Ioan Micula v. Government of Romania

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued February 28, 2024 Decided May 14, 2024
No. 23-7008
IOAN MICULA, ET AL.,
APPELLEES
v.
GOVERNMENT OF ROMANIA,
APPELLANT
Appeal from the United States District Court
for the District of Columbia
(No. 1:17-cv-02332)
David R. Fine argued the cause for appellant. On the briefs
were Ioana Salajanu and Matthew J. Weldon.
Stephen P. Anway and Dimitar P. Georgiev-Remmel were
on the brief for amicus curiae the European Commission in
support of appellant.
Francis A. Vasquez, Jr. argued the cause for appellees.
With him on the brief were Hansel T. Pham, Jacqueline L.
Chung, Drew Marrocco, Catharine Luo, Anthony B. Ullman,
John J. Hay, and Luke A. Sobota.

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Paul M. Levine, James J. East, Jr., and Carlos Ramos-
Mrosovsky were on the brief for amicus curiae International
Scholars in support of appellees.
Before: PILLARD and PAN, Circuit Judges, and ROGERS,
Senior Circuit Judge.
Opinion for the Court by Senior Circuit Judge ROGERS.
ROGERS, Senior Circuit Judge: The Government of
Romania seeks relief from three judgments stemming from the
confirmation of an international arbitral award on the ground
that the district court lacked subject matter jurisdiction under
the arbitration exception to the Foreign Sovereign Immunities
Act (“FSIA”), 28 U.S.C. § 1605(a)(6). It contends that the
bilateral agreement to arbitrate underlying the award is invalid
under European Union (“EU”) law as shown by two decisions
of the EU’s highest court in 2022. The district court denied
Romania’s motion for relief pursuant to Federal Rule of Civil
Procedure 60(b) on the grounds that EU law was inapplicable,
because the dispute preceded Romania’s accession to the EU
in 2007 and neither EU decision on which Romania relies
retroactively rendered the arbitration agreement void when it
joined the EU. For the following reasons, the court affirms the
denial of the motion.
I.
The underlying foreign arbitral award stemmed from
adoption by the Government of Romania of tax incentives to
encourage investment in certain economically “disfavored”
regions of the country. According to Micula et al. v.
Government of Romania, ICSID Case No. ARB/05/20, Award
¶ 145 (Dec. 11, 2013) (“Arbitral Award”), the Micula brothers
and associated entities (hereinafter, “Miculas”) built food
production facilities in Romania relying on these incentives,

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which Romania stated would remain in place until at least
2009. See id. ¶¶ 133, 145, 152, 156, 166–72, 677, 686, 689.
After Romania repealed most of the tax incentives in February
2005 in preparation to join the EU, see id. ¶¶ 132, 234–39, 244,
the Miculas filed for arbitration in July 2005 under the rules of
the Convention on the Settlement of Investment Disputes
between States and Nationals of Other States, March 18, 1965,
17 U.S.T. 1270, 575 U.N.T.S. 159 (“ICSID”). As Swedish
nationals, the Miculas invoked arbitral jurisdiction pursuant to
a 2002 bilateral investment treaty between Romania and EU
member Sweden (“Sweden-Romania BIT”). Arbitral Award
¶¶ 1, 226, 247. Article 7 of the treaty provides for ICSID
international arbitration of investment disputes.
In December 2013, an ICSID tribunal awarded the Miculas
376,433,229 Romanian Lei in damages, plus interest, for
breach of the Sweden-Romania BIT. Arbitral Award ¶ 1329.
Applying the Sweden-Romania BIT, id. ¶¶ 288, 318, the
tribunal ruled that EU law did not govern the dispute because
although Romania joined the EU in 2007 during the pendency
of the arbitral proceedings, it was not part of the EU and “not
properly subject to EU law” during the events underlying the
dispute. Id. ¶¶ 319, 340. Romania petitioned unsuccessfully
in 2014 to annul the award as inconsistent with EU law.
In March 2015, while the annulment petition was pending,
the European Commission determined that Romania’s
satisfaction of the award as an EU member would constitute
anticompetitive “state aid” under EU law, and forbid Romania
from paying the award. The Miculas sought review in the
General Court of the Court of Justice of the European Union
(“General Court”), a constituent court of the Court of Justice of
the European Union (“CJEU”), the EU’s highest court. In June
2019, the General Court invalidated the Commission decision,
ruling that because the award compensated the Miculas for
Romania’s pre-EU conduct, the Commission lacked the

