Leidos, Inc. v. Hellenic Republic, No. 17-7082 (D.C. Cir. Dec. 6, 2017) [click for opinion]

The case arises from an arbitration award won by Leidos, Inc. against the Hellenic Republic resulting from security work in the 2004 Summer Olympic Games. The July 2, 2013 award consisted of €39,818,298 in damages and $162,500 in costs. Leidos promptly petitioned the United States District Court for the District of Columbia to confirm and enforce promptly upon receiving the award.

After three years, on January 2, 2017, the district court confirmed the award and entered judgment in favor of Leidos for €39,818,298. Leidos moved to correct the judgment under Rule 60(a), or alter or amend the judgment under Rule 59(e), requesting $162,500 in costs, as well as pre- and post-judgment interest as to damages and costs, and requesting that the court alter or amend entry of judgment to convert the total award to U.S. dollars. The court granted Leidos’s motion, amending the judgment to include the costs, plus interest on costs and damages pursuant to Rule 60(a). The court also applied Rule 59(e) to convert the entire award to U.S. dollars. Due to the decline in value of the euro against the dollar between the original arbitration award and the date of the court’s judgment, the court’s conversion increased the value of the award by approximately $11.9 million.

On appeal, the D.C. Circuit reviewed the district court’s granting of Leidos’s 59(e) motion for abuse of discretion. The D.C. Circuit determined that the district court made two errors in granting Leidos’s motion: (1) it incorrectly determined that relevant precedent did not apply because Leidos was not a losing party, and (2) it erroneously concluded that it was manifestly unjust to award Leidos’s judgment in euros, despite Leidos seeking judgment in euros three times.

The D.C. Circuit noted that the district court erred in articulating the Rule 59(e) standard when it decided that because Leidos was not the losing party the prohibition on first asserting a previously available argument post-judgment did not apply. The D.C. Circuit rejected the distinction made by the district court between the ability of a successful party to make previously available arguments after judgment and the inability of a losing party to do the same.

The D.C. Circuit also determined that the judgment was consistent with governing law and that Leidos did not suffer any “manifest injustice” in receiving the relief it had explicitly and consistently requested. While the D.C. Circuit acknowledged that, historically, U.S. courts were reluctant to enter judgments in foreign currency, that trend shifted after Congress amended the Coinage Act in 1985, and an award in foreign currency is now considered appropriate if the petitioner has requested it. In fact, both Leidos and the Hellenic Republic acknowledged that the district court was permitted to enter judgment in euros. The court noted that Leidos requested judgment in euros three times to the district court, and that the harm in this case actually occurs to the Hellenic Republic, who had no opportunity to hedge against the risk of currency fluctuations.

The D.C. Circuit distinguished its ruling in Continental Transfert Technique Ltd. v. Fed. Gov’t of Nigeria. In that case Continental requested at summary judgment that the arbitral award be confirmed and enforced and converted to U.S. dollars. The district court confirmed and enforced, but failed to convert the award. Continental promptly filed a post-judgment motion, which the district court granted and the D.C. Circuit upheld. The D.C. Circuit noted that Continental had not specified the currency for the award in its complaint seeking enforcement and silence is not a request. On the other hand, Leidos explicitly requested its judgment in euros in its complaint and proposed orders. Further, since Leidos, unlike Continental, had not requested judgment in dollars at summary judgment, Rule 59(e) was available to Continental and not to Leidos, as it elected not to act until the final order was entered. For these reasons, the D.C. Circuit reversed the district court and remanded with instructions to enter judgment in accordance with the arbitral award.

A version of this post originally appeared in the March 2018 edition of Baker McKenzie’s International Litigation & Arbitration Newsletter, which is edited by David Zaslowsky and Grant Hanessian.

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