Sigma Constructores SA, a leading construction and engineering firm, is calling for the enforcement of a $31 million arbitral award against the Republic of Guatemala in the U.S. District Court for the District of Columbia. The firm filed its petition for enforcement after Guatemala failed to meet financial obligations stemming from three contracts for road and infrastructure construction projects in the country.
Sigma Constructores argues that the U.S. federal court is the appropriate venue to resolve the dispute, rejecting Guatemala’s claim that the issue is purely domestic and unrelated to the United States. The company strongly disagrees with Guatemala’s request for a stay in proceedings and the multiple objections it has filed, citing an ongoing series of collateral litigations in Guatemala. Sigma contends that these objections are unavailing and should be dismissed.
In a statement issued Thursday, Sigma expressed support for the U.S. Magistrate Judge Moxila A. Upadhyaya’s recommendation to enforce the arbitral awards. On February 13, Judge Upadhyaya recommended confirming and enforcing the $31 million award, dismissing Guatemala’s claims of sovereign immunity and international comity defenses, which are typically used to prevent the enforcement of foreign judgments in the U.S.
“Sigma respectfully urges this Court to adopt Magistrate Judge Upadhyaya’s well-reasoned recommendations in full. The firm is prepared to address any opposition to the petition on the merits,” Sigma’s legal counsel stated.
The dispute arose after Sigma Constructores prevailed in arbitration, where Guatemala was ordered to pay over 245 million Guatemalan quetzals (approximately $31.5 million) due to the country’s bad faith actions and undue delays in resolving the disputes. These arbitral awards were issued in 2019 and 2021.
Guatemala had previously filed a motion to dismiss the case, arguing that the underlying dispute was a domestic matter and that the D.C. federal court was not the appropriate forum for enforcement. The country referenced a 2011 Second Circuit ruling that supported dismissing cases with purely domestic arbitrations under the doctrine of forum non conveniens. However, Judge Upadhyaya rejected this argument, concluding that Guatemala’s reliance on this case was not convincing.
Sigma’s legal team, led by Jonathan C. Cross and Daniela Paez from Herbert Smith Freehills LLP, is committed to ensuring the enforcement of the arbitral awards. On the other side, Guatemala is represented by Carlos Ramos-Mrosovsky, Paul M. Levine, Fabian A. Zetina Vasquez, and Jillian E. Timko from BakerHostetler.