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“competence” to review whether paying it would constitute
state aid. Eur. Food S.A. v. Eur. Comm’n, Nos. T-624/15, T-
694/15, T-704/15 (18 June 2019) (“2019 General Court”) ¶¶
66–67, 74–75, 79–80, 90–95. Romania appealed in August
2019 to the CJEU.
Meanwhile, in November 2017, the Miculas petitioned the
United States District Court for the District of Columbia to
enforce the award pursuant to 22 U.S.C. § 1650a.1 The district
court confirmed the award in September 2019 and entered
judgment for $356,439,727, net of payments made and with
interest. Micula v. Government of Romania, 404 F. Supp. 3d
265, 270, 285 (D.D.C. 2019) (“2019 Confirmation”). The
district court exercised jurisdiction pursuant to the FSIA’s
exception to sovereign immunity for proceedings to “confirm
an award made pursuant to [] an agreement to arbitrate,” 28
U.S.C. § 1605(a)(6). Romania challenged subject matter
jurisdiction, arguing that the arbitration clause in the Sweden-
1 22 U.S.C. § 1650a:
§ 1650a. Arbitration awards under the
Convention
(a) Treaty rights; enforcement; full faith and
credit; nonapplication of Federal Arbitration Act
An award of an arbitral tribunal rendered pursuant
to chapter IV of the convention shall create a right
arising under a treaty of the United States. The
pecuniary obligations imposed by such an award
shall be enforced and shall be given the same full
faith and credit as if the award were a final judgment
of a court of general jurisdiction of one of the several
States. The Federal Arbitration Act (9 U.S.C. 1 et
seq.) shall not apply to enforcement of awards
rendered pursuant to the convention.

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Romania BIT was void as of Romania’s 2007 accession
because EU law prohibits intra-EU agreements to arbitrate EU
law disputes between a member state and the citizens of
another member state. The district court ruled EU law was
inapplicable because the parties’ dispute predated Romania’s
EU membership and the award did not “relate to the
interpretation or application of EU law.” 2019 Confirmation,
404 F. Supp. 3d at 279–80.
This court affirmed. Micula v. Government of Romania,
805 F. App’x 1 (D.C. Cir. 2020) (“Micula I”). On appeal,
Romania conceded jurisdiction, see Br. of Resp’t-Appellant,
Micula v. Government of Romania, No. 19-7127 at 1, while the
European Commission continued to argue that EU law voided
Romania’s agreement to arbitrate, see Br. of Amicus Curiae
European Commission, Micula v. Government of Romania,
No. 19-7127 at 7–11. The court held that, “[a]s Romania now
agrees, the district court properly invoked the [FSIA] exception
for actions to enforce arbitration awards.” Micula I, 805 F.
App’x at 1. Regarding the Commission’s jurisdictional
arguments, the court observed that, “as the district court
carefully explained, Romania did not join the EU until after the
underlying events here, so the arbitration agreement applied”
regardless of Romania’s subsequent accession to the EU. Id.
Later proceedings led to judgments for discovery sanctions and
accrued sanctions that this court affirmed. See Micula v.
Government of Romania, No. 20-7116, 2022 WL 2281645
(D.C. Cir. Jun. 24, 2022); Micula v. Government of Romania,
No. 21-7139, 2023 WL 2127741 (D.C. Cir. Feb. 21, 2023).
In March 2022, Romania sought relief from the 2019
Confirmation , and ensuing sanctions, pursuant to Clauses (4),
(5), and (6) of Federal Rule of Civil Procedure 60(b), arguing
that two decisions of the EU’s highest court in 2022 held, “[i]n
unequivocal terms,” that “the agreement to arbitrate in the
[Sweden-Romania] BIT was void the moment that Romania

