CBF Industria De Gusa S/A et al v. Amci Holdings,Inc., et al

Filing 46

OPINION re: 19 MOTION to Dismiss filed by K-M Investment Corporation, Prime Carbon GMBH, Primetrade,Inc., American Metals&Coal International,Inc., Amci Holdings,Inc.: Based on the conclusions set forth above, the Defendants' motion to dismiss the Complaint is granted and the Complaint is dismissed. Plaintiffs are granted leave to replead within twenty days. (Signed by Judge Robert W. Sweet on 4/9/2014) (tn)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK

--------x

1 '

CBF INDUSTRIA DE GUSA SIAl, DA TERRA
SIDERURGICA LTDA, FERGUMAR - FERRO GUSA
DO MARANHAo LTD, FERGUMINAS SIDERURGICA
LTDA, GUSA NORDESTE SIA, SIDEPAR ­
SIDERURGICA DO PARA SA, and SIDERURGICA
UNIAo SIA,
Plaintiffs,
13 Civ. 2581
against ­
OPINION
AMCI HOLDINGS, INC., AMERICAN METALS &
COAL INTERNATIONAL, INC., K-M INVESTMENT
CORPORATION, PRIME CARBON GMBH,
PRIMETRADE, INC., HANS MENDE, and FRITZ
KUNDRUN

Defendants.

--------------------- --x
A P PEA RAN C E S:
Atto

for the Plaintiffs

NORTON ROSE FULBRIGHT
666 Fifth Avenue
New York, NY 10103
By:
David L. Barrack, Esq.
James Nespole, Esq.
Jami Mills Vibbert, Esq.
David B. Schwartz, Esq.

Attorneys for the Defendants
BUCHANAN INGERSOLL & ROONEY, P.C.

1290 Avenue of the Americas, 30th Floor

New York, NY 10104

By:
Stuart P. Slotnick, Esq.

BUCHANAN INGERSOLL & ROONEY, P.C.
One Oxford Centre, 30th Floor
301 Grant Street
ttsburg, PA 15219
By: Kevin P. Lucas, Esq.
Bruce A. Arne cus, Esq.
exandra P. West, Esq.

ii

Sweet, D.J.

De

ndants

AMCI

1,

American Metals & Coal Internat
K-M

Investment

"Corporate
Kundrun

Corporation
rade,

Pr

Carbon") ,

("Kundrun")

("K-M"),

and

s

the

es

Federal

doctrines

Do

Nordeste

Maranhao
S lA,

Si

("Mende")

conveniens

as
and

("Prime

(collectively,

12(b) (3)

Pro

and

the
Fritz

Defendants",
have moved

and 12(b) (6)

well

as

under

international

of
the

comity

ss the Complaint of Plaintiffs CBF Industria
), Da Terra Side

de Gusa S/A ("

GMBH

the "Defendants")

12(b) (2),

Civil

non

abstention to di

Gusa

12(b) (1),

of

Carbon

the "Individual

(collect

of

Mende

Holdings"),
can Metals"),

Inc.
Prime

Hans

and with the Corporate Defendants,
pursuant to Ru

("AMCI

(" Primetrade")

Inc.

Defendants")

Inc.

Holdings,

Ltda,
r

Ferguminas
Siderurg ica

Siderurgica Uniao S/A (collectively, "

For the reasons set forth

ica Ltda,

Fergumar

Siderurgica
Do

Para

S IA

Ltda,
("Gusa")

Ferro
Gusa
and

aintiffs")

low,

Defendants' motion is

smissed in part and granted in part.

I.

Prior Proceedings

This

action

was

commenced

1

on

1

18,

2013

with

ling

Plaintiffs'

of

the

The

Complaint.

Complaint

seeks

enforcement of an arbitral award pursuant to 9 U.S.C. § 207 and
alleges fraud and conspiracy to defraud against all Defendants,
constructi ve

fraudulent

trans fer

pursuant

Law §§ 273-275 and 276 against
and aiding

and abetting
(Compl.

Primetrade.

~~

to

N. Y.

Debt.

Cred.

Prime Carbon and AMCI Holdings

fraudulent

transfer

against

Mende

and

100-03.)

The Defendants filed the instant motion to dismiss the
Complaint on July 30,

Oral arguments were

2013.

ld,

and the

motion was marked fully submitted, on October 30, 2013.

II.

Allegations of the Complaint

The

following

cts,

assumed

to

be

true,

are

taken

from the Complaint.

The Complaint
under

the

Convention

on

Foreign Arbitral Awards
alleged
debtor,
was

alter

Paris")

by

the
(the

the

to enforce a
Recognition

foreign
and

and

successor-in-interest
AG

("SBT").

International
"ICC

to

of

against the
the

award

The foreign arbitration

Chamber

Arbitration")

2

arbitration

Enforcement

(the "New York Convention")

Steel Base Trade,

conducted

(" ICC

egos

seeks

of

Commerce

which

Paris

issued

an

arbitration award ("Award
Plaintiffs
that

against

the

in excess of $48 million in favor of

U
)

(Compl

SST.

Individual

Defendants

The

1.)

<J[

dominated

Complaint

and

alleges

controlled

the

Corporate Defendants and fraudulently transferred the business,
assets and most, but not all, of the liabilities of SST to Prime
Carbon,

thereby

Award.

t

the

rendering
Plainti

(Id. )

Individual

SST

Defendants

insolvent

to

undergone

a

satis

first time

this is not

saIl
had

and unable

scheme

to

defraud

creditors.

P~ainti££s'

Contracts With SBT

aintiffs are compa

es organiz

and with their offices located in,

Brazil,

under the laws of,
and they produce and

supply pig iron, an intermediate metal rna
with

a

hi

further

carbon

refined

(Compl.

fuel.

through

steel or wrought iron.

melting

<J[

and

by smelting iron ore

25.)

g

blending

processes

iron

can

into

(Id. )

Plaintiffs began selling pig iron to Primetrade AG,
Swiss
(Id.

company and predecessor to
1(

26.)

be

SBT,

over

fifteen

years

Primetrade AG supplied a portion of this

to its U.S. subsidiary, Primetrade.

3

(Id.1(28.)

a

ago.

g iron

Primetrade
ion on a

exp

AG

bulk carrier

Colombia, a bulk carrier,

<J[

the

master

and

The YTHAN

29.)

the YTHAN,

five

crew

about April

of

benefit

causing the death

the

(CompI.

vessel.
the

benefit of

loss of life and cargo on
rred its business to SBT on or

2005 and began operating with the same officers

6,

and directors as and at the same offices as Primetrade AG.
<J[

At that time,

30.)

