Marseille-Kliniken AG v. Republic of Equatorial Guinea

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 25, 2024 Decided September 23, 2025

No. 23-7169

MARSEILLE-KLINIKEN AG,

APPELLEE

v.

REPUBLIC OF EQUATORIAL GUINEA,

APPELLANT

Appeal from the United States District Court

for the District of Columbia

(No. 1:20-cv-03572)

Malik Havalic argued the cause for appellant. With him

on the briefs were Michael A. DeBernardis and Carter

Rosekrans. Shayda Vance entered an appearance.

Paul D. Schmitt argued the cause for appellee. With him

on the brief was Mary E. Gately.

Before: KATSAS, Circuit Judge, and GINSBURG and

RANDOLPH, Senior Circuit Judges.

Opinion for the Court filed by Circuit Judge KATSAS.

2

KATSAS, Circuit Judge: Marseille-Kliniken AG, a Swiss

company, obtained an arbitral award against the Republic of

Equatorial Guinea arising from a contractual dispute in that

country. In the arbitration, the parties contested whether the

dispute-resolution clause in the contract required Marseille-

Kliniken to exhaust local remedies in Equatoguinean courts

before proceeding to international arbitration in Switzerland.

The arbitral panel construed the clause not to require such

exhaustion.

Marseille-Kliniken moved to confirm the award in our

district court. The court held that the arbitration exception to

the Foreign Sovereign Immunities Act conferred jurisdiction

despite the parties’ dispute over the meaning of the arbitration

clause. On the merits, the court deferred to the arbitrators’

construction of the clause. We agree with the jurisdictional

ruling, but we disagree with the court’s deferential approach on

the merits.

I

A

The Foreign Sovereign Immunities Act (FSIA) makes

foreign sovereigns “immune from the jurisdiction of the courts

of the United States” unless a specific FSIA exception applies.

28 U.S.C. § 1604. One such exception covers petitions “to

confirm an award made pursuant to … an agreement to

arbitrate,” if “the agreement or award is or may be governed

by” a United States treaty “calling for the recognition and

enforcement of arbitral awards.” Id. § 1605(a)(6)(B).

A party seeking to confirm an arbitral award under this

exception bears the initial burden of production to show “three

jurisdictional facts”: (1) an agreement to arbitrate, (2) an

arbitral award, and (3) a treaty potentially governing its

3

enforcement. NextEra Energy Glob. Holdings B.V. v. Kingdom

of Spain, 112 F.4th 1088, 1100 (D.C. Cir. 2024) (quoting

Chevron Corp. v. Republic of Ecuador, 795 F.3d 200, 204 n.2

(D.C. Cir. 2015) (cleaned up)). If a private party satisfies this

burden, the foreign sovereign bears the burden of persuasion to

show that the arbitration exception does not apply. See id.

B

The Federal Arbitration Act (FAA) provides for the

confirmation of arbitral awards—that is, conversion of the

awards into enforceable legal judgments. LLC SPC Stileks v.

Republic of Moldova, 985 F.3d 871, 875 (D.C. Cir. 2021).

The FAA addresses enforcement of the United Nations

Convention on the Recognition and Enforcement of Foreign

Arbitral Awards, which is commonly known as the New York

Convention. See 9 U.S.C. §§ 201–08 (FAA); 21 U.S.T. 2517

(1958) (New York Convention). The Convention “is a

multilateral treaty that requires signatory nations like the

United States to honor the results of international arbitrations

that comply with the treaty.” Republic of Argentina v. AWG

Grp. Ltd., 894 F.3d 327, 332 (D.C. Cir. 2018). The Convention

governs the “enforcement of arbitral awards” made in another

sovereign state. N.Y. Convention art. I.1.

The FAA requires federal courts to confirm such awards

unless one of the grounds for refusal in the New York

Convention is present. 9 U.S.C. § 207. As relevant here, the

Convention permits a court to refuse enforcement if the award

addresses a dispute “not falling within the terms of the

submission to arbitration.” N.Y. Convention art. V.1(c). The

grounds for refusal “are tightly construed, and the burden is

placed on the party opposing enforcement.” Diag Hum. S.E. v.

Czech Republic – Ministry of Health, 907 F.3d 606, 609 (D.C.

