JOSÉ A. CABRANES, Circuit Judge:
This case requires us to consider the circumstances under which a federal court may enjoin foreign judicial proceedings that threaten to undermine federal judgments confirming and enforcing a foreign arbitral award. The United States District Court for the Southern District of New York (Thomas P. Griesa, Judge) enjoined appellant Perusahaan Pertambangan Minyak Dan Gas Bumi Negara ("Pertamina") from pursuing foreign litigation that would undermine federal judgments enforcing a foreign arbitral award that
Pertamina argues on appeal that the District Court used the wrong legal standard to determine whether an anti-foreign-suit injunction should issue against it and that, under the proper legal standard, the injunction should not have been granted. Pertamina also argues that, in any event, the District Court lacked jurisdiction to maintain the injunction once the federal money judgment against it was satisfied.
Although we find that the District Court did not apply the correct legal standard, we affirm its judgment with minor modifications. We conclude that: (1) the test set forth in China Trade & Development Corp. v. M.V. Choong Yong, 837 F.2d 33 (2d Cir.1987), applies to the anti-suit injunction; (2) the injunction was justified under the China Trade test; and (3) the District Court maintains jurisdiction to protect the federal judgments even after the money judgment against appellant was satisfied. We also modify the scope of the injunction to clarify that the injunction does not prohibit foreign confirmation proceedings contemplated by the New York Convention.
BACKGROUND
The dispute between the parties has been litigated extensively in several countries and two federal circuits for almost ten years. We set forth only those facts relevant to the disposition of the appeal.
In 1994, KBC, a Cayman Islands limited liability company owned by American power companies and other investors, and Pertamina, an oil and gas company owned and controlled by the Republic of Indonesia, entered into a joint venture for a project to explore and develop certain geothermal energy resources in Indonesia (the "Project"). See District Court Opinion, 465 F.Supp.2d at 284. The parties agreed to settle any disputes between them by binding arbitration in Geneva, Switzerland, under the Arbitration Rules of the United Nations Commission on International Trade Law ("UNCITRAL"). The parties further agreed that their contractual relationship would be governed by Indonesian law.
By 1998, the Indonesian government had suspended the Project. In 1998, KBC initiated arbitration proceedings in Switzerland in which it contended that the Indonesian government's actions caused it over $600 million in damages and lost profits. During the arbitration, the parties contested the potential yield of the geothermal resources KBC had contracted to develop with Pertamina and the validity of KBC's projections concerning the facilities it could develop to tap those resources. Pertamina contended that the geothermal resource and development estimates put forward by KBC when entering into the Project were "sham[s]," and that KBC had "no bona fide intention" to develop the energy-generating facilities proposed in its documents. The Swiss arbitral tribunal
In early 2001, KBC initiated proceedings in the United States District Court for the Southern District of Texas ("Texas District Court") to confirm the Award pursuant to the New York Convention. The Texas District Court entered a judgment in December 2001 confirming the Award in the amount of $261 million plus interest. See Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 190 F.Supp.2d 936 (S.D.Tex.2001) ("Texas Confirmation Opinion").
While the Texas District Court judgment confirming the Award was on appeal to the Fifth Circuit, Pertamina filed an action in a Jakarta, Indonesia, trial court in March 2002 seeking to collaterally attack the Award and enjoin KBC from enforcing the Award. KBC obtained a temporary restraining order from the Texas District Court prohibiting Pertamina from pursuing injunctive relief against KBC in Indonesia while the Texas District Court considered whether the Indonesian action impinged on its judgment and "upon KBC's legitimate efforts to enforce [KBC's] rights thereunder." Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 264 F.Supp.2d 470, 474 (S.D.Tex.2002) ("Texas Injunction Opinion"), rev'd, 335 F.3d 357 (5th Cir.2003) ("Fifth Circuit Injunction Opinion"). Despite the Texas District Court's temporary restraining order, Pertamina obtained an injunction from the Indonesian trial court prohibiting KBC from enforcing the Award and imposing on KBC "the obligation to pay enforcement money in the amount of US$500,000.00 for each day this order is contravened, which amount must be paid promptly and fully to . . . Pertamina." Texas Injunction Opinion, 264 F.Supp.2d at 474 n. 3 (quoting Indonesian injunction). The Indonesian trial court also issued an order annulling the Award. See Fifth Circuit Injunction Opinion, 335 F.3d at 363. Following entry of the Indonesian injunction, the Texas District Court issued a preliminary injunction prohibiting Pertamina from enforcing the Indonesian injunction or collecting penalties that might be imposed on KBC under the Indonesian injunction. See Texas Injunction Opinion, 264 F.Supp.2d at 483.