Sil
Gusa

0

Moreira
that

inability
business

would
time

("Moreira")

to

AG

obtain

(Id. )

the

had

to

representative of CBF and

change
and

igation

and

just

under

a

di f

SBT continued to

On or about
("AMCI International"),

USA.

(Compl.

October 5,

out

31.)

rent

due

to

its

continue

of

name,

contract

the

its

vessel

and

for

for

the

some

sale

of

(Id. )

AMCI

2007,

International

GmbH

a company owned and controlled by Mende

purchased SBT and its
<J[

name

otherwise

arising

pig iron in the same manner as before.

and Kundrun,

its

Moreira assured Plaintiffs that the business

same,

Plaintiffs

informed a

financing

1

following

(Id.

Primetrade AG's representative in Brazil,

Primetrade

explosion.

of

f the coast of

supplied for

Following

Primetrade AG trans

the

2004,

exploded,

members

cargo was being

( Id. )

Primetrade AG.
the YTHAN,

for

ca

On or about February 28,

Primetrade AG.

of

carrying

an

following

2004

SBT

became

Moreira,

4

U. S.

then

an

subsidiary,
SBT

Primetrade

employee,

told

a

-------~----.-

January 1,

2008 and September 17,
"AMCI Family")

owned by t

2008,

Between

(Id. )

of CBF and Gusa of the purchase.

representat

Plaintiffs and SBT

(now

o ten separate contracts

entered

the sale and purchase of 103,500 metric tons of pig iron to
SBT

for

total

consi

rat

signatories.

(Id.

'Jl 34.)

none

(Id.

'Jl 35.)

over

Plaintif

allege that

of

four

are

of the

pig iron in t

United

scheduled time of shipment of the pig

iron was from April 2008 through December 1, 2008.

Each

$76 million

Defendants

of

r delivery of t

ten Contracts provide

of

Only Plaintiffs and SBT are the

Contracts!

signatories

iffs

Pla

• 'Jl 32.)

(the "Contracts").

States.

to

the

contracts

contained

(Id.

the

'Jl 36.)

following

arbitration provision:

All
sputes arising in connection with the present
contract
11 be f
lly settled under t
rules of
Concil
ion and Arbitrat
of the
International
Chamber of Commerce, Paris, by one or more arbiter,
appointed in accordance
th said rules.

(Id.

'Jl 37.)

SBT

ially purcha

under the Contracts.
market

However,

pig iron fell,

33,056 metric tons of pig iron
after purchasing

is amount the

and SBT stopped its purchases.

5

( Id.

By October 2008,

'Il 39.)

defaul t

SBT was

of the Contracts.

( Id. )

When

contacted

by

Plaintiffs

regarding

fault,

the

an e-mail dated November 20, 2008:

Defendants stated

You know our group and
is not our style to walk
away from obligations.
. We will need a long time
to work this out together.
My message to your group
is:
we are not walking away! ! !

'Il 40.)

(Compl.
to
(Id.

in

'Il

It

41.)

er del

But a

ry of this e-mail,

did

not

purchase

was

purchasing pig

and

Instead,

SBT

suppliers at this time.

any

SBT continued

further
iron

g

iron.

from

other

(Id. )

Plaintirrs Initiate The ICC Arbitration

On September

2009,

11,

Plaintiffs

sent

notice

to

SBT

regarding the outstanding amounts due and proposed a negotiation
pr
SBT

to submitting the
requested

notice,

an

extension

purportedly

to

related issues.

(Id.

time

to

to

respond

of

assess

'Il 43.)
the

(Id.

spute to the ICC Paris.
t

to

and

respond

evaluate

to

the

'Il 42.)

PIa

iffs'

Contracts

and

Plaintiff agreed to extend SBT's

notice

until

6

October

5,

2009.

(Id.

Unbeknownst to P

:IT 44.)

its

assets,

operations

including
continued

Mende-

and Kundrun-

assets

caused

SBT

intiffs, SBT was at the time unloading
asset

Pr

proceed

to

under

Prime

to become

default of the Contracts.

unable

(Id.

ss

anot

unloading of
y

to

Plaintiffs

for

r
SBT
its

:IT 43.)

October 5,

After t

Carbon,

company.

controll

Bus

rade.

rna

its

ssed,

2009 deadline

Plaintiffs

filed a Request for Arbitration with the ICC Paris on November
16,
Arb

(Compl.

2009.
ration

Request

by

q[

45.)

requesting

for Arbitration,

SBT

an

sought

extension

of

which caused the

SBT's deadline to answer to January 27,

to

delay

time
ICC

ICC

answer

to

the

the

Paris
(Id.

2010.

to extend
46.)

q[

SBT

initially participated in and indicated its intent to defend on
the merits the liability and damages claims asserted in the ICC
Arbitration,
PIa

iffs'

and

in

January

2010,

Request for Arbitration

tration

Answer

asserted

that

SBT

filed

an

Answer

("Arbitration Answer").
Plaintiffs

had

to
The

temporarily

stopped production of pig iron and accordingly "were not able to
del
[SBT]

r

[SBT]
for

with pig iron" and that they "ha[d]

one

year

as

they

knew

their contractual obligation to
g iron to

[SET]

due to a (n)

shortage in the production of

[]

that

they

not contacted

could

deliver t

7

(Award

Ifill

agreed amount of

(at least temporary)
g iron."

not

q[

stop of or

13.)

As
its

first

the

ICC

purchase

Arbitration
of

pig

( Comp 1.

continued,

iron

in

47.)

the

Prime

Carbon

Brazilian

made

market

on

that this purchase

Conce

January 11,

2010.

repres

an attempt by SBT to evade its obligations under the

Contracts,

Plaintiffs

attention
sent

a

of

the

letter

ICC

to

<J[

brought

the

Paris.

On

the

ICC

Paris

information
January

in

15,

it

had

2010,
that

rming

to

the

Plaintiffs
SBT

may be

transferring its business operations and assets to Prime Carbon
and requested SBT provide a guarantee in the amount being sought
in

the

arbitration.

advised

that:

(i)

International
owners

of

Prime

Prime

(SBT's

of SBT)

Prime Carboni

(Id.

was

the

In

48.)

Carbon

parent);

(iii)

Carboni

<J[

had

(ii)

the

letter,

the

same

Mende

(one

Plaintiffs

address

as

of

ultimate

the

AMCI

President of the Board of Directors of

former directors of SBT were now directors

and

(i v)

SBT

had

discontinued

its

web

site.