Cir. 2018).

4

C

In 2009, Swiss healthcare provider Marseille-Kliniken AG

contracted with Equatorial Guinea to modernize and eventually

run a medical clinic in that country. At some point, the parties’

relationship soured. Equatorial Guinea claimed that Marseille-

Kliniken was unqualified to perform the necessary work.

Marseille-Kliniken responded that the state simply wanted to

renege on the contract. Regardless, all agree that Equatorial

Guinea refused to let the company run the clinic after it had

spent money and time modernizing it.

Marseille-Kliniken initiated arbitration in Switzerland.

The arbitrators ruled for the company and awarded damages.

The parties later settled this aspect of their dispute.

Marseille-Kliniken then initiated a second arbitration in

Switzerland to recover other damages. Equatorial Guinea

contested the arbitrators’ jurisdiction. It claimed that the

contract’s dispute-resolution clause barred the company from

proceeding to international arbitration without first seeking

relief in the Equatoguinean courts.

Like the rest of the agreement, the dispute-resolution

clause appears in both Spanish and German. The arbitrators

credited, and the parties accept, the following translations from

these languages:

Spanish Version German Version

In the event of disputes[,] the In the event a dispute should

Parties will meet and solve arise from this contract the

the problem amicably, Parties shall attempt to find

otherwise they will turn to an amicable solution prior to

the Court of Equatorial calling upon the Courts in

Guinea. If one of the parties Equatorial Guinea. In the

5

does not agree, the Court of event disputes should arise,

the Chamber of Commerce the Parties agree to engage in

in Zürich may be called Arbitration Proceedings

upon. before the Chamber of

Commerce in Zürich.

J.A. 102–03. Both translations state that the parties should first

attempt to resolve any disputes amicably. Both provide for

arbitration if a dispute cannot otherwise be resolved. And both

reference litigation in the Equatoguinean courts.

In contesting the arbitrators’ jurisdiction, Equatorial

Guinea invoked this contractual reference as well as

background principles of customary international law.

Typically, an entity wronged by a foreign sovereign must

pursue remedies in the sovereign’s domestic courts before

resorting to international arbitration. See Interhandel (Switz. v.

U.S.), 1959 I.C.J. 6, 27 (Mar. 21) (“The rule that local remedies

must be exhausted before international proceedings may be

instituted is a well-established rule of customary international

law.”); Restatement (Third) of the Foreign Relations Law of

the United States Part VII, intro. note & § 713 cmt. f (A.L.I.

1987) (Third Restatement); C. Dugan et al., Exhaustion of

Local Remedies, in Investor-State Arbitration 347–48 (2008)

(Dugan). Equatorial Guinea argued that the agreement

codified this background rule, requiring Marseille-Kliniken to

exhaust its remedies in Equatoguinean courts before resorting

to arbitration in Switzerland.

The arbitral panel rejected this jurisdictional objection. It

focused on the second sentence in the translations above. The

Spanish version provides for arbitration if one party “does not

agree.” J.A. 103. The German version provides for arbitration

if “disputes should arise.” Id. at 102. The panel found the

clause ambiguous on whether these terms refer to disagreement

6

with the merits of a decision by the Equatoguinean courts or

with sending a dispute to those courts at all. Id. at 105–06. The

panel concluded that the second interpretation “makes more

sense”—if a party disagrees with submitting the dispute to the

local courts, it may pursue international arbitration. See id. at

106. The arbitrators reasoned that, under Equatorial Guinea’s

interpretation, either a decision by its domestic courts would

preclude arbitration or there could be conflicting “enforceable

decisions in the same case.” Id. On the merits, the panel again

ruled for Marseille-Kliniken and awarded it over $9 million in

damages.

Marseille-Kliniken filed a petition to confirm the award in

our district court. The court held that it had subject-matter

jurisdiction under the FSIA’s arbitration exception. Marseille-

Kliniken AG v. Republic of Equatorial Guinea, No. 20-cv-

3572, 2023 WL 8005153, at *2 (D.D.C. Nov. 17, 2023). The

court then held that the Supreme Court’s decision in BG Group,

PLC v. Republic of Argentina, 572 U.S. 25 (2014), required it

to defer to the arbitrators’ interpretation of the dispute-

resolution clause. Under BG Group, we presume that the

parties to an arbitration agreement want courts to decide

questions of “arbitrability,” but want arbitrators to decide

questions regarding “procedural preconditions” for arbitration.

