In Leidos Inc. v. Hellenic Republic, a security company (Leidos) hired during the 2004 Summer Olympic Games in Greece filed a petition in the U.S. District Court for the District of Columbia to confirm and enforce a 2013 arbitral award it had obtained against the Hellenic Republic, popularly known as Greece, for services rendered during the Games. The District Court stayed the case in order to wait for the completion of ongoing parallel litigation in Greece, in which the Hellenic Republic sought to set aside the award.

After the Greek Supreme Court entered its decision upholding the award in 2017, the parties were asked by the District Court whether the Greek decision would have any bearing on their positions in the U.S. litigation. The issue of currency conversion was not mentioned.

The District Court ruled in favor of Leidos and entered a judgment in euros, consistent with the currency identified in the agreement and in the Greek litigation.

Leidos then moved to convert the award into U.S. dollars using the exchange rate in effect on the date of the award. The District Court granted the motion under Rule 59(e) of the Federal Rules of Civil Procedure on the ground that the value of the euro had declined significantly against the dollar over the course of the litigation and reduced the value of the judgment by approximately $11.9 million. The Hellenic Republic appealed the conversion of the award to the U.S. Court of Appeals for the District of Columbia.

Reversing the District Court’s ruling, the Court of Appeals cited the Restatement of the Law Fourth, The Foreign Relation Law of the United States in its discussion about currency conversion in federal court. The Court of Appeals remanded the case with instructions to reenter judgment in euros in accordance with the award, holding that the District Court could not alter or amend the judgment under Rule 59(e), because it would not be “manifestly unjust” to preserve Leidos’s judgment in euros, given that Leidos contracted in euros, received its award in euros, and explicitly requested euros in its complaint and proposed orders, before reversing course post-judgment.

Below is the black letter of the relevant Section (previously § 420):

§ 490. Judgments Denominated in Foreign Currency

(1) If a foreign judgment orders payment in a foreign currency, a court in the United States recognizing or enforcing that judgment may issue its own judgment denominated either in that foreign currency or in U.S. dollars, unless State law requires otherwise.

(2) When entering a judgment denominated in U.S. dollars, a court in the United States will convert a judgment denominated in foreign currency to U.S. dollars using the exchange rate prevailing on the date of the U.S. judgment granting recognition or enforcement.

The Jurisdiction, Treaties, and Sovereign Immunity sections of the Restatement Fourth of Foreign Relations Law were approved in 2017. The Official Text will be available soon.

Pauline Toboulidis

The American Law Institute

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