(Id. )

On

January

letter to ICC Pa

25,

2010,

SBT

responded

to

aintiffs'

s:

It is true that the website www.steelbasetrade.com
shut down at the beginning of January 2010 [.J
reason is that the Respondent first has to analyze
pos ion regarding pending or imminent claims
damages from purchasers as well as against suppl

8

was
The
his
for
rs

as well as his financial situation [.]
Therefore, the
Respondent has at least temporarily suspended his
bus
ss
acti vi ties.
Please
note,
however,
the
Respondent is still exist
and has not resolved to
dissolved and liquidated.

( Comp 1.

49 . )

tj]

spite

Sut

sentation

its

Plaintiffs in January 2010,

to

the

ICC

Pa

sand

SST had earlier signed an agreement

transferring its business assets to Prime Carbon on December 27,
50.)

also

sent

letters to various of its pig iron suppliers on January 18,

2010

(Id.

"Transfer Agreement").

2009

(the "January 18, 2010 Letters")
November
re

30,

ive

title

Carbon was
Carbon
Goods";

"t

of

and

SST
the

all

(iv)

between

the

your

suppliers

instruction of
Carbon
days."

would be
(Id.

("Herzig"),

transferred

tj]

with

(Id.

"to

Prime

tj]

act

[SST]

from

and that

contacting the

Goods

as of

and

the

(ii)

Goods";

(iii)

to

lling

51.)

(i)

Carbon;

respect

"is

company and

Prime Carbon"

52.)

to

"all

owner of

Carbon

SST

informing them that:

Goods"

rights

Prime

same conditions."

advised

had

new and so

"assumes

contracts
the

2009,

tj]

transferred

to

and

enter
to

time

the

being

representatives

suppliers

Pr

into

all

perform under

Additionally,
the

Prime

"wi thin

the

letters
only
of

on

Prime

next

few

The letters were signed by Stephan Herzig

the only remaining director of SST on behalf of SST;

9

(Id.

would later become a director of Prime Carbon.

Herz
P

53. )

did not receive the January 18, 2010 Letters or

intif

any other communication from Prime Carbon.

(Id.

55.)

<J[

The Transfer Agreement was signed by Herzig,
and

Thomas

Buerger

(UBuerger"),

a

former

as

a

SBT and

Carbon designated

"single entity

Ilion

al Of

, who signed on behalf of Pr

Capital at the t

assets

million of liabil

succession."
to

Prime

Primetrade,

SBT's

transfe

through

U.S.

trans

r

cer of AMCI
Carbon.

rred

$126

along

with

$130

SBT's most valuable asset,
was
of

one

the

of

the

1,000

assets

s
(Id. )

Carbon

presumably

in

policies

and

continue
assets,
(Id.

assumed
s

SBT's

bus

ss;

including

cars

bank

its
and

lines,

insurance
computers,

were

also

of

s

Primetrade's Common Capital Stock to Prime Carbon.
also

(Id.

trans

$1,

ary,

a

It

Carbon

subsi

SBT,

Transfer Agreement

(Id. )

lJI 57.)

ies.

for SBT,

director

director of Prime Carbon and the Chief Finan

lJI 56.)

<J[

Prime

order

to

physical

trans

lJIlJI 59-60.)

Five
Carbon.
employment

(Id.

directors
lJI

64.)

contracts.

of

SBT

came

Prime Carbon also

.)

Mende

was

directors

of

Prime

assumed ten of SBT's
the

President

of

the

Board of Directors of Prime Carbon and controlled Prime Carbon

10

during

the

riod;

trans

Carbon

Pr

(Id.

ultimately owned by Mende and Kundrun.

to AMCI Holdings,

anot

control

of

and

allege

that

(Id.

Mende

on

at

all

Defendants

65.)

<Jl

times

Carbon to transfer the shares of Primetrade

later caused Pr

hurdles

was

this
any

r

U.S.

company under the ownership and

Kundrun.

transfer

creditors

(Id.

was
from

done

Plaintiffs

67,68.)

<Jl<Jl

to

place

juris

ctional

obtaining

SBT's

former

assets.

67.)

<Jl

On or around April 28, 2010, SBT informed the Cantonal
Court

of

(CompL

<Jl

the
74;

Canton

of

Zug,

RUd DecL

of Zug de

Carbon's

(Compl.
minutes

transfer of money.
director

&

2010,

Herzig,

deposit

s

Switzerland.

2010,

nor

passed a

balance

<Jl

Subsequently,
administrator,

sought

transfer

SBT's

0011. )

resolution
to

minutes

agreement

That same day,

SBT,

Prime

explained

s

through its s

providing

the

nor

that

bankruptcy

SBT

would

judge

in

8.)

SBT,
a

insolvency.

One day prior to the filing for

sheet

(Jbrg Aff.

at AOOOOl

Neither

any

(Id. )

1,

s

SBT transferred CHF 15,000 to Prime

75.)

<Jl

Ex.

of

the Cantonal Court of the Canton

ared SBT bankrupt.

bankruptcy, April 28,
Carbon.

4

<Jl

lowing day, April 30,

Switzerland,

stay

through
of

11

the

the

arbitration

bankruptcy
proceedings

pending before the

ICC Pari s

on June 10,

(CompI.

did not rule on this request at that time.
bankruptcy

administrator

December 15,

its

informed

ICC

~I

(Id.

the
did

wish

.) ,

Arbitration

SBT's

78.)

Tribunal

not

that

to

77.)

Cf[

for

a

The

stay

ICC Arbitration

bankruptcy
ims

t

bankruptcy

on

("ICC

administrator

bankrupt

the

defend

the

as

request
the

2010 to the tribunal

Tribunal") .

creditors

renewed

The ICC Paris

2010.

estate
in

the

administrator

and
ICC
had

determined that the estate did not have the funds to defend SBT
or pay any potential award
A00027. )
SBT

(J6rg Aff.

Cf[

16; Rud Decl. Ex.

6a at

Defendants contend that Swiss bankruptcy law precluded

from defending

or

continuing to

fend

aga

st

any

claims

that had been previously asserted against SBT,

including the ICC

Arbitration.

the

( De f .

Br .

at

10.)

denied the stay request and moved

Ul timately,

ICC Tribunal

rward with the arbitration.

With the denial of the stay request, t

administrator

pursuant to Swiss law asked SBT's creditors if they would like
to proceed in the
23,
None

2011.
of

(See

SBT's

Arbitration

as

ICC Arbitration on SBT's behalf on February

J6rg

creditors
no

assets

(See J6rg Aff.

'II 18 . )

admitted

claims

the

f.

iJl

17;

Rud Decl.

Ex.

sought

to

defend

existed

to

6a at AOOO29.)

SBT

distribute

in
to

the

ICC

creditors.