See id. at 33–35. The district court held that the dispute-

resolution clause here fell into the latter category, so it deferred

to the arbitrators’ construction of it and confirmed the award.

Marseille-Kliniken, 2023 WL 8005153, at *3.

Equatorial Guinea appealed.

II

Equatorial Guinea first argues that the district court lacked

subject-matter jurisdiction under the FSIA. We consider that

question de novo. See Stileks, 985 F.3d at 879. Recall that

7

Marseille-Kliniken bore the initial burden to produce evidence

regarding three jurisdictional elements: an arbitration

agreement, an arbitral award, and a potentially applicable

treaty. NextEra, 112 F.4th at 1100. It easily cleared that

hurdle. The company produced its agreement with Equatorial

Guinea, which contains the dispute-resolution clause, and the

Swiss arbitral award. It also argued that the New York

Convention governs because the company obtained its award

in Switzerland, a signatory country. In response, Equatorial

Guinea disputes only the first jurisdictional element—whether

the parties formed an agreement to arbitrate.

The FSIA requires “an agreement made by the foreign

state with or for the benefit of a private party to submit”

disputes to arbitration. 28 U.S.C. § 1605(a)(6). In assessing

whether this requirement is met, we focus on the “existence”

of an arbitration agreement, rather than on disputes about its

“scope.” NextEra, 112 F.4th at 1101. In other words, to

succeed in a jurisdictional challenge, “the sovereign must

attack the existence or validity of the arbitration agreement,”

not merely argue that it is inapplicable to a particular dispute.

Id.

Equatorial Guinea contends that the dispute-resolution

clause required Marseille-Kliniken to seek redress in its courts

before pursuing arbitration. The parties agree that any decision

in those courts would preclude arbitration of Marseille-

Kliniken’s claims for breach of contract. But that would not

have foreclosed arbitration altogether. As Equatorial Guinea

sees it, the losing party in the Equatoguinean courts could have

sought to arbitrate international-law claims for a denial of

justice. Under international law, a foreign investor may claim

that a sovereign’s domestic courts failed to afford it procedural

fairness. See Third Restatement § 711 cmt. a. In other words,

the denial-of-justice claim posited by Equatorial Guinea would

8

arise not from the merits of the underlying dispute, but from

how the Equatoguinean courts adjudicated it. So, Equatorial

Guinea’s argument about the dispute-resolution clause

concerns the scope of the arbitration agreement, not its

existence. It thus fails to defeat subject-matter jurisdiction.

Equatorial Guinea also argues that the dispute-resolution

clause is invalid because neither its law nor Swiss law allows

parties to submit disputes to arbitration in the first instance.

But arguments that an arbitration agreement violates domestic

law are merits defenses under the New York Convention—not

jurisdictional defenses under the FSIA. See NextEra, 112 F.4th

at 1103–04; New York Convention art. V.1(a).

III

On the merits, the district court held that BG Group

required it to defer to the arbitrators’ construction of the

dispute-resolution clause. We respectfully disagree.

A

The dispute in BG Group arose after BG Group plc, a

British firm, acquired an Argentine gas company. See 572 U.S.

at 29. At the time of the acquisition, Argentine law required

gas tariffs to be calculated in dollars and set at levels to assure

investors of a reasonable return. See id. Later, Argentina

enacted new laws requiring the tariffs to be calculated in pesos,

which caused BG to incur substantial losses. See id. at 29–30.

BG claimed that Argentina’s conduct violated a bilateral

investment treaty between the United Kingdom and Argentina.

The treaty incorporated background norms of customary

international law, including a requirement of fair and equitable

treatment and a prohibition of uncompensated expropriation.

Agreement for the Promotion and Protection of Investments,

9

Dec. 11, 1990, 1765 U.N.T.S. 34, 35–36. The treaty also

contained an arbitration clause governing investment disputes

“which arise within the terms of this Agreement”—i.e.,

disputes arising under the treaty. Id. at 37–38. The clause

required an aggrieved investor to raise such claims in the

domestic courts of the offending government. Id. It permitted

the aggrieved investor to pursue international arbitration if it

was unsatisfied with the “final decision” of the domestic courts

or if no such decision was made within eighteen months. Id.

at 38. And it provided that the ensuing “arbitration decision

shall be final and binding on both Parties.” Id.

