## Facts

- COMMISA, a Mexican contractor, entered contracts with PEP, a Mexican state-owned oil subsidiary, to build and service offshore platforms; the contracts required ICC arbitration seated in Mexico City and allowed PEP “administrative rescission” for alleged breach.
- In 2004, PEP issued an administrative rescission notice; COMMISA denied breach and commenced ICC arbitration.
- In 2009, the tribunal issued a final award for COMMISA of roughly $300 million plus interest and costs, finding PEP wrongfully rescinded and breached the contracts.
- During the arbitration, Mexico enacted laws reallocating certain public-contract disputes to a tax court and limiting arbitrability of administrative rescission; Mexican courts applied these changes retroactively.
- After COMMISA sought U.S. confirmation, a Mexican appellate court annulled the award, reasoning the dispute was not arbitrable under the new legal regime.
- The U.S. proceedings were in the Southern District of New York, where PEP maintained a New York branch and used New York banking channels; PEP contested jurisdiction, venue, and the scope of any judgment, including amounts tied to performance bonds PEP had collected (about $106 million).

## Issues

1. Whether, under the Panama Convention and principles of comity, the court should refuse enforcement because the award was annulled by courts at the arbitral seat.
2. Whether giving effect to the Mexican annulment—grounded in retroactively applied legislation restricting arbitrability—would be contrary to U.S. public policy.
3. Whether the court had personal jurisdiction over PEP and whether venue in the Southern District of New York was proper.
4. Whether the judgment confirming the award could include amounts attributable to performance bonds PEP collected.

## Decision

- The court confirmed the arbitral award notwithstanding the Mexican annulment.
- The court declined to extend comity to the Mexican annulment decision because enforcing it would be repugnant to fundamental U.S. notions of fairness and due process.
- The court rejected PEP’s objections to personal jurisdiction and venue based on PEP’s New York presence and related financial activity.
- The court included approximately $106 million associated with performance bonds in the confirming judgment as part of implementing the award’s monetary effect.

## Legal Principles

- Under the Panama Convention, an enforcing court has discretion to recognize and enforce an award even if it has been set aside at the seat; set-aside is a permissive, not mandatory, ground for refusal.
- Comity to foreign judgments may be denied where recognition would violate U.S. public policy, including where retroactive legal changes deprive a party of the arbitral forum promised by contract and eliminate meaningful recourse.
- The public-policy threshold is high and focuses on whether recognition would be repugnant to fundamental notions of what is decent and just in the United States.
- A confirmation judgment may capture the full monetary consequences determined by arbitrators (including amounts tied to called bonds) so long as the court does not alter the substance of the award.
- Personal jurisdiction and venue can rest on purposeful, suit-related contacts with the forum, including maintaining an in-forum business presence and using in-forum banking channels connected to the dispute or enforcement.

## Conclusion

The court enforced an ICC award against a Mexican state-owned entity despite a subsequent Mexican annulment because the annulment rested on retroactively applied restrictions that undermined the parties’ arbitration agreement and offended U.S. public policy; it also upheld jurisdiction and entered a judgment reflecting the award’s full economic effect, including performance-bond amounts.


Corporación Mexicana de Mantenimiento Integral, S. de R.L. de C.V. v. Pemex-Exploración y Producción, 962 F. Supp. 2d 642 (S.D.N.Y. 2013)