curiae Professor George A. Bermann in Yegiazaran v. Smagin, Case Nos. 22-381 & 22-383 (U.S.), a petition on writs of certiorari to the United States Court of Appeals for the Ninth Circuit addressing the use of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961-68, as a tool to enforce an international arbitral award against an award debtor allegedly engaging in prohibited racketeering activity to avoid effective execution of an international arbitral award that was recognized and enforced in the United States.
In Smagin, the Ninth Circuit confirmed that a foreign-domiciled award creditor deprived of the effective execution of a United States judgment recognizing and enforcing a foreign arbitral award in the United States could meet the “domestic injury” requirement for standing under RICO per the Supreme Court’s decision in RJR Nabisco v. European Community, 136 S. Ct. 2090 (2016). The Petitioners—the award debtor and CMB Monaco, an alleged participant in the RICO scheme—urged the court to reverse and find that foreign domiciliaries lacked standing to bring such claims. Chaffetz Lindsey and Prof. Bermann, the Director of the Center for International Commercial and Investment Arbitration at Columbia Law School and Chief Reporter for the Restatement (Third) of the U.S. Law of International Commercial and Investor-State Arbitration, urged the court to affirm, explaining the Petitioners’ argument relied on outdated and inapposite choice of law principles regarding the situs of injury in tort claims and that the use of RICO to ensure effective execution of international awards enforced in the United States is consistent with the United States’ obligations under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
The brief stressed that the place of the alleged injury in such a case is localized in the United States, and that treating the domicile of the award creditor as dispositive in determining the place of injury would lead to absurd and untenable results.
The Chaffetz Lindsey team on the brief included Andreas Frischknecht, James Hosking, and David S. Blackman, all of whom are active members of the international arbitration community in New York. Chaffetz Lindsey will continue to be active in both monitoring and shaping this important area of law as it develops.
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