BG initiated arbitration against Argentina without first

seeking relief in the Argentine courts. It claimed that

Argentina’s new law violated the treaty provisions requiring

fair and equitable treatment of foreign investors and prohibiting

uncompensated expropriation. 572 U.S. at 30. Argentina

objected that the arbitral panel lacked jurisdiction because BG

had failed to pursue domestic remedies before initiating

arbitration. Id.

The arbitral panel rejected Argentina’s contention. It

concluded that certain Argentine laws, which made it difficult

for foreign investors to litigate in its domestic courts,

“implicitly excused compliance with the local litigation

requirement.” 572 U.S. at 31. These included laws staying the

effect of Argentine court judgments and imposing legal

disabilities on investors who filed claims under the treaty. See

id. at 30–31. After excusing the failure to exhaust, the

arbitrators ruled for BG on the merits. Id. at 31.

When BG sought to confirm the award, Argentina again

raised its exhaustion objection. The Supreme Court framed its

analysis around the question “who—court or arbitrator” should

decide questions related to arbitrability. 572 U.S. at 32. The

10

Court explained that parties to an arbitration agreement may

decide what questions to commit to the arbitrators. Id. at 33–

34. The Court framed two competing presumptions to help

discern the parties’ intent if the relevant agreement is silent or

ambiguous. Id. On the one hand, “courts presume that the

parties intend courts, not arbitrators” to resolve substantive

“disputes about arbitrability.” Id. at 34 (cleaned up). On the

other hand, “courts presume that the parties intend arbitrators,

not courts, to decide disputes about the meaning and

application of particular procedural preconditions for the use of

arbitration.” Id. The Court explained that such procedural

provisions include “time limits, notice, laches, estoppel, and

other conditions” that determine “when the contractual duty to

arbitrate arises, not whether there is a contractual duty to

arbitrate at all.” Id. at 35 (cleaned up). In contrast, provisions

that specify “whether [the arbitration] may occur or what its

substantive outcome will be on the issues in dispute” are

substantive ones presumptively for courts to interpret and

apply. Id. at 35–36. So too are provisions about “whether th[e]

arbitration clause covers a certain kind of dispute” or those

having a “direct impact” on its resolution. Id. at 42.

Applying this distinction, the Court held that the

investment treaty’s local-litigation provision was a mere

procedural precondition to be construed by arbitrators. 572

U.S. at 35–36. According to the Court, the provision neither

determined whether the arbitration clause covered a certain

kind of dispute nor had any bearing on its outcome. Id. at 35–

36, 42. In particular, the Court noted that the treaty itself made

the arbitrators’ decision—not the earlier decision of the

domestic courts—“final and binding.” See id. at 42. Because

the exhaustion requirement thus had no substantive effect on

the outcome of arbitration, it was merely “a claims-processing

rule” for the arbitrators to construe. Id.

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B

The local-litigation provision here functions as more than

just a claims-processing rule. As explained above, the

exhaustion requirement in BG Group appeared in a treaty

codifying fair-treatment and just-compensation rules that arise

under public international law. In contrast, the local-litigation

provision here appears in a contract between Equatorial Guinea

and one particular investor, which would be governed by the

domestic, private law of one relevant sovereign. See Third

Restatement § 712 cmt. h (state-investor contracts are typically

assessed “under applicable national law” rather than

international law). Perhaps the law of Equatorial Guinea would

apply, because the contract involved the management of a

hospital in Equatorial Guinea. Or perhaps Swiss law would

apply, because the dispute-resolution provision called for

arbitration in Switzerland. Either way, the local-litigation

provision implicates contract claims arising under domestic

law, not international claims that arise from treaties or custom.