While the Indonesian trial court's decision was on appeal to the Indonesian Supreme Court, the Fifth Circuit vacated the preliminary anti-suit injunction issued by the Texas District Court. See Fifth Circuit Injunction Opinion, 335 F.3d at 360. In its decision, the Fifth Circuit determined that, "as the Convention already provides for multiple simultaneous proceedings, it is difficult to envision how court proceedings in Indonesia could amount to an inequitable hardship" sufficient to support an anti-suit injunction against the Indonesian proceedings. Id. at
Id. at 369.
In March 2004, the Indonesian Supreme Court vacated the Indonesian trial court's order annulling the Award and issuing the anti-suit injunction. In the ruling, the Indonesian Supreme Court concluded that only a Swiss court had power to annul the Award. Later that month, the Fifth Circuit affirmed the Texas District Court's confirmation of the Award. See Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 364 F.3d 274, 282 (5th Cir.) ("Fifth Circuit Confirmation Opinion"), cert. denied, 543 U.S. 917-18, 125 S.Ct. 59, 160 L.Ed.2d 202 (2004).
Pursuant to the New York Convention, KBC also sought to confirm and enforce the Award against Pertamina in Hong Kong, Singapore, and Canada. Those efforts yielded approximately $900,000 to be applied to the amount owed by Pertamina under the Award. See District Court Opinion, 465 F.Supp.2d at 286.
When Pertamina appealed the Texas District Court's judgment to the Fifth Circuit, it declined to post a supersedeas bond in order to obtain a stay of judgment pending appeal. See Fed.R.Civ.P. 62(d) ("When an appeal is taken the appellant by giving a supersedeas bond may obtain a stay. . . ."). This permitted KBC to seek registration and enforcement of the Texas District Court's judgment in the Southern District of New York, where Pertamina maintained several bank accounts in its name that held hundreds of millions of dollars in assets. See 28 U.S.C. § 1963 (providing for registration of federal judgments in other districts);
The parties then engaged in heated litigation concerning ownership of the assets in the New York bank accounts held in Pertamina's name. Pertamina contended that the Indonesian government was the actual owner of the funds in the New York bank accounts. On an interlocutory appeal certified pursuant to 28 U.S.C. § 1292(b), we determined that both Pertamina and the Indonesian government owned some part of the funds in the accounts; and that KBC was entitled to satisfy its judgment against Pertamina out of the portion of the funds owned by Pertamina. See Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 313 F.3d 70, 75, 92-93 (2d Cir.2002), cert. denied, 539 U.S. 904, 123 S.Ct. 2256, 156 L.Ed.2d 113 (2003). The District Court ultimately ordered Pertamina to turn over to KBC the entire amount of the Award (by this time valued at roughly $319 million, including interest on the award)—less the $900,000 already recovered by KBC in Hong Kong—out of the Pertamina-owned funds in the New York bank accounts. See District Court Decision, 465 F.Supp.2d at 291. We affirmed this order in March 2006. See Karaha Bodas Co. v. Ministry of Finance of the Republic of Indonesia, Nos. 04-6551-cv, 04-6672-cv, 2006 WL 565694, at *2 (2d Cir. Mar.9, 2006). Pertamina, seeking review of our
While Pertamina's petition for a writ of certiorari was pending before the Supreme Court, the District Court asked Pertamina whether, if the Supreme Court denied certiorari, Pertamina would finally consent to pay the remainder of the judgment against it, thus ending the litigation between the parties. See District Court Opinion, 465 F.Supp.2d at 288. In a letter to the District Court dated August 28, 2006, Pertamina stated that if certiorari were denied, it would "not object before this Court to the payment of the judgment." Id. This statement was technically accurate. The Supreme Court denied certiorari on October 2, 2006, see ___ U.S. ___, 127 S.Ct. 129, 166 L.Ed.2d 35 (2006), and on October 10, 2006, almost all of the remainder of the $319 million payment was turned over to KBC.
