Ilyich Mariupol Iron and Steel Works v. Argus Developments Inc.

Filing 13

MEMORANDUM ORDER re 2 MOTION to Confirm Arbitration Award and Entry of Judgment is GRANTED; 11 MOTION for Default Judgment as to Argus Developments Inc. is GRANTED; the Final Award of the Tribunal on Plaintiff's behalf against Defendant is HEREBY CONFIRMED; the Clerk of Court shall enter judgment in favor of Plaintiff and against Defendant in the amount of $5,613,505.40. Signed by Judge Leonard P. Stark on 3/26/13. (ntl)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
ILYICH MARIUPOL IRON
AND STEEL WORKS,
Plaintiff,

v.

Civ. No. 12-00832-LPS

ARGUS DEVELOPMENTS INC.,
Defendant.

MEMORANDUM ORDER
Pending before the Court are Plaintiffs Motion to Confirm Arbitration Award and Entry
of Judgment (D.I. 2) and Motion for Default Judgment (D.I. 11). For the reasons set forth below,
the Court will grant both motions.

I.

BACKGROUND
This is an action to confirm a foreign arbitration award pursuant to the Federal

Arbitration Act, 9 U.S.C. §§ 9, 207, and the Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, Art. IV, Jun. 10, 1958,21 U.S.T. 2517, 330 U.N.T.S. 38. (See D.I. 11
at 1)
Plaintiff Ilyrich Mariupol Iron and Steel Works ("Plaintiff' or "Ilyich") is a Ukranian
corporation with its principal place ofbusiness in Mariupol, Ukraine. (See D.l. 3 at 1)
Defendant Argus Developments Inc. ("Defendant" or "Argus") is a Delaware corporation with its
principal place ofbusiness in Mariupol, Ukraine. (See id.) On December 2, 2009, Ilyrich and
Argus entered into a contract for the sale of steel to Ilyrich. (See id.; D.l. 4 at 4-19) Ilyrich

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alleged breach of contract by Argus, and on January 4, 2011, Ilyich filed a demand for arbitration

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before the International Court of Arbitration (the "ICAC") at the Ukranian Chamber of
Commerce and Industry in Kiev, Ukraine. (See D.I. 3 at 1-2) On June 30, 2011, Ilyrich was

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awarded $5,234,059.90 (the "Award") 1 by the ICAC. (See id.; D.I. 4-1 at 17-22)
On June 29, 2012, Ilyrich filed a Motion and Petition to Confirm Arbitration Award,

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along with an opening brief and declaration. (See D.I. 1, 2, 3, 4) On July 25,2012, Ilyich
effectuated service on Defendant Argus, but Argus failed to answer the petition or to enter an
appearance. (See D.I. 9 at 1; D.l. 9-1 at 2) On August 15,2012, Ilyrich requested the entry of
default against Argus pursuant to Federal Rule of Civil Procedure 55(a), and default was entered
on September 11,2012. (See D.I. 8, 10)
On September 18,2012, Ilyrich filed its motion for default judgment, pursuant to Federal
Rule of Civil Procedure 55(b)(2), requesting that the Court enter a default judgment against
Argus confirming the Award plus $379,455.50 in interest, for a total of$5,613,505.40 (the
"Award plus Interest"). 2 (See D.I. 11 at 2; D.l. 12 at 1-2; D.l. 12-1)

II.

LEGALSTANDARDS
Pursuant to Federal Rule of Civil Procedure 55(b)(2), the Court may conduct an inquest

into the amount of damages to be awarded following the entry of a default judgment. A party
who defaults by failing to plead or defend does not admit the allegations in the claim as to the

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The final award totaled $5,234,059.90, which includes breach of contract damages and
arbitration costs. (See D.I. 3 at 2)
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Plaintiffrequests that $379,455.50 be added to the Award for post-award, pre-judgment
interest payments on the A ward accruing as of the date of the A ward, compounded daily through
the date of filing the Motion (September 18, 2012). (See D.I. 11 at 2; D.l. 12 at 1-2; D.l. 12-1)
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amount of damages. See Fustok v. Conticommodity Servs., Inc., 873 F.2d 38,40 (2d Cir. 1989).
Thus, the Court must ensure that there is basis for damages awarded. See id.; see also Anheuser-

Busch, Inc. v. Philpot, 317 F.3d 1264, 1266 (11th Cir. 2003) (holding that court has obligation to
ensure there is legitimate basis for any damages award); Sierra Foods, Inc. v. Haddon House

Food Prods., Inc., 1992 WL 245847, at *16 (E.D. Pa. Sept. 22, 1992) (observing that "inquest"
into damages is necessary to be certain that "damages bear a reasonable relationship to the
injuries alleged and established by the facts").

III.

DISCUSSION
Having reviewed the arbitration and litigation history of this action, the Court will grant

Plaintiffs motions to confirm the Award plus Interest and enter default judgment against
Defendant. Ilyrich sought arbitration pursuant to section 13 of its sales contract with Argus. (See
D.I. 4 at 14-15) Despite being properly informed about the proceeding, Argus did not participate
in arbitration, and the arbitrator rendered the Award for Ilyrich. (See D.I. 1 at 2-3) As Argus is a
Delaware corporation, Ilyrich requested that this Court confirm the Award. Despite being
properly informed and served, Argus has failed to participate in this action. (See D.I. 7; D.I. 9-1;
D.I. 11 at 1-2) The Clerk of the Court, thus, appropriately entered a default against Argus on
September 11, 2012. Pursuant to Rule 55(b )(2), entry of a default judgment in the amount of the
Award plus Interest is now warranted.
IV.

CONCLUSION
Accordingly, IT IS HEREBY ORDERED THAT Plaintiffs Motion to Confirm

Arbitration Award (D.I. 2) and Motion for Default Judgment (D.I. 11) are GRANTED. The
Final Award of the Tribunal on Plaintiffs behalf against Defendant is HEREBY CONFIRMED.

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The Clerk of the Court shall enter judgment in favor of Plaintiff and against Defendant in the
amount of$5,613,505.40.

UNITED STATES DISTRIC

March 26, 2013

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