This distinction is important. International tribunals are

best situated to resolve international claims, which is perhaps

why the investment treaty in BG Group made the arbitral

decision “final and binding.” See 572 U.S. at 42. And it is

perhaps why, in BG Group, the Court stressed that the

arbitrators “need not give weight to the local court’s decision”

on the international claims at issue. Id. Here, in contrast, both

parties agree that any resolution of the contract claims by the

domestic courts of Equatorial Guinea would bind the Swiss

arbitral forum as to those claims. Instead, Marseille-Kliniken

could pursue before the arbitrators only international claims

keyed to any gross abuse in how the domestic courts handled

the domestic claims before them. As noted above, international

12

law has long recognized such claims for “denial of justice.”

See Third Restatement § 711 cmt. a.1

Given this interplay between contractual and international

claims, the local-litigation provision here has substantive

import. Without it, Marseille-Kliniken could freely present to

the arbitrators its breach-of-contract claims, as would normally

occur for contract claims governed by arbitral agreements

between private parties. But a decision by the Equatoguinean

courts on the contract claims would simultaneously preclude

arbitration on the contract claims and possibly create

international claims for denial of justice. The provision thus

bears not only on when the parties may arbitrate, but also on

what claims they may submit to the arbitrators. Under BG

Group, such a provision bears on substantive arbitrability, and

is thus presumptively for courts to construe. See 572 U.S. at

35–36, 42.

Another aspect of BG Group reinforces this conclusion.

Recall that Argentina had enacted laws hindering access to its

domestic judiciary, leading the arbitral panel to excuse

compliance with an exhaustion requirement that applied by its

terms. See 572 U.S. at 30–31. In deferring to that decision, see

1

See also Tel-Oren v. Libyan Arab Republic, 726 F.2d 774, 783

n.11 (D.C. Cir. 1984) (per curiam) (Edwards, J., concurring) (noting

that a party bringing such a claim could argue “corruption, threats,

unwarrantable delay, flagrant abuse of judicial procedure, a

judgment dictated by the executive, or so manifestly unjust that no

court which was both competent and honest could have given it”

(cleaned up)); Borchard, The “Minimum Standard” of the Treatment

of Aliens, 38 Mich. L. Rev. 445, 460 (1940) (a party could argue

denial of “[f]air courts, readily open to aliens, administering justice

honestly, impartially, without bias or political control”); The Denial

of Justice Standard in International Law, 97 Am. J. of Int’l L. 438,

439 (Murphy ed., 2003) (similar).

13

id. at 45, the Court effectively concluded that BG had

established at least a colorable case for applying a futility

exception to exhaustion that is well-recognized in international

law. See, e.g., Third Restatement § 713 cmt. f; Dugan 352.

Here, no such exception would colorably apply, as Marseille-

Kliniken does not contend that Equatorial Guinea has imposed

any impediments on its ability to litigate contract claims in the

domestic courts of that country.

C

Nothing in the contract between Marseille-Kliniken and

Equatorial Guinea rebuts the presumption that courts should

decide threshold questions of arbitrability. Such threshold

questions include deciding whether the parties have satisfied

any preconditions for arbitration. See Henry Schein, Inc. v.

Archer & White Sales, Inc., 586 U.S. 63, 67–68 (2019).

To delegate threshold arbitrability questions to arbitrators,

parties must do so “clearly and unmistakably.” Howsam v.

Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (cleaned

up); see also First Options of Chi., Inc. v. Kaplan, 514 U.S.

938, 944 (1995). This Court has held that such a clear and

unmistakable delegation can exist where the arbitration

agreement incorporates a set of rules authorizing the arbitrators

to determine arbitrability. For example, it can be enough to

incorporate the Arbitration Rules of the United Nations

Commission on International Trade Law (UNCITRAL), which

provide that the “arbitral tribunal shall have the power to rule

on its own jurisdiction.” See Stileks, 985 F.3d at 878–79;

Chevron, 795 F.3d at 207–08. On the other hand, enlisting the

American Arbitration Association “for help in choosing a

successor arbitrator” is not enough, even though AAA rules

authorize the arbitrators to determine arbitrability. See Dist.

No. 1 Pac. Coast Dist. Marine Eng’rs’ Beneficial Ass’n AFL-

14

CIO v. Liberty Mar. Corp., 998 F.3d 449, 461–62 (D.C. Cir.

2021). As we explained, the “mention of the AAA … does not

embody an incorporation of [its] rules, let alone a clear and

unmistakable incorporation.” Id. at 462.