The Cayman Islands action, filed on September 15, 2006, was based on the theory that the Award was procured by fraud. Pertamina sought damages in the amount of the Award against KBC along with a variety of ancillary remedies. See District Court Opinion, 465 F.Supp.2d at 288-89. Specifically, Pertamina alleged in a supporting affidavit that, in August 2005, Pertamina's "advisors" discovered documents that "KBC had left behind when it ceased its operations and left Indonesia some time around 2002," which "revealed that KBC had committed a fraud on Pertamina" by creating fraudulent resource and development estimates for the Project. Pertamina further alleged that the fraud associated with these estimates was "such as to vitiate the Arbitral Award." District Court Opinion, 465 F.Supp.2d at 289 (internal quotation marks omitted). Accordingly, Pertamina sought damages, an accounting, and restitution from KBC for the alleged fraud, including "[r]estitution and/or equitable compensation and/or repayment of . . . all sums received by [KBC] pursuant to the Arbitral Award (and its enforcement)." See id.
In response to the Cayman Islands action, KBC moved in the Southern District of New York for an injunction prohibiting Pertamina from (1) maintaining the Cayman
While Pertamina's appeal from the District Court's anti-suit injunction was being briefed, KBC moved us to lift the stay entered by the District Court, thereby authorizing it to distribute to its shareholders the $263 million it had obtained from Pertamina. We granted KBC's motion on February 13, 2007. On February 15, 2007, Pertamina's motion for an emergency stay before the United States Supreme Court was denied. At oral argument for the instant appeal, we were informed by KBC that, following the lifting of the stay, KBC distributed substantially all of the remaining Pertamina funds to its shareholders and was thus no longer in possession of any of the assets that would be the subject of the Mareva injunction sought by Pertamina in the Cayman Islands.
DISCUSSION
The standard of review for the grant of a permanent injunction, including
In China Trade, we adopted a test governing the circumstances under which a federal district court could issue an anti-foreign-suit injunction. Under the China Trade test, an anti-suit injunction against foreign litigation may be imposed only if two threshold requirements are met: "(A) the parties are the same in both matters, and (B) resolution of the case before the enjoining court is dispositive of the action to be enjoined." Paramedics, 369 F.3d at 652 (citing China Trade, 837 F.2d at 35). If these two threshold requirements are satisfied, "courts are directed to consider a number of additional factors," id., including whether the parallel litigation would:
Ibeto Petrochemical Industries Ltd. v. M/T Beffen, 475 F.3d 56, 64 (2d Cir.2007) (quoting China Trade, 837 F.2d at 35). China Trade instructed that two of these factors should be accorded "greater significance": whether the foreign action threatens the enjoining forum's jurisdiction or its "strong public policies." 837 F.2d at 36. However, we have reiterated that all of the additional factors should be considered when determining whether an anti-suit injunction is warranted. See Ibeto Petrochemical, 475 F.3d at 64 (disagreeing with courts and commentators that "have erroneously interpreted China Trade to say that we consider only these two [more significant] factors"). China Trade also states that "principles of comity counsel that injunctions restraining foreign litigation be `used sparingly' and `granted only with care and great restraint.'" Paramedics, 369 F.3d at 652 (quoting China Trade, 837 F.2d at 36).
China Trade involved an anti-suit injunction prohibiting a foreign defendant from pursuing a parallel proceeding in a foreign forum while a proceeding was pending in the Southern District of New York. The District Court, noting that judgment had already been entered in American courts, did not apply the China Trade test. Relying on dicta in a district court decision that had been affirmed by our Court in a brief published per curiam opinion, the District Court concluded that a "more lenient standard" applied to injunctions intended to prevent an abusive effort to evade a domestic judgment. See District Court Opinion, 465 F.Supp.2d at 294-95 (quoting Farrell Lines Inc. v. Columbus Cello-Poly Corp., 32 F.Supp.2d 118, 131 (S.D.N.Y.1997), aff'd sub nom,
In the instant case, Pertamina argues that the District Court committed legal error in concluding that KBC did not have to satisfy the China Trade test in order to obtain an anti-suit injunction against it. It notes that the China Trade test has been applied by our Court for twenty years, and that we applied the China Trade test to an anti-foreign-suit injunction in Paramedics even though a "judgment ha[d] been rendered" in that case. 369 F.3d at 651, 653-54.