As a result, the bankruptcy administrator
against

SBT

12

by

Plaintiffs

in

the

ICC

tration,

as well as the damages sought by Plaintiffs in the

amount of CHF 51,756,269.75.
The

the

ely $4.0-$5.0 million claims of another SBT creditor,

approx

Progress Rail,

fore the Cantonal Court of the

in proceedings
(Def. Br. at 11.)

Canton of Zug.

Plaintiffs made

1

several

requests

23,

2010

petition

for

ICC Tribunal

to t

s assets trans

action with regards to SBT and
tration.

Prime Carbon throughout the a
June

21; Rud Decl. Ex. 8.)

~

clined to defend against

Zug Bankruptcy Office also

to ta

f.

(Jbrg

Interim

rred to

Plaintiffs submitted a

or

Conservatory

Measures

under Article 23 of the International Chamber of Commerce Rules
(" ICC

Rules")

alleging

wrongful

asset

transfers

and

requested

the ICC Tribunal grant them relief allowing them to seize assets
held
~

either

SBT

or

in

name

of

Prime

Carbon.

In follow-up correspondences and memorandums,

22.)

speci

by

cally

requested

that

the

ICC

Tribunal

(Award

Plaintiffs

"recognize

existence of fraudulent acts" as a basis upon which Plaintiffs
might re

the assets of third parties

as illegal the fraud

rpetrated by

(id.

[SBT],

~

25),

"recognize

which shall then be

Progress Rail co~menced ~n
2012 in Switzerland civil proceedings
against former SET director
(the "Progress Rail Action").
(Def. Br.
at 15.)
The
s Rail Action
that Her
formulated a scheme to
transfer the main part of the SET business to Prime Carbon to avoid paying
certain cred~tors of SET and that the dividend of liquidation payrr,ents
distributed
to
the
creditors
in
the
SET
bankruptcy would
have
been
substantial if the asset transfer between SET and Prime Carbon had not taken
place.
(Id. at 15.)
1

13

held liable,

permitting Claimants to pursue its credits against

[SBT's]

shareholders

disrega

doctrine"

the

course

of

the

and

(id.

by

managers,
26),

<f[

procedure

application

of

the

"recogni ze these acts ta

as

frauds"

(id.

<f[

35),

and

"to

decide upon the interim measures which are necessary to make an
upcoming awa
that

it

ct

ef

was

(id.

"

"pursuing

a

shareholders,

r

directors

losses caus

by means

of

argued
having

ferred resolution

corporate veil and

and

affiliated

to [Plaintiffs]."

ICC Tribunal considered Plaintif
and

relief

also

as well as the fraud carried out

[SBT's]

liable

s

Plainti

so that they can pierce

[SBT]

make

36).

reasonable

ir credit duly recogni
by

<f[

(Id.

allegations

<f[

(see

companies
33.)
id.

<f[

The
28),

these issues until the merits phase

of the proceedings.

lowing notice that SBT admitted the
it,

on November 9,

aims against
Award in

intiffs for $48,053,462.16 plus interest.

favor of

2011 the ICC Tribunal rendered t

The Award

also granted Plaintiffs' arbitration costs and legal fees in the
amount of $360,000.
grant Plainti
of

SBT's

relating

s'

other
to

the

(CompI.

request

<f[

relief

affiliates,
alleged

82.)
s

of

SBT's

not introduce []

14

the Award did not

-vis Prime Carbon or any

shareholders

transfer

held that Plaintiffs "[diq]

However,

or

directors,

assets.

or

The Award

sufficient evidence

stence of fraud

in the present proceedings to demonstrate the

were

under the Award aga
to Prime Carbon.

unable

to

'3I 49.)

(Id.

smissed those claims made by Plaintiffs.

Plaintiffs

The Award then

(Award '3I 47).

bankruptcy proceedings."

in

collect

any money

awarded

st SBT due to the transfer of SBT's assets
'3I 83.)

(Id.

Defendants' A1.leged Pattern And Practice Of
Defrauding Contractual Partners

According
Mende

to

the

Kundrun

is

to

and

Complaint,
engage

in

breach unfavorable contracts when t
avoid
into

creditors
new

by moving

companies.

assets

(Compl.

the

beneficial

model

of

transactions,

market price changes and

away
85.)

'3I

business

from
To

indebt
do

companies

this,

Mende

and

Kundrun form a number of corporate entities and promote them to
the

mi

ng

Family."

(Id.

operates
AMCI

industry

as

Family

Kundrun

own

ly,
corporate

'3I 86.)

one

the

and/or

entit

in
s

rt

of

the

"AMCI

Group"

or

"AMCI

The AMCI Family holds itself out as and

family;

s

either

as

several
same

control
their
they

of

office
all

of

the

space.
the

individual

dominate

15

companies

and

in

Mende

(Id. )

companies
capacities
control.

the

in
or
(Id.

the

U. S.
and
AMCI

through
'3I

89.)

Plaintiffs contend the operations of the AMCI Family are carried
out by Mende and Kundrun in New York, where they reside.
90. )
o

Several of

the

companies

the

U. S.

AMCI

r Delaware or Connecticut.

ice space in e

Family share

(Id.

AMCI

In Adani

against other companies .
. , et al., No.

(Export)

plaintiff,

Adani

Exports

05-cv-0304

Limited

Exports

(W.D.

("Adani")

AMCI

Export

igations.
the

all

(Compl.

fendants

~

dly

d

101.)

engaged in a

not

Pla

lar
ted

v.

Pa. 2006), the

entered

contract with defendant AMCI Export Corporation
and

90.)

~

out s

Defendants Mende and Kundrun have carri
schemes

~

(Id.

into

a

("AMCI Export"),

lfill

its

contract

iffs in Adani alleged that

scheme

t

trans

rred the

coal

trading business and assets of AMCI Export to a different entity
had
( Id. )

en formed by Mende,

The Honorable Terrence F. McVerry of the Western

Pennsylvania
pursuant

to

denied

Rule

smiss

the

(Export)

2

4783

4,

2007).

2006

No.

of

fendants'

aside

from

and all motions

complaint.

Corp.,

2006);

all

12 (b) (6),

against one defendant,

26,

Kundrun and a third individual.

See

Adani

05-cv-0304,

WL 2924786

motions

di
r

Pa.

one

Limi

10,

(W.D. Pa. Oct. 10, 2006); 2007 WL 4298525
The case did not reach the resolve

16

di

ss
count

summary judgment to

Exports

Oct.

to

ssing

2006 WL 1785707

(W. D.

strict

(W.D.

v.

AMCI

Pa.

June

2006);

2006 WL

(W.D.