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entered the EU.” Romania’s Mem. of Supp. of Mot. for Relief
from Judg. (Mar. 29, 2022) at 5. As relevant, in January 2022,
the CJEU overturned the 2019 General Court decision and held
that the European Commission was “competent” to evaluate
whether Romania’s post-accession payment of the award
would constitute prohibited “state aid.” Eur. Comm’n v. Eur.
Food S.A., ECLI:EU:C:2022:50 (25 Jan. 2022) (“January 2022
CJEU”). In September 2022, the CJEU held that because the
Commission has determined satisfying the award would be
state aid, EU courts cannot enforce it. Romanian Air Traffic
Serv. Admin. v. Eur. Food S.A., ECLI:EU:C:2022:749 (21 Sep.
2022) (“September 2022 CJEU”). The district court denied the
Rule 60(b) motion, concluding that the CJEU Decisions did not
hold Romania’s accession retroactively voided its pre-EU
consent to arbitrate and “the jurisdictional fact . . . that there
was a valid agreement to arbitrate before Romania acceded to
the EU — remains undisturbed.” Micula v. Romania, Mem.
Op. at 12–15 (D.D.C. Dec. 22, 2022) (“2022 Mem. Op.”), 2022
WL 18356669, at *7; Order (Dec. 22, 2022). Romania appeals.
II.
Romania contends, as it did in the district court, that the
district court erred in denying relief under Rule 60(b)(4),
(b)(5), and (b)(6), and on appeal invokes the principle of
international comity. Its brief does not distinguish between the
three district court judgments and appears to reason that if the
court sets aside the 2019 Confirmation, then the sanctions in
2020 and 2021 to enforce earlier confirmation should also be
set aside. Inasmuch as the Miculas also do not draw a
distinction between the judgments, the court will address only
whether the district court erred in denying relief from the 2019
Confirmation. Rule 60(b) proceedings are “subject to only
limited and deferential appellate review.” Gonzalez v. Crosby,
545 U.S. 524, 535 (2005) (citation omitted). Romania fails to
meet its burden to show error by the district court.

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A.
Rule 60(b)(4) provides for relief when a judgment is
“void.” FED R. CIV. P. 60(b)(4). A judgment is “not void . . .
simply because it is or may have been erroneous.” United
Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 270 (2010).
Where a jurisdictional defect is alleged, relief is usually
reserved “only for the exceptional case in which the court that
rendered judgment lacked even an arguable basis for
jurisdiction.” Id. at 271 (internal quotations omitted).
Appellate review of a district court’s “arguable basis” ruling is
de novo. Lee Mem’l Hosp. v. Becerra, 10 F.4th 859, 863 (D.C.
Cir. 2021).
Romania maintains that the district court erred in applying
the “arguable basis” standard because Bell Helicopter Textron,
Inc. v. Islamic Republic of Iran, 734 F.3d 1175, 1182 (D.C. Cir.
2013), “strongly suggests that de novo review is appropriate
any time a foreign sovereign contends that jurisdiction under
the FSIA is lacking.” Appellant’s Br. 40. Bell Helicopter
applied de novo review where the defendant sovereign’s failure
to appear resulted in entry of a default judgment, so limiting
the scope of review “would create a high risk for parties who
choose not to appear” based on the view that the court lacks
jurisdiction. Bell Helicopter, 734 F.3d at 1181–82; see Lee
Mem’l Hosp., 10 F.4th at 864. By contrast, Romania appeared
in the 2019 confirmation proceedings and contested subject
matter jurisdiction. On appeal, it conceded jurisdiction under
the FSIA. See Micula I, 805 F. App’x at 1. “Because the
considerations that led [the court] away from the arguable basis
standard in the circumstances of Bell Helicopter are absent
here,” the arguable basis standard properly applies. Lee Mem’l
Hosp., 10 F.4th at 864 (citing Espinosa, 559 U.S. at 271
(internal quotations omitted)).

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Romania further maintains that even so there is no
arguable basis for jurisdiction because the “sole basis” for the
district court’s determination that jurisdiction existed under the
FSIA was an erroneous “interpretation and application of EU
law.” Appellant’s Br. 44–45. In fact, the district court’s
jurisdictional analysis in 2019 was not premised on the
“interpretation and application of EU law.” Rather, the district
court independently found the requisite “jurisdictional fact[]”
under the arbitration exception of an agreement to arbitrate
with the Miculas, LLC SPC Stileks v. Republic of Moldova, 985
F.3d 871, 877 (D.C. Cir. 2021), through the 2002 Sweden-
Romania BIT and the Miculas’ 2005 request for arbitration.
2019 Confirmation, 404 F. Supp. 3d at 279–80. As this court
later observed, Micula I, 805 F. App’x at 1, the district court in
2019 based that finding on careful examination of the
underlying arbitral award — to which it was obligated to give
“full faith and credit,” 22 U.S.C. § 1650a(a) — and the text of
the Sweden-Romania BIT. Likewise, the district court based
its conclusion that the award did not “relate to the interpretation
or application of EU law” on a “close inspection” of the award,
which stated that the source of substantive law was the
Sweden-Romania BIT, and that EU law did not apply because
the dispute predated Romania’s EU membership. 2019
Confirmation, 404 F. Supp. 3d at 279–80 (quoting Arbitral
Award ¶¶ 288, 318–19).
Furthermore, the 2022 CJEU decisions on which Romania
relies do not support the interpretation that its 2007 accession
to the EU retroactively rendered the preexisting agreement to
arbitrate with Swedish investors “void ab initio.” Appellant’s
Br. 45. The January 2022 CJEU decision addressed the
European Commission’s authority under EU law to examine
whether Romania’s payment of the award as a current member
of the EU might constitute impermissible state aid. January
2022 CJEU ¶¶ 123–27. The decision does not implicitly, much
less “indisputably” rule, Appellant’s Br. 45, on the retroactive