In this case, nothing in the dispute-resolution clause

delegates arbitrability questions to arbitrators. Marseille-

Kliniken urges a delegation because the dispute-resolution

clause authorized arbitration before the Zurich Chamber of

Commerce, which presumptively uses the Swiss Chambers’

Arbitration Rules, and those rules authorize arbitrators to

determine arbitrability. That would be a strong argument if the

Zurich Chamber were legally bound to use the Swiss Rules; for

instance, a contractual venue clause requiring adjudication in a

specific district court surely would entail the use of that court’s

local rules. But nothing binds arbitration services to use any

particular set of rules. To the contrary, Swiss law allows the

parties to “agree on individual rules tailored to their specific

case, on institutional arbitration rules, on independent

arbitration rules (e.g. UNCITRAL Arbitration Rules) or on

national procedural law.” Swiss Priv. Int’l L. Act (Ch. 12), art.

182 at 931, https://perma.cc/ZAW7-VM44. And the “arbitral

tribunal’s authority to determine the procedure is subsidiary to

the parties’ agreement.” Id. So, enlisting the services of the

Zurich Chamber of Commerce says little about what specific

procedural rules would govern any individual arbitration.

Indeed, in this very case, the arbitrators did not fix the

governing procedural rules until a procedural order entered in

December 2015. See J.A. 549.

Marseille-Kliniken argues that Equatorial Guinea forfeited

its current argument by not specifically objecting to use of the

Swiss Rules at an initial procedural meeting. But it is

Marseille-Kliniken’s burden to show that the dispute-

resolution clause clearly and unmistakably delegated

15

arbitrability decisions. See First Options, 514 U.S. at 944–46.

Moreover, Equatorial Guinea repeatedly argued to the

arbitrators that the arbitral panel lacked jurisdiction to decide

anything unless and until Marseille-Kliniken exhausted its

remedies in Equatoguinean courts. That objection subsumes

the narrower, subsidiary objection that the arbitral panel should

not have the sole and final word on the specific question of

exhaustion.

* * * *

In sum, the district court erred in deferring to the arbitral

panel’s construction of the dispute-resolution clause.

IV

Equatorial Guinea asks us to interpret the clause ourselves

and hold that it requires exhaustion. We decline to do so. Like

the Supreme Court, “we are a court of review, not of first

view,” so we ordinarily do not decide contested questions not

resolved below. Cutter v. Wilkinson, 544 U.S. 709, 718 n.7

(2005). And we should particularly avoid doing so here, where

the merits may require factfinding or may turn on unfamiliar

questions of Equatoguinean or Swiss law.

One significant question involves determining what law

should govern interpretation of the dispute-resolution clause.

Perhaps the law of Equatorial Guinea because the contract

required, and the dispute involved, primary conduct occurring

almost entirely in that country. Perhaps Swiss law, because the

parties opted for arbitration in Switzerland. Perhaps even

United States law, given the Supreme Court’s choice in BG

Group to apply “presumptions supplied by American law” in

addressing a dispute arising almost entirely in Argentina. See

572 U.S. at 37. The contract does not contain a choice-of-law

clause, and the parties did not brief this issue.

16

Beyond the choice-of-law question lie substantive

questions regarding what interpretive principles should govern.

The arbitrators here concluded that the dispute-resolution

clause is ambiguous on the specific question whether

exhaustion is required. If that is so, should the court just decide

what reading of the governing text is most plausible? To what

extent should it consider extrinsic evidence, like the testimony

of Marseille-Kliniken’s founder regarding his understanding of

the contract? To what extent should domestic law seek to

conform to any international-law norm favoring exhaustion of

local remedies? The parties did not address these issues in any

detail. Finally, should the court consider at all Equatorial

Guinea’s Foreign Investment Law, which requires exhaustion

of local remedies for disputes arising from investment projects

approved under that law? See J.A. 282–83. Equatorial Guinea

contends that this law is dispositive. But at oral argument,

neither party could tell us whether the agreement at issue here

had been so approved.

Given the extent of uncertainty on these points, we think it

best to remand for the parties to address these issues and the

district court to resolve them in the first instance. We therefore

vacate the district court’s judgment and remand for further

proceedings consistent with this opinion.

So ordered.