Pa. Dec.

merits of

eve of trial.

allegations: the action was settled on t

Plainti££s' Swiss Action

Defendants
intiffs

also

their direct

commenced

claims

for

that

noted

have

an

action

the damages

June

on

in

Switzerland

Plaintiffs

2012,

12,

pursuing

asserted

in

the

ICC Arbitration and the SBT bankruptcy against various parties,
including SBT directors,
Carbon

(the

c

in

ims

Mende

and

transact
SBT

to

"Swiss

the

Prime

for P
not

reach

Plaintiffs

certain
In

assets
the

a
to

The

16.)

was
by

that

Ie

the

and

the

aim

Canton of Zug within three months.

the

~

not precluded from bringing the same claim again.

17

leave

Court

to

of

25 & Exs.

according

17. )

from

Plaintiffs

granted

Cantonal

(Rud Decl.

are,

the

The parties did

claim wi thin

but

in

reconciliation hearing

Plaintiffs

deadline,

Defendants

Action,

A00095-A00097 & 15 at A00099-A00101.)
that

the

SBT claims assigned to

magistrate

with

of

liabilities

Swiss Action took place in Zug.

settlement,

One

assisting

and

Swiss

claims and not

Zug Bankruptcy Off

intiffs'

at

wrongfully

(Id. )

rect

Br .

Reconciliation

acted

rring

Carbon.

pursued their own
them by the

for

Carbon

trans

( De f .

Action").

Petition

Prime
s

auditors and Defendants Mende and Prime

14 at

d not file a
to

Defendants,
(Def.

Br.

at

III. The Applicable Standards

Chapter
U.S.C.

201-08,

§§

awards,

2

of

the

Federal Arbitration Act
ral

empowers

such as this one,

the

enforce

arbitral

Storm

584

F.3d 396,

New York Convention,

award unless

it

finds

one

of

"[t]he court s
the

grounds

11 confirm

for

refusal

ferral of recognition or enforcement of the award speci
the

said

Convention.

Universalis S.A.
90

(2d

404

When a party seeks confirmation of an arbitral

2009).

award under

to

9

governed by the New York Convention.

See Telenor Mobile Commc Ins AS v.
(2d Cir.

courts

("FAAIf),

opa

v. En

r. 2005).

U.S.C.

9

If

"Arti

207;

§

see

or

ed in

Encyclopaedia

a Britannica, Inc.,

403 F.3d 85,

e V of the Convention specifies seven

exclusive grounds upon which courts may refuse to recognize an
award.

Encyclopaedia Uni versalis,

If

opposing
prove

enforcement

that

Convention
omitted) .

one

of

applies.

of

an

the
If

403 F.

arbitral

seven

de

enor,

international arbi trat

s

the

under

nses

584

to avoid summary confirmance is high.1f

strong

90.

the

award

"The burden is a heavy one,

"Given

at

public

F.3d

405

burden
New

to

York
tation

as the showing required
Id.

(citation omitted) .

policy

review of arbitral

18

at

party

"

in
awards

favor

of

under the

is

New York Convent
rmining

the
ef

disputes
1

ions

Ahmed

F.3d

23

as

"[a]

akin

to

Shipping

Co.

5388(RJS),

motion
Ltd.

2013

v.

for

F.3d

v.

90

"Rtf

Toys

at

Us,

internal

Houdstermaatschappij,

9,

103 F.

12

(2d Cir.

BV

1997)

or vacating an arbitration

(citation and alteration omitted)).

summary

Progress

1385017,

WL

403

expens

(additional

1997)

petition to confirm an a
a

settling

and

W. L. L.

Willemijn

Corp.,

ted. "

long

Sons,

&

confirmi

award is severely 1

namely,

Uni versalis,

Cir.

accord

("The court's function

However,

a

(2d

Standard Microsystems

arbitration,

avoiding

Alghanim

15,

omitted));

of

and

Encyclopa

Yusuf

126

Inc.,

goals

ciently

igation.'"

(quoting

v.

twin

in order to avo

'very limit

judgment.'

Bulk

at

(quoting D.H. Blair & Co., Inc.

tral awa

*2
v.

STX

If

Carriers

is

Gottdiener,

Pan

No.

Ltd.,

(S.D.N.Y.

'treated

Mar.

Ocean

12 Civ.

14,

2013)

462 F.3d 95,

109

(2d Cir. 2006)).

A

di

ssed

12(b) (1)

facial

for
when

constitutional
States,

sufficient

lack

of

the

district

power

201 F.3d 110,

jurisdiction

is

subject

to

complaint

matter
court

adjudicate

113

(2d

r.

challenged,

jurisdiction rests with the

may

jurisdiction
lacks

it.1f
2000).

the
Ma

"properly
under

Rule

statutory
rova

v.

or

Uni

Once subject matter

bu
rty asserting t

19

be

of

establishing
it exists.

See

omson v. Gaskill,. 315 U.S.
951

(1942)

matter

(citations

442,

the

s

evidence,

ct.

62 S.

The

omitted).

jurisdiction

preponderance of

446,

party

burden

that

673,

86 L.

asserting

of

Ed.

subject

proving,

by

a

court has subject matter

ction. See Makarova, 201 F.3d at 113.

juri

In

a

court

dismiss a claim if the court does not have personal juris

ction

over

the

addition,

rsonal

fendant]

was

properly

Container

raised a

dismiss,
court

s

R.

2010)

juri

[a

P.

aintiff]
with

the

e.

08 - 4 8 92 ,

ctiona1 defense

2010

WL

).

12 (b) (2) .
must
forum

on a

show

that

state

2194827 ,

12 (b)

at

and

*4

defendant
motion

to

ishing that the

Stefano v.

defendant.

"To

Euro-America

Once a

burden of est

ction over a

that

v.

(citations omitt

intiff bears

juri

requires

Civ.

Salmassi
No.

Ltd.,

I,

the

Fed.

jurisdict

served."

June

12 (b) (2)

has minimum contacts

e

(S.D.N.Y.
s

See

defendant.

establish
[the

Rule

Carozzi

N. Am. Inc., 286 F.3d 81, 84 (2d Cir. 2001).

ction must be shown affirma ti vely,

" [J-]

showing
favo

Corp.

is

not
to

v.

omitted) .

made

the

Drakos,.

by

party
140

As such,

ng

from

asserting

F.3d

129,

the

it."

131

(2d

eadings

Shipping
Cir.

inferences

Fin.

1998)

a court may rely on evidence outs

20

and that

Servs.

(citations
of the

pleadings,
motion

including

and

201

Makarova,

.

.

.

the

declarations

records

F.3d

at

attached
113

("In

12(b) (1),

under

in

submitt
to

of

the

clarations.

these

resolving

support

a

motion

a district court.

to

See

dismiss

. may re

r

to

may move

to

evidence outside the pleadings.").

