KT Corporation, et al. v. ABS Holdings, Ltd., et al.

If a foreign company absconded with a U.S. strategic satellite, in the face of orders of our government mandating its return, no court would recognize an arbitral award declaring that move “perfectly lawful” and U.S. actions to recover it “unauthorized” and “poor and unacceptable.” But our courts enforced just such an award when it was the Republic of Korea’s national interests at stake. Korea declared the sale of a geostationary satellite by KT Corporation and KTSAT Corporation (“KTSAT”) to ABS Holdings, Ltd., and ABS Global, Ltd. (“ABS”), null and void, unwound it, and imposed corrective actions. Despite these enforcement actions, however, ABS forcibly wrested control of the satellite, flew it to a different orbital location, and used it to attack Korea’s national interests. When the parties then arbitrated commercial disputes, the tribunal declared Korea’s actions lacked “credibility,” were “ultra vires,” and violated U.S. due process standards. On those grounds, it awarded ABS title to the satellite and enjoined KTSAT from complying with Korea’s enforcement actions. The District Court and Court of Appeals enforced the award. The question presented is thus: Does the doctrine of international comity bar our courts from enforcing arbitration awards that are based on a tribunal’s conclusion – in excess of its limited mandate to resolve contract issues – that a foreign government violated its own laws?