We agree with Pertamina that, pursuant to our decision in Paramedics, the China Trade test applies to anti-foreign-suit injunctions intended to protect federal judgments. We note, however, that as discussed in Paramedics, the discretionary China Trade factors will tend to weigh in favor of an anti-foreign-suit injunction that is sought to protect a federal judgment. In Paramedics, we applied the China Trade test to an anti-foreign-suit injunction that was entered to protect a federal judgment compelling arbitration. See 369 F.3d at 653-54. In doing so, we explained that "`[t]here is less justification for permitting a second action,' as here, `after a prior court has reached a judgment on the same issues,'" id. at 654 (quoting Laker Airways, 731 F.2d at 928 n. 53), and that "[a]n anti-suit injunction may be needed to protect the court's jurisdiction once a judgment has been rendered," id. We also concluded that while "[p]rinciples of comity weigh heavily in the decision to impose a foreign anti-suit injunction. . . . where one court has already reached a judgment—on the same issues, involving the same parties—considerations of comity have diminished force." Id. at 654-55.
Despite the District Court's legal error in not applying the China Trade test, we do not think it necessary to vacate the injunction and remand for further proceedings given the particular circumstances of the instant case. The principal difference between the "more lenient" test applied by the District Court and the China Trade test lies in the threshold requirements that a party must surmount to obtain an injunction under the latter. Based on the extensive record developed in the District Court and in other United States and foreign courts, we conclude as a matter of law that those threshold requirements are met. Turning to the discretionary factors under China Trade, we find that the District Court properly considered these factors, albeit under a different rubric, and found them supportive of injunctive relief.
a. The Threshold Requirements Are Met
It is undisputed that the first threshold requirement of China Trade is satisfied;
This argument is without merit. When KBC registered the Texas District Court's judgment confirming the arbitration award in the Southern District of New York, that judgment had the same effect, and was entitled to the same protection, as if it had been entered in the Southern District of New York in the first instance. See 28 U.S.C. § 1963 (stating that a registered judgment "shall have the same effect as a judgment of the district court of the district where registered and may be enforced in like manner"). The Southern District of New York was therefore empowered to take any action to protect the judgment confirming the Award that the Texas District Court could have taken. KBC did not need to return to Texas in order to protect and enforce the judgment. See Smith v. Woosley, 399 F.3d 428, 431-36 (2d Cir.2005) (affirming anti-suit injunction issued by Connecticut federal court to protect judgment rendered by Pennsylvania federal court); Covington Indus., Inc. v. Resintex A.G., 629 F.2d 730, 732 n. 2 (2d Cir.1980) (discussing power of court of registration to determine validity of judgment rendered in another federal district). Thus, we conclude that the "case before the enjoining court" includes all of the federal judgments related to the case, including (1) the Texas District Court judgment confirming the Award and (2) the judgments entered by the Southern District of New York enforcing the Texas District Court's judgment.
We also must examine whether the federal judgments that the Southern District of New York sought to protect were "dispositive" of the Cayman Islands action. We agree with KBC that the federal judgments satisfy the China Trade requirement because the Award, and the federal judgments confirming and enforcing it, actually decided the claims raised in the Cayman Islands action. We also conclude that the New York Convention permits the federal judgments to be treated as "dispositive" of the Cayman Islands action.
As discussed above, the Texas District Court confirmed, and the District Court enforced, an Award that was entered in a Swiss arbitration proceeding. These courts confirmed and enforced the Award against Pertamina even though, as discussed above, Pertamina had argued in the Swiss arbitration that the resource and development estimates prepared by KBC were fraudulent — the same allegation,
Pertamina argues that the Cayman Islands action is a proceeding "separate and independent of the arbitration proceedings and award." We, however, conclude that this characterization is inconsistent with the nature of the Cayman Islands action. Beyond seeking to vitiate the Award, the Cayman Islands action seeks a(1) determination that the District Court wrongfully ordered almost $319 million to be paid to KBC pursuant to the federal judgments confirming and enforcing the Award, and (2) return of all funds obtained by KBC "pursuant to the Arbitral Award (and its enforcement)."