Rule
di

ss a

R. C
rum
McKeown

12 (b) (3)

compla

provides

fendant

a

grounds of improper venue.

on t

P.12(b)(3).

that

"[TJ

burden of showing t

strict is proper falls on the plaintiff."
v.

Port Auth.

(S.D.N.Y.2001).
aintiff

need

Gulf Ins.

Co.

(quoting

However,
only make

v.

CutCo

venue in
E.P.A ex rei.

Supp.

2d 173,

absent an evidentiary hearing,
a

ima

Inc.

cie

417

Glasbrenner,

Indus.,

162 F.

& N.J.,

N.Y.

See

v.

showing

353,

F.3d

355

806

Naughton,

183

"'the

[venueJ .'"
(2d Cir.

F.2d

361,

2005)
364-65

Cir.1986)).

To
12 (b) (6),

survive

"a

complaint must

accepted as true,
on its face.'"

to

a

motion

contain

'state a

Ashcroft v.

550 U.S.

(2007)) .

This

is

544,
not

570,

dismiss

pursuant

suffic

to

ual

Rule

matter,

im to relief that is plaus

(2009)

127 S.

intended

21

u.s.

556

Iqbal,

1937,1940,173 L. Ed. 2d 868
Twombly,

to

to

662,

663,

129 S.

e

ct.

(quoting Bell Atl. Corp. v.
Ct.
be

1955,167 L.
an

onerous

.

2d

9

burden,

as

need

plainti
~nudge[J

their

"

aus

only
c

ims

based

Award

aintiffs

1331

on

contend

(federal

(supplemental
~independently

courts."
Ma

alter

F.3d

56,

that

this

to

to

juri

ction),
(CompI.

(2d

an

ns.

Co.

668 F.3d 60, 71
Hodgson

r.

&

Section 203

governed by

matter

(the

FAA),

U.S.C.

and

Ltd.

to

confirm

U.S.C.

ction on
v.

Unli

Saint

§

1376

federal

Paul

re and

(quoting Durant,

P.C.

most

v.

Dupont,

federal

laws,

565
it

ction before a district

Id.

FAA provides
or

28

The FAA does not

(2d Cir. 2012)

2009)).

of

28

23.)

<]I

Cortese-Costa,

court may entertain petitions."

actions

subject

203

§

liability.

has

confer subject matter juri

Houston,

enforcement of

successor

Court

requires "an independent basis of juris

over

to

conceivable

from

and

9 U.S.C.

question

Scandina

63

ego

jurisdiction).

e Ins. Co.,

Nichols,

line

order

rst Cause of Action see

jurisdiction pursuant
§

the

in

First Cause Of Action Is Dismissed

intiffs'
the

across

sufficient

550 U.S. at 570.

Twombly,

P~aintiffs'

facts

all

vacate

New York Convention.

an

a
See

federal
tral

22

award

9 U. S . C.

distinction exists between a court's powers under

j ur isdiction

§

that
203.

is
A

New York

Convention

when

the

court

imary

in

j ur isdiction

" , [T] he country in whi

sdiction.

secondary j

sits

[arbitration] law of which,

or under the

[an] award was made'

is said to have

primary jurisdiction over the arbitration award."
Co.,

L.L.C.

Negara,

v.

500

Perusahaan

F.3d

111,

Bodas Co.

v. Perusa

335

357,

F.3d

foreign

of

Alghan

364

(5th Cir.

126

of

F. 3d at

Civ.
2013).

Courts

foreign

state,"

award,'
York]

Convent

at *6

(quoti

brought

award

23

Gas

Bumi
Karaha

to modify a

a court of primary
which,

was

("The

its

domestic

and

express

4750 (PAE),

Bodas

(quoting

or under the

made.

Yusuf Ahmed

Convention

fically

r the law of which,

will be free to set aside or modi

wi

Int'l Shipping Co.

Dan

Proceedings

state in which, or

the award is made,

panoply

2003)).

arbi tration

Sons,

accordance

2007)

court in the state

or

contemplates that

in

Minyak

(2d Cir.

can only

which,
&

n.1

Ka

an Pertambangan Minyak Dan Gas Bumi Nebara,

ral awa

jurisdiction,
laws

115

Pertambangan

versus

implied

arbitral
grounds

law

for

v. Americas Bulk Transport
WL

2013
sitting

"lack [J

except ba

"
Yusuf,

2149591,

at

secondary
abil

*6-7

to

'set

its

full

relief.");
(BVI)

Daebo

Ltd., No.

(S.D.N.Y.

sdiction,

j

y

and

an award

May

i. e.,

aside

"

or

on the grounds set forth in the

Daebo Int'l

Shipping Co.,

126 F.3d at 23).

12
17,
a

fy
[New

2013 WL 2149591,

Instead,

courts s

ing

secondary j ur isdiction may only enforce the arbitral award.

23

Karaha Bodas,

which parties can on

are secondary jurisdictions,
whether

State

rce

should

"[W]hen an action for en

the

a

itral

contest
award.").

rcement is brought in a foreign state

[under secondary jurisdiction],

the state may refuse to enforce

on the grounds explicitly set forth in Article V

the award

Convention."

of

1 other signatory States

500 F.3d at 115 n.1

Ahmed Al

Yus

im

Sons,

126 F.3d at

France,

under French

&

23; New York Convention, Art. V(l) (e).

The Award was rendered in Paris,
Law

(Awa

Accordingly,
However,

t

5);

<.IT

Court thus sits in secondary juri

modification

Plaintiffs

of

contend

the

that

Award
they

Award but to enforce it against
See,

erests to SBT.
Group Inc.
23

v.

Tran

(S.D.N.Y.

piercing
action

and

vate Inv.
2002

WL

proceed
Corp.

Ltd.,

(in a confirmat

corporate

veil

may

against

the

at

*3

not
not

permiss

be

s or successor-in­

lation En
801 F.

Commodities

Supp. 2d 211,

g Corp.,

(S.D.N.Y.

"a cl

construed

relevant

Sept.

Ie.

to modify

proce

v. Marine Sh

31106349,

seek

alter e
Canst

eld ER

2011)

the

e. g.,

is

ction.

as

222­
for

a

separate

parties");

Overseas

02 Civ. 0475
19,

2002)

(TPG),

(allowing

claim to pierce corporate veil on motion to confirm arbitration
award
action"

because
against

claim
the

"will
princ

proceed
1

of

24

in

ef

ct

as

a

s

corporation who was

rate
also

named a
Assoc.

defendant);
of

Stamp

Machinists

Tool

&

Aerospace

No.