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validity of an agreement to arbitrate pre-dating Romania’s
accession. The relevant passage in that decision states that the
“effect [of] Romania’s accession to the European Union” was
that Romania’s “consent [to arbitrate] . . . from that time
onwards, lacked any force.” January 2022 CJEU ¶ 145. The
September 2022 CJEU decision similarly states that Romania’s
consent to arbitrate became void “from Romania’s accession to
the European Union.” September 2022 CJEU ¶¶ 38–42.
The January 2022 CJEU decision did conclude, for the
purposes of deciding whether the Commission was competent
to review Romania’s post-accession payment of the award, that
the relevant damages period extended beyond 2007. January
2022 CJEU ¶ 140. But under the FSIA arbitration exception,
the relevant jurisdictional question is the existence of a valid
agreement to arbitrate. See Stileks, 985 F.3d at 877. The extent
of the damages period does not affect “the jurisdictional fact
that, at the time [the Miculas] filed for arbitration, Romania had
agreed to arbitrate under the Sweden-Romania BIT.” 2022
Mem. Op. at 19, 2022 WL 18356669, at *9.
B.
Rule 60(b)(5) provides relief from certain judgments,
including a judgment “based on an earlier judgment that has
been reversed or vacated” or where “applying it prospectively
is no longer equitable.” FED. R. CIV. P. 60(b)(5). Romania
maintains the district court judgments are based on a judgment
of the General Court that the CJEU reversed or vacated. In
Twelve John Does v. District of Columbia, 841 F.2d 1133, 1138
(D.C. Cir. 1988), this court reviewed the district court’s denial
of a Rule 60(b)(5) motion for abuse of discretion under the “no
longer equitable” clause. But the court does not appear to have
established the standard of review for the “reversed or vacated”
clause, and it does not always apply an abuse of discretion
standard for Rule 60(b) motions, as for Rule 60(b)(4) motions

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where the court has applied a de novo a standard of review, see
Combs v. Nick Gurtin Trucking, 825 F.2d 437, 441 (D.C. Cir.
1987). The parties assert that the abuse of discretion standard
applies to Rule 60(b)(5) motions, see Appellant’s Br. 30;
Appellee’s Br. 19, and absent briefing the court will assume,
without deciding, that it does.
The district court’s subject matter jurisdiction, contrary to
Romania’s view, did not “depend” on the 2019 General Court
decision. Appellant’s Br. 46. The district court rejected
Romania’s invocation of EU law upon independently finding
that this dispute predated Romania’s EU membership and did
not interpret or apply EU law. 2019 Confirmation, 404 F.
Supp. 3d at 279–80. Again, the district court based those
conclusions on its “close inspection” of the arbitral award and
the Sweden-Romania BIT, id., and its analysis did not discuss
the 2019 General Court decision. Instead, the district court
stated that its subsequent discussion of the 2019 General Court
decision served to “confirm[],” id. at 280, its conclusion that
the arbitral tribunal did not apply EU law, 2022 Mem. Op. at
15–17, 2022 WL 18356669, at *8.
For the first time on appeal, Romania maintains that the
2022 CJEU decisions invalidated the underlying award itself.
Appellant’s Br. 49–50. “It is well settled that issues and legal
theories not asserted at the District Court level ordinarily will
not be heard on appeal.” District of Columbia v. Air Fla., Inc.,
750 F.2d 1077, 1084 (D.C. Cir. 1984). Romania offers no
explanation for its failure to do so. See id. In any event, on
appeal Romania cites no text from either 2022 CJEU decision
suggesting that court purported to invalidate the underlying
arbitral award. Under the ICSID Convention, the “only route
for setting aside an ICSID Arbitral Tribunal’s award is through
the . . . annulment process,” which Romania unsuccessfully
pursued. Valores Mundiales, S.L. v. Bolivarian Republic of
Venezuela, 87 F.4th 510, 515 (D.C. Cir. 2023). Signatory

