USA Trends and Developments Contributed by: Matthew Kirtland, Denton Nichols and Courtney Hikawa, Norton Rose Fulbright US LLP
in the case of the Energy Charter Treaty that Spain had signed and ratified (ibid, 1103 (DC Cir. 2024)). This decision, and the Supreme Court’s denial of further review, unleashed a wave of pending intra- EU award confirmations at the first-instance court level in DC against Spain and other EU member states, thereby cementing the US as a destination for EU investors holding awards that are unen - forceable within the European Union. • The DC Circuit delivered a similarly pro-arbitration decision in Zhongshan Fucheng Industrial Invest- ment Co . Ltd . v Federal Republic of Nigeria (2024). There, a Chinese investor sought to enforce an arbitration award against Nigeria arising from a bilateral investment treaty (BIT). Nigeria argued that the New York Convention did not apply to the award – and therefore the FSIA’s arbitration excep - tion could not strip it of its sovereign immunity – because the relationship created by an investment treaty between a sovereign state and a private foreign investor is not “commercial” in nature ( Zhongshan Fucheng Indus . Inv . Co . LTD v Fed . Republic of Nigeria , 112 F.4th 1054, 1064 (DC Cir. 2024)). The DC Circuit rejected this argument, hold - ing that the New York Convention’s requirement of a “commercial relationship” is met whenever the investment treaty containing the government’s standing offer to arbitrate with private investors is “connected with commerce”. This ruling confirms that investment treaty awards do indeed fall within the scope of the New York Convention, further rein - forcing the availability of US courts for enforcing such awards against sovereign parties. • The years-long award enforcement case of Micula v Romania has demonstrated that US courts may penalise sovereigns’ non-compliance with judicial orders even after an award is confirmed. In that case, Swedish investors for years had attempted to collect on an investment treaty arbitration award that they successfully confirmed in the DC District Court. After Romania refused to comply with post-judgment discovery requests regard - ing its assets, the Court held the country in civil contempt and imposed weekly fines until Romania complied Micula v . Gov ’ t of Romania , No. 17-CV- 02332 (APM), 2020 WL 6822695, at *7 (D.DC 20 November 2020). Crucially, the court ruled that the FSIA does not abrogate a federal court’s inherent
power to impose monetary contempt sanctions on a foreign state. This contempt order was affirmed in 2022 on appeal to the DC Circuit ( Micula v Gov ’ t of Romania , No. 20-7116, 2022 WL 2281645, at *2 (DC Cir. 24 June 2022)). Taken together, these recent rulings reinforce the United States’ position as one of the world’s most effective places to attempt to enforce arbitral awards against sovereign parties, offering award holders broad access to US courts, stern remedies when gov - ernments refuse to comply with discovery, and judges who strictly construe sovereign immunity defences in the arbitration context. International Investment Agreements and Investor– State Dispute Settlement The policy of the United States toward Internation - al Investment Agreements (IIAs) and Investor–State Dispute Settlement (ISDS) has undergone a profound shift over the last two decades of successive presi - dential administrations, evolving from robust promo - tion to profound scepticism. The high-water mark of US IIA advocacy receded after the end of the George W Bush administration, with the US’s last IIA having been signed in 2008 (Treaty Concerning the Encour - agement and Reciprocal Protection of Investment, US–Rwanda, 19 February 2008, S. Treaty Doc. No. 110-23). Ever since the Obama administration came to power in 2009, the US government has largely stalled in pur - suing new IIAs. As a result, the US’s model BIT, last revamped in 2012, has effectively been mothballed. This policy pivot crystallised definitively during the first Trump administration with the 2018 negotiation of the United States–Mexico–Canada Agreement (USMCA). That agreement, which replaced the Clinton-era North American Free Trade Agreement (NAFTA), eliminated investor–state arbitration between the US and Cana - da, and restricted its scope with respect to Mexico, limiting investor claims to specified grounds like direct expropriation or specific covered sectors like energy and telecommunications. The Biden administration did not advance the cause of IIAs or ISDS, either. On the contrary, in January
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