Co.,

re Arbitration Between

In

8561

85

(S.D.N.Y. Oct. 28, 1987)
in

a

confirmation

Workers,

1987 WL 19285,

where

all

at *1

ermination

(engaging in an alter-ego

proceeding

Int'l

& Numberall

AFL-CIO

(SWK) ,

15,

Dist.

cilities

production

were transferred from one party to the other and the companies
shared common officers).

There are
scope

of

cIa
York

a

few decisions

in this

discretion

veil

court's

on

circuit defining t
rcing

or

alter-ego

seeking to hold a successor-in-interest liable
Convention

award.

Veil

enforcement
piercing

arbitrat
Between
Ukr.,

Second
Mon

311

de

sque

F.3d

nonsignatories
reference; 2)
and 5)

is

488

to

rcuit

assumptioni

Assoc.,

agency law."

but

2002),

arbi tra tion
3)

of

Ie

in

S. A.

M.

five

agreement s:

agency; 4)

a

foreign

against

noted

Reassurances

nonparties
re

In
v.

arbitral

NAK Naftogaz

theories
\\ 1)

64

F.3d

773,776

binding

incorporation by

veil-pierci

(2d

to

Arbitration

falter ego;

at 495; see also ThomsonCSF, S.A. v.

theories arise not out of t
Convention,

permiss

(2d Cir.

estoppel."

Arbitration

proceeding

a New

Cir.

1995).

Am.

Those

explicit language of the New York

"out of common law principles

Monegasque de Reassurances,

25

of contract

311 F.3d at 495.

and

Int'l Shipping Co.,

In

2013 WL 2149591,

one of

the few cases that involved alter-ego claims against a r t y
to

a

tral

a

in London

award
Shipping
pendency

of

("Daebo

Co.

the

International

the
a

arbitration,

panel
Daebo

see

a

sought

a

at

confirm

("Daebo

Daebo

Duri

the

*1.

Internat

arbitrators'
Id.

International

moved

to

Daebo

Consequently,

the

the

Daebo

Dist

Daebo International,

but

1"),

attention during

at *3 n.3.

award

an

entity,

Shipping merged

Co.,

not

ct

Court

to

Daebo Shipping.

The Daebo court found that Daebo International was

ng to modify the awa

on several grounds,

sole petitioner was not a party to

t

to

defunct

Id.

Da

grant

confirm the award for
at *1.

of

Shipping").

Shipping

tral

iff

favor

of the arbitration.

the

(1)

in

pIa

r was not brought to t

the me

Id.

award,

including that
award;

itration agreement at issue did not conta

(2)

the

a provision that

provided that any arbitration award would be "binding upon and
inure"
(3)

to

Daebo
e

the

"their successors

parties

International
whether

it

was

had

asked

the

successor

panel declined to make this
primary jurisdiction

in

the

to

finding.

England,

court's subject matter jurisdiction.

26

a

assigns";
itration

Da

panel

Shipping,
at

*4-5.

modification was
. at *5.

and
to
but

Since
outside

Daebo Int'l involved a non-party

As an initial matter,

plaintiff seeking to become a beneficiary party of an arbitral

Id. ,

award.

*4.

at

Such

modification,

as only part

the

bring

right

U.S.C.
court

to

s to an award,

action

("any party to

207

§

an

having

jurisdiction

*4 .

the

party in the Award.

require

not nonparties,

confirm and

the

this

chapter

By contrast,

successors

for

added);

Plaintiffs

and alter egos

have

See

enforce.

arbitration may apply

(emphasis

.If)

at

the Defendan ts as

to

under

confirming the award
20 13 WL 2 14 9 5 91 ,

undoubtedly

actions

to

an

9

any

order

Daebo Int'l,
seek to
to the

find

liable

An alter ego determination is a finding of

legal equ

lence between the nonparty and party to an agreement

or award.

See,

In terna tional
Cir.
alter

2004)
ego

e.g.,

Ass' n I'
("A

Local Union No.
AFL-CIO v.

district

signifies

Custom,

court's

that,

for

Sheet Metal Workers'

38,

357

F. 3d 266,

independent

all

relevant

268

(2d

determination

purposes,

the

of

non-

signatory is legally equivalent to the signatory and is itself a
party to

the

exercise of a

[agreement]. If) •

Such

a

legal

court's modification powers,

finding
but

made as an extension of the court's grant of
enforcement. 2

S.A.

v.

See,

Faberge

e. g.,

USA,

a

23

F.3d

41,

not

an

determination

jurisdiction over

Productos Mercan tiles e

Inc.,

is

46-47

Industriales,

(2d

Cir.

1994)

2
Thus, the fact that Contracts do not state that they or the arbitration
provisions thereof are binding on successors and ass
is irrelevant to
determining whether the Court has subject matter jurisdiction.

27

(holding

that

whether

an

arbitral

award

could

be

enforced

against a successor-in-interest was appropriate in an action to
confirm
Supp.

and

enforce

2d at 222-23

piercing
action

the
and

proceed

veil

against

Corp.,

corporate

award);

may
the

be

veil

"will

on

claim

against

the principal of

motion

proceed
the

in

to

at

effect

Co. ,

*1

19285,

WL

at

separate

parties");

Overseas

*3

as

as

(allowing claim to
arbitration

a

In re Arbitration Between Dist.
&

F.

"a claim for

separate

corporation who was

AFL-CIO

801

a

confirm

Machinists Aerospace Workers,
1987

Energy,

construed

relevant

2002 WL 31106349,

because

defendant);

Constellation

(in a confirmation proceeding,

corporate

Private Inv.
pierce

the

action"

also named a

Int'l Assoc.

15,

Numberall

(engaging

award

in

Stamp

&

of

Tool

alter-ego

an

determination in a confirmation proceeding where all production
facilities were transferred from one party to the other and the
companies

shared

liabili ty against
party

is

within

common
a

officers) .

Determining

nonparty in an action brought

the

purview

of

a

court

sitting

jurisdiction under the New York Convention as

alter-ego

by an award
in

secondary

it is within the

scope of an enforcement action.

However,
determinations

courts

regarding

generally must
alter-ego

theories in confirmation actions.

28

or

avoid

complex

factual

successor-in-interest

Orion Shipping

&

Trading Co.

v.

Eas t ern S tat e s

Pe t r ole um Co rp.,

1963); see also Daebo,

Cases

2000).

F . 2d

2 99 ,

that

S.A.,

131 F.

present

301

(2 d

Ci r .

In re Arbitration

2013 WL 2149591, at *4;

between Promotora de Navegacion,
(S.D.N.Y.