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nation courts must “recognize an award rendered pursuant to
the Convention as binding” and are “not permitted to examine
an ICSID award’s merits.” Id. (quotations and citations
omitted).
C.
Rule 60(b)(6) provides relief from a judgment for “any
other reason that justifies relief.” FED. R. CIV. P. 60(b)(6). The
clause applies where a movant can demonstrate “extraordinary
circumstances,” Liljeberg v. Health Servs. Acquisition Corp.,
486 U.S. 847, 864 (1988), and “should be only sparingly used,”
Salazar ex rel. Salazar v. District of Columbia, 633 F.3d 1110,
1120 (D.C. Cir. 2011) (quoting Kramer v. Gates, 481 F.3d 788,
792 (D.C. Cir. 2007)). Because Rule 60(b) clauses are
“mutually exclusive,” relief under (b)(6) may not be “premised
on one of the grounds for relief enumerated in clauses (b)(1)
through (b)(5).” Salazar, 633 F.3d at 1116 (first quoting
Pioneer Inv. Servs. Co. v. Brunswick Assocs. Ltd. P’ship, 507
U.S. 380, 393 (1993); then quoting Liljeberg, 486 U.S. at 863).
The court reviews the district court’s denial of Rule 60(b)(6)
relief for abuse of discretion. Id. at 1114–15.
Romania interprets the 2022 CJEU decisions to represent
a “change in controlling law and in circumstance” insofar as
they establish that there “has never been a valid agreement to
arbitrate.” Appellant’s Br. 53–54 (emphasis in original). But,
as the district court concluded, Romania’s attempt to obtain
relief pursuant to Clause (b)(6) repackages arguments made in
seeking relief pursuant to Rule 60(b)(4) and (b)(5), and is
therefore barred. See 2022 Mem. Op. at 19, 2022 WL
18356669, at *9.
Romania also invokes the principle of international
comity. Appellant’s Br. 59–62. As Romania specifies no
clause of Rule 60(b), the court construes it to seek relief under

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Clause (b)(6) and considers whether the asserted comity
concerns rise to the level of an extraordinary circumstance.
“‘Comity’ summarizes in a brief word a complex and elusive
concept — the degree of deference that a domestic forum must
pay to the act of a foreign government not otherwise binding
on the forum.” Laker Airways Ltd. v. Sabena, Belgian World
Airlines, 731 F.2d 909, 937 (D.C. Cir. 1984). Neither a “matter
of absolute obligation” nor of “mere courtesy and good will,”
Hilton v. Guyot, 159 U.S. 113, 163–64 (1895), the “obligation
of comity expires” when it is in conflict with “the strong public
policies of the forum.” Laker Airways, 731 F.2d at 937–38.
Here, Romania maintains that the district court ignored the
effect of the 2022 CJEU decisions and failed to take due
account of the incompatibility between Romania’s EU
obligations and the district court’s confirmation of the award.
Appellant’s Br. 48, 59–60. The district court carefully
examined the two CJEU decisions prior to concluding that they
did not affect its jurisdiction under the FSIA. 2022 Mem. Op.
at 6–7, 13–15, 2022 WL 18356669, at *3–4, *7. Essentially,
Romania urges the court to ignore that Congress enacted a
“comprehensive set of legal standards” in the FSIA that
“indisputably govern[]” sovereign immunity, so that “any sort
of immunity defense made by a foreign sovereign in an
American court must stand on the Act’s text. Or it must fall.”
Republic of Argentina v. NML Cap., Ltd., 573 U.S. 134, 141–
42 (2014) (quotations and citations omitted). Similarly,
Congress enacted Section 1650a, supra note 1, to give effect to
the United States’ treaty obligations under the ICSID
Convention, requiring U.S. courts to give “full faith and credit”
to ICSID awards. See Medellín v. Texas, 552 U.S. 491, 521–
22 (2008). The district court exercised jurisdiction under the
FSIA arbitration exception, and it was obligated by Section
1650a to enforce the Miculas’ valid ICSID award. 2019
Confirmation, 404 F. Supp. 3d at 275–80. In so doing, the court

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did not abuse its discretion. Accord Usoyan v. Republic of
Turkey, 6 F.4th 31, 49 (D.C. Cir. 2021).
Accordingly, the court affirms the district court’s denial of
Romania’s Rule 60(b) motion for relief from judgment.

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