Hardin Investments Ltd. v. Globex Kosher Foods et al

Filing 20

MEMORANDUM DECISION AND ORDER dated 1/27/16 that plaintiff's motion to confirm the arbitration award is granted. Judgment in favor of plaintiff and jointly and severally against defendants in the amount of $1,450,161.93, provided, however, that no post-judgment interest shall accrue on this judgment. ( Ordered by Judge Brian M. Cogan on 1/27/2016 ) *Forwarded for jgm. (Guzzi, Roseann)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
----------------------------------------------------------HARDIN INVESTMENTS LTD.,
Plaintiff,
- against GLOBEX KOSHER FOODS, a/k/a GLOBEX
KOSHER FOODS, INC., INTERNATIONAL
GLATT a/k/a INTERNATIONAL MEAT
PROCESSING CORP. and ABRAHAM
CHAIMOVITZ,
Defendants.
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MEMORANDUM
DECISION AND ORDER
14 Civ. 5890 (BMC)

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COGAN, District Judge.
Plaintiff financed the importation of Kosher beef by defendants, the sale of which was
supposed to pay off the financing. The product was stored in plaintiff’s name so as to maintain
its security interest but defendants had access to the product so that it could be sold. Plaintiff
commenced this diversity action alleging that defendants had failed to account for its sales of the
product and to repay the financing, and that they owed plaintiff $1,623,508.44. Defendants
moved to compel arbitration before a Beth Din pursuant to an arbitration clause in the parties’
agreement and I granted that motion over plaintiff’s objection. Prior to commencing the
arbitration, the parties entered into a submission agreement which further defined the scope of
the arbitration.
Plaintiff then substantially prevailed in the arbitration and has now moved to confirm the
award in the amount of $1,450,161.93. Its award, entitled “Rabbinical Court Ruling,”
specifically references this litigation: “Re: claim about debt, and the lawsuit filing in secular

court, no. 14-cv-5890-BMC.” As translated from the Hebrew, it specifically found the
following:
1. The loan sum was $1,653,361 and the payments [sic] sums were $203,199.07.
2. Being that a Heter Isska [literally, “agreement for interest,” i.e., a separate
agreement to pay interest, which is required under Halachic law] was indeed not
entered into . . . it is prohibited to pay/receive any interest on the loan amount.
3. Therefore, the installments they [defendant] provided [paid] goes on account of
the principal, and Party B [defendants] must pay the sum of $1,450,161.93;
accordingly, Party A must act to correct the judgement [sic; should be translated
as “demand”] in secular court to this sum, and that going forward, no interest
should be added.
4. Going forward, it is appropriate for Party B to arrange for a proper and correct
Heter Isska . . . .
5. Over any dispute relating to the above, the parties shall return to Rabbinical
Court.
Defendants oppose the motion to confirm on two grounds, neither of which have merit.
First, defendants claim there is no jurisdictional grant in the arbitration agreement to permit entry
of judgment and one is required under the Federal Arbitration Act, 9 U.S.C. §§ 9 et seq.
However, the submission agreement provides that “[t] parties submit themselves to the personal
jurisdiction of the State of New York and/or in any court of competent jurisdiction for any action
or proceeding to confirm or enforce a decree of the arbitrators pursuant to Article 75 of the New
York Civil Practice Law and Rules.” Since diversity is present here; this Court is a “court of
competent jurisdiction;” and the transaction indisputably affects interstate and indeed
international commerce, the parties’ agreement to this provision is sufficient to invoke the FAA
and permit confirmation of the award. See Paley Assocs., Inc. v. Universal Woolens, Inc., 446
F. Supp. 212 (S.D.N.Y. 1978).

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Defendants’ second argument is that they have moved before the Beth Din to allow a
payout over time of the award rather than having to pay it at once, and the arbitrators have
agreed to hear that request. However, the definition of a confirmable award under the FAA is
based on whether the award is final, and “an award is final if it resolves the rights and
obligations of the parties definitively enough to preclude the need for further adjudication with
respect to the issue submitted to arbitration.” Ecopetrol S.A. v. Offshore Expl. & Prod. LLC, 46
F. Supp. 3d 327, 336 (S.D.N.Y. 2014) (citing Rocket Jewelry Box, Inc. v. Noble Gift Packaging,
157 F.3d 174, 176 (2d Cir.1998) (per curiam)). Since the arbitrators’ award is final, defendants’
argument presents no impediment to confirming the award. Indeed, the arbitrators clearly
contemplated confirmation of the award, as they directed plaintiff to return to this Court and
amend the ad damnum clause in the complaint so that interest would not be awarded.
Whether the Beth Din, having rendered its final award, retains authority to impose a
payment schedule, see generally, T. Co. Metals, LLC v. Dempsey Pipe & Supply, Inc., 592 F.3d
329, 342 (2d Cir. 2010) (“The functus officio doctrine dictates that, once arbitrators have fully
exercised their authority to adjudicate the issues submitted to them, their authority over those
questions is ended … .) (internal quotation omitted), and, if so, whether this Court should enter
an Order limiting execution of the judgment in accordance with a payment schedule, are not
matters presently before me.

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Plaintiff’s motion to confirm the arbitration award is granted. The Clerk is directed to
enter judgment in favor of plaintiff and jointly and severally against defendants in the amount of
$1,450,161.93, provided, however, that no post-judgment interest shall accrue on this judgment.
SO ORDERED.

Digitally signed by Brian M.
Cogan
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U.S.D.J.
Dated: Brooklyn, New York
January 27, 2016

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