We also conclude that, under the New York Convention, the federal judgments to be protected are "dispositive" of the Cayman Islands action. Pertamina essentially argues that the federal judgments could not be dispositive because (1) the federal courts involved in confirming and enforcing the Award within the United States were only acting as "secondary-jurisdiction court[s] under the Convention," Appellant's Br. 41 (quoting Fifth Circuit Injunction Opinion, 335 F.3d at 372 n. 59), and (2) secondary jurisdictions, under the New York Convention, are not entitled to protect judgments related to a foreign arbitral award from foreign interference In doing so, it relies on the Fifth Circuit's earlier opinion vacating the Texas District Court's anti-suit injunction. In that decision, the Fifth Circuit noted that, because the New York Convention contemplates multiple proceedings in several nations to procure and enforce a foreign arbitral award, it was not appropriate for a secondary-jurisdiction court "to protect KBC from all the legal hardships it might undergo in a foreign country as a result of this foreign arbitration or the international commercial dispute that spawned it." Fifth Circuit Injunction Opinion, 335 F.3d at 369.
We agree with the Fifth Circuit that federal courts should not attempt to protect a party seeking enforcement of an award under the New York Convention "from all the legal hardships" associated with foreign litigation over the award. But it does not follow, as Pertamina would have us hold, that a federal court cannot protect a party who is the beneficiary of a federal judgment enforcing a foreign arbitral award from any of the legal hardships that a party seeking to evade enforcement
In this case, the federal judgments reached a dispositive determination that KBC should be paid $319 million of Pertamina's funds, held in New York bank accounts, pursuant to the Award. This determination is entitled to protection from Pertamina's attempts to vitiate it through the Cayman Islands action. The existence of the federal judgments ordering Pertamina to turn over $319 million is one of the factors distinguishing the injunction issued by the District Court from the injunction against the Indonesian action, which was vacated by the Fifth Circuit in 2003. In 2003, the Texas District Court had only confirmed the Award, and there had been no definitive determination that KBC was entitled to the funds that Pertamina held in the New York bank accounts. By the time that the District Court entered the anti-suit injunction at issue in this appeal, however, additional federal judgments enforcing KBC's Award had been entered. As the District Court noted, those judgments "are not conditional, or qualified, or limited in any way as to KBC's rights with respect to the monies awarded" pursuant to the Award and the federal judgment confirming it. District Court Opinion, 465 F.Supp.2d at 300.
The nature of the Cayman Islands action that the District Court sought to enjoin also distinguishes the injunction at issue here from the injunction that was vacated by the Fifth Circuit. When the Fifth Circuit vacated the anti-suit injunction prohibiting litigation in Indonesia, Pertamina had an arguable — though ultimately meritless — basis for claiming that the Indonesian proceedings were permissible under the New York Convention. Under the Convention, a jurisdiction may decline to enforce a foreign arbitral award if it has "been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made." New York Convention art. V(1)(e). Pertamina argued that, because Indonesian substantive law applied to the dispute between the parties, an Indonesian court had the power to set aside or suspend the Award. See Fifth Circuit Confirmation Opinion, 364 F.3d at 308 (noting
Here, by contrast, the Cayman Islands has no arguable basis for jurisdiction to adjudicate rights and obligations of the parties with respect to the Award. Cayman Islands courts have no power to modify or annul the Award under the Convention; and Pertamina does not even attempt to argue that the Cayman Islands action is one that would be contemplated by the Convention. We conclude that in these circumstances the District Court had power to prevent Pertamina from engaging in litigation that would tend to undermine the regime established by the Convention for recognition and enforcement of arbitral awards. "[C]oncerns of international comity, respect for the capacities of foreign and transnational tribunals, and sensitivity to the need of the international commercial system for predictability in the resolution of disputes require that we enforce . . . agreement[s]" to submit disputes to binding international arbitration. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 629, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985). These considerations also require us to protect the regime established by the Convention for enforcement of international arbitral awards, if necessary by enjoining parties from engaging in foreign litigation that would undermine it.
