The Southern District of New York has held that a petitioner did not show that it diligently pursued its rights or that extraordinary circumstances existed to equitably toll the three-year statute of limitation to confirm a foreign arbitration award. The court therefore dismissed the petition to confirm the award on the ground that it was time-barred.
PT Rahajasa Media Internet entered into contracts with a branch of the Indonesian government to provide internet access to various locations in Indonesia. PT Rahajasa completed certain work on the projects before the Indonesian government apparently decided not to proceed with the projects. In early 2017, PT Rahajasa and the Indonesian government arbitrated how much the Indonesian government owed PT Rahajasa. On July 27, 2017, the Indonesian National Board of Arbitration awarded PT Rahajasa approximately $17 million. PT Rahajasa registered the award in an Indonesian court in August 2017, and the award became final and binding in September 2017.
On March 26, 2018, PT Rahajasa made a formal application for an order of execution in the Indonesian court, which PT Rahajasa claimed the Indonesian court was required to issue within 30 days of PT Rahajasa’s request. The Indonesian court never issued the order, despite PT Rahajasa apparently following up on its application several times.
On December 30, 2020, PT Rahajasa petitioned the Southern District to confirm the award. The Southern District issued an order to show cause as to why the petition should not be dismissed on the ground that it was filed more than three years after the arbitration award was entered.
In response, PT Rahajasa argued that the three-year statute of limitation should be equitably tolled. It claimed, among other things, that the Indonesian government had colluded to preclude it from enforcing the award in Indonesia and that the COVID-19 pandemic and other issues had hampered its attempts to enforce the award in Indonesian courts in a timely fashion.
The district court concluded that equitable tolling did not apply because PT Rahajasa had not established that it had been diligent in pursuing its rights or that extraordinary circumstances stood in its way and prevented its timely filing. The court noted that PT Rahajasa had not explained why it waited six months after the award became final to seek an order of execution or what, specifically, it did in the years thereafter to follow up on its application or what happened when it did follow up. The court also noted that the COVID-19 pandemic did not arise until years after PT Rahajasa obtained its award. Nor did PT Rahajasa explain what efforts it made to pursue its award when the pandemic required Indonesian courts to begin virtual proceedings. PT Rahajasa also did not explain why it waited until December 2020 to file its petition. With respect to extraordinary circumstances, the court explained that PT Rahajasa’s claims of collusion were “conclusory and speculative” and that PT Rahajasa had not established a causal relationship between these alleged extraordinary circumstances and an inability to petition the Southern District to confirm its award in a timely fashion. The court therefore dismissed the petition.
PT Rahajasa Media Internet v. Telecommunication and Informatics Financing Provider and Management Centre, No. 1:20-cv-11035 (Mar. 31, 2022).