b. The Additional China Trade Factors Support Issuance of an Injunction
As discussed above, where an anti-foreign-suit injunction is sought to protect a federal judgment, the additional China Trade factors will often favor issuance of an anti-suit injunction when the threshold China Trade requirements are met. Despite adopting a "more lenient" test, the
We turn first to the two additional factors that have been described as having "greater significance," China Trade, 837 F.2d at 36 — namely, whether the foreign action threatens the jurisdiction or the strong public policies of the enjoining forum. As in Paramedics, "[b]oth considerations are salient in this case." 369 F.3d at 654. China Trade held that "an injunction may . . . be necessary to protect the enjoining court's jurisdiction." 837 F.2d at 36; see also Paramedics, 369 F.3d at 654 ("An anti-suit injunction may be needed to protect the court's jurisdiction once a judgment has been rendered."). Here, an injunction is necessary because the Cayman Islands action threatens to undermine the federal judgments confirming and enforcing the Award against Pertamina, and may also undermine federal jurisdiction to determine whether prior federal judgments should be invalidated on the basis of the fraud alleged by Pertamina. Cf. Campaniello Imports, 117 F.3d at 661 ("Res judicata `does not preclude a litigant from making a direct attack . . . upon the judgment before the court which rendered it.'" (emphasis added) (quoting Weldon v. United States, 70 F.3d 1, 5 (2d Cir.1995))). The injunction is also supported by strong public policy considerations. We have noted "the strong public policy in favor of international arbitration," and the need for proceedings under the New York Convention "to avoid undermining the twin goals of arbitration, namely, settling disputes efficiently and avoiding long and expensive litigation." Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica, Inc., 403 F.3d 85, 90 (2d Cir.2005) (internal quotation marks omitted). These important objectives would be undermined were we to permit Pertamina to proceed with protracted and expensive litigation that is intended to vitiate an international arbitral award that federal courts have confirmed and enforced.
We also conclude that one of the three remaining additional China Trade factors — whether the foreign action would be vexatious — counsels strongly in favor of the injunction. China Trade noted that vexatiousness is "likely to be present whenever parallel actions are proceeding concurrently," 837 F.2d at 36. Proceedings are apt to be especially vexatious, however, where a foreign proceeding threatens to undermine a federal judgment. Here, the District Court expressly (and properly) found that "the entire point of the fraud allegations [of the Cayman Islands action] is to show that the Arbitral Award must be deemed to be vitiated — i.e., to be a nullity." District Court Opinion, 465 F.3d at 291. In other words, the District Court concluded that the subsequent litigation in this case, being aimed at the recovery by KBC in the federal courts, was entirely vexatious. As the District Court noted:
Id. at 300.
Finally, we note that comity considerations, though important, have "diminished force" when a court has already reached a judgment involving the same issues and parties. Paramedics, 369 F.3d at 655. Comity concerns have particular importance under the Convention; a federal court should be wary of entering injunctions that may prevent parties from engaging in post-award enforcement or annulment proceedings that are contemplated by the Convention. But comity concerns under the Convention have no bearing on our consideration of the Cayman Islands action, which is not a proceeding contemplated by the Convention and is, moreover, intended to undermine federal judgments. As we have stated, "orders of foreign courts are not entitled to comity if the litigants who procure them have `deliberately courted legal impediments' to the enforcement of a federal court's orders." Motorola Credit Corp. v. Uzan, 388 F.3d 39, 60 (2d Cir.2004) (quoting Societe Internationale v. Rogers, 357 U.S. 197, 208-09, 78 S.Ct. 1087, 2 L.Ed.2d 1255 (1958)); see also id. (noting that the District of Columbia Circuit, in Laker Airways, 731 F.2d at 939-40, refused to respect an English court's order where the "defendants involved in the American suit had . . . gone into the English courts to generate interference with the American courts"). Accordingly, comity concerns do not weigh against entry of an anti-suit injunction in this case.
In a supplemental letter brief requested by the Court, Pertamina asserts that, regardless of whether the District Court had the authority to issue an anti-suit injunction in the first instance, it now lacks jurisdiction to maintain the injunction because Pertamina has paid the judgment against it. Pertamina relies primarily on two Supreme Court opinions describing the boundaries of "ancillary jurisdiction," Kokkonen v. Guardian Life Insurance Company of America, 511 U.S. 375, 114 S.Ct. 1673, 128 L.Ed.2d 391 (1994), and Peacock v. Thomas, 516 U.S. 349, 116 S.Ct. 862, 133 L.Ed.2d 817 (1996), as well as the Eighth Circuit's recent decision in Goss International Corp. v. Man Roland Druckmaschinen Aktiengesellschaft, 491 F.3d 355 (8th Cir.2007), which vacated an anti-foreign-suit injunction imposed to protect a federal money judgment once the judgment was satisfied, see id. at 369.
"[T]he doctrine of ancillary jurisdiction . . . recognizes federal courts' jurisdiction over some matters (otherwise beyond their
511 U.S. at 379-80, 114 S.Ct. 1673. It also held that a federal court did not maintain ancillary jurisdiction to hear disputes over a settlement agreement that was not entered as an order of the court. See id. at 381-82, 114 S.Ct. 1673. In Peacock, the Court observed that it had "approved the exercise of ancillary jurisdiction over a broad range of supplementary proceedings involving third parties to assist in the protection and enforcement of federal judgments — including attachment, mandamus, garnishment, and the prejudgment avoidance of fraudulent conveyances," id. at 356, 116 S.Ct. 862, but noted that "recognition of these supplementary proceedings has not . . . extended beyond attempts to execute, or to guarantee eventual executability of, a federal judgment," id. at 357, 116 S.Ct. 862.
Goss involved an anti-suit injunction that was entered to ensure satisfaction of an antidumping judgment against a Japanese company. 491 F.3d at 358-59. New federal legislation repealed the antidumping statute under which the plaintiff in Goss had recovered, but did so only prospectively; in response, Japan enacted a law, the "Special Measures Law," that was intended to permit the defendant in Goss to seek return of the award in Japanese courts. See id. The district court entered an anti-suit injunction prohibiting an action from being filed under the Special Measures Law; after the injunction was issued, the defendant paid the federal judgment in full. See id.
Noting that "there [wa]s no longer an outstanding judgment to protect," the Eighth Circuit concluded the relevant "jurisdictional circumstances and comity concerns" now weighed in favor of ending the injunction. Id. at 368. With respect to comity, the Eighth Circuit concluded that (1) federal courts no longer had any direct interest in the matter and (2) because the Japanese government had passed the Special Measures Law, Japanese courts should have an initial opportunity to determine the enforceability of the Special Measures Law. See id. at 366-68. With respect to jurisdiction, the Eighth Circuit reasoned that, under Peacock, the district court retained ancillary enforcement jurisdiction only "until satisfaction of the judgment." Id. at 365 (citing Peacock, 516 U.S. at 356-57, 116 S.Ct. 862). It also noted that the All Writs Act, 28 U.S.C. § 1651(a), which permits federal courts to "issue all writs necessary or appropriate in aid of their respective jurisdictions," did not provide a source of jurisdiction to enter the anti-suit injunction. See 491 F.3d at 364-65; see also Syngenta Crop. Prot., Inc. v. Henson, 537 U.S. 28, 33, 123 S.Ct. 366, 154 L.Ed.2d 368 (2002) (stating that "the All Writs Act does not confer jurisdiction on the federal courts"). Nor did the Eighth Circuit find any other source of jurisdiction to support the anti-suit injunction.
Accordingly, we conclude that the District Court retained — and retains — continuing jurisdiction to maintain the anti-foreign-suit injunction even though the federal judgments against Pertamina have been satisfied. While an anti-foreign-suit injunction should not be made permanent absent a need for such relief, see, e.g., Ibeto Petrochemical, 475 F.3d at 65 (modifying injunction where there was "no need for the permanent injunction that the District Court seems to have issued"),
Although the injunction could be read to bar any other action related to the Award, the parties agree that the injunction does not bar confirmation proceedings currently underway in other nations. It would be inconsistent with our obligations under the Convention to bar goodfaith litigation over the Award in Switzerland, the jurisdiction with primary authority over the Award.
CONCLUSION
For the reasons stated above, the judgment of the District Court is affirmed as modified.
FootNotes
Id. at 368 (footnotes omitted).
Smith, 399 F.3d at 434 n. 8. We need not reach the question of whether the China Trade test would permit a federal court to protect the "full res judicata effect" of a federal judgment by enjoining claims that "while not litigated, arose from the same common nucleus of operative facts as the litigated claim," id., because the claims raised in the Cayman Islands action concerning the validity of the Award and KBC's entitlement to Pertamina's funds have actually been litigated in the Southern District of Texas and the Southern District of New York, even if Pertamina seeks to offer new facts in the Cayman Islands action in support of its position.
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