312

Supp.

factually

2d 412,

421

straightforward

successor liability are exceptions and may be determined in the
course of confirmation proceedings.
23

F. 3d at

46-47

be

enforced against

an

action

to

F.3d at 495

See Productos Mercantiles,

(holding that whether an arbitral award could
a

confirm

successor-in-interest
and

enforce

the

was

award);

appropriate

Monegasque,

in

311

("We have recogni zed certain theories under which a

non-signatory party may be bound by an arbitration agreement and
thus subject to the jurisdiction of the court in proceedings to
compel arbitration or confirm an arbitration award.").

Unsurprisingly,

the

parties

disagree

as

to

whether

successor-in-interest or alter-ego determinations in this action
are factually straightforward.

Defendants contend that neither

the alleged existence nor the identity of a successor to SBT can
be

determined

analysis,
with SBT.
Plaintiffs

by

factually

a

simple

and

straightforward

as Prime carbon did not acquire the stock of or merge
(Def.
and

Br.

SBT

do

at

28.)

not

Moreover,

state

that

the Contracts between

they

or

the

arbitration

provisions thereof are binding on successors and assigns.
at

29.)

Accordingly,

Defendants

contend

that

whether

29

----,.__._

........_.- .. .

(Id.
Prime

Carbon
con

is

a

successor

SBT

to

be

312

Orion,
that

determined

F.2d

finding

at

Prime

( Opp .

alleged.

at

in

a
In

301.
Carbon

is

given

straightforward

factually

is

evidence

overwhelming

cannot

contend

Plaintiffs

successor

SBT

See

aring.

rmation

opposition,

to

a

the

Plaintiffs

30 . )

(Id.

further maintain that Orion is not applicable here.

at 28

30.)

Orion,

In

the

Second

Circuit

analyzed

action for confirmation was the proper time
to

pierce

that

the

it

actions

312

corporate veil.

was

not,

are

the

ones

Circuit

"where

F. 2d

Court

the

at

301.

In

that

powers

would unduly complicate and protract

deciding

confirmation
are

circumscribed and best exercised with expedition.
"[i] t

an

r a District Court

noted

judge's

whether

0

narrowly

Id.

Thus,

the proceeding were

the court to be confronted with a potentially voluminous record
setting
party
ego.'O

out

bound

details
by

an

of

the

corporate

arbitration

award

relationship

and

its

between

purported

a

'alter

Id.

Orion

involved

arbitration

award,

procedure.

312

which

F. 2d at

a
is,

summary
by

300-01.

petition
s

The

to

confirm

nature,

an

abbreviated

Circuit

Court's decision

involved a proceeding to confirm an award under 9 U.S.C.

30

an

§

9 and

not

9 U.S.C.

under

under

Chapter

1

Id.

§207.

of

at

9 U.S.C.

301.

1-16

with

9 U.S.C.

considerations

on

9 is

found

FAA and differs from Chapter 2 of the

the

Compare 9 U.S.C.

FAA, which implements the New York Convention.
§§

§

§§

the

201-208.

This

confirming

which

enforcing

and

action,

of

arbitral awards under the New York Convention,

falls

raises
foreign

outside of

the issues contemplated in Orion insofar as the Circuit Court's
decision relies on the purview of 9 U.S.C. § 9.

However,
§ 9 and 9 U.S.C.

the difference in the scope between 9 U. S. C.

Compare 9 U.S.C.

§207 is minimal.

§ 9

("[A]ny

party to the arbitration may apply to the court so specified for
an

order

grant

confirming

such

an

order

.")

corrected
arbi tration
this
other

may

chapter
party

the

unless

with

apply

for
to

award,

an
the

9

to

the

award

U.S.C.
any

order

and

§

court

confirming

arbitration.

The

thereupon

the

is

vacated,

207

("[A]ny

having
the

as

shall

must

modified,
party

to

jurisdiction

award

court

court

or
the

under

against

any

confirm

the

award unless it finds one of the grounds for refusal or deferral
of recognition or enforcement of the award specified in the said
Convention.");

Navegacion,
an

action

Plaintiffs'

see also

S.A.,
seeking

131

F.

In

re Arbi tra tion between

Supp.

confirmation

contention

that

2d at
under

Orion

31

421-22
9

de

(applying Orion in

U.S.C.

stands

Promotora

§§

for

9

the

and

207).

limited

proposi tion

that

in

some

circumstances,

28-29),

ignores

proceedings

are

ici t

Orion's

an

court

ate

l

language
time

("[WJe hold

t

time

a

strict

Court

"[aJ

mot

to

301

proper

veil."f).

generally

for
Thus,

an action for

an

te

consider an a

Na

Making

cion, S.A.,

an

alter

determination will not be a

Prime

and

suppliers in t
the

successor

straight

arbitration
provide

to

SBT

and

inquiry.

'pierce

for

is

strict

a

award
court

to

In

re Arbitration

131 F. Supp. 2d at 421.

or

successor-in-interest
rward issue in
r

its assets to

to

other

pig

iron

2010 Letters that Prime Carbon was

contend

the

facts

t

Moreover,

in

corporate

arbitral

factually strai

by any contractual
agreement

312 F.2d

aintiffs'
s

Contracts

make

this

allegation

a
is

or legal title.
does

any award shall bind successors

not

and

expressly

assigns,

and

corporate entity was not bought by or merged with any of

SBT t
the

to

representat

January 18,

rwa

not support

made

assert

confirmation is not the

iffs note that SBT trans

PIa

Carbon

ego

to
on,

See

confirm an

occasion

(Opp.

confirmation

which

theory of liability."

r

between Promotora

this case.

that

at

factually intensive theories of liability.
at

should

confirmation of an awa

its docket to promote the
at

a

De

s.

See,

e. g.,

32

Productos

Mercantiles

e

Indust

1993 WL 362391 ,
41

c., No. 92 CIV. 7916 (SWK) ,

ales, S.A. v. Faberge USA,

* 8 ( S . D. N . Y. S

at

14,

(finding that a complex fact-fi
interest

not

necessary

aff'd 23 F.3d

1993),

ng inquiry as to successor­

where

ement

bound

party

as

case

is

"successor and assigns") .

Furthermore,
factually complex,
be needed
the

not

and signi

on

al

s

ne

acquisition

More than $125

in

Plaintiffs'

Prime

t

of

transfer of SBT's assets
125. )

liability

this

cant evidentiary exploration will

in order to

Complaint

based

successor

Carbon's

SBT's

claims.

successor

stock

~

57.)

liabilities.

(Compl.

~~

57,

llion in assets allegedly were

(Id.

Carbon did not ret a

~~

Carbon as

Pr

57,

67.)

120­
Ived

by means

d assumption of SBT's liabilities.

shares owned by SBT in two other companies,

is

on

r

assets transferred to Prime

The al

Letters names

status

but

as well as at least $130 million in consideration
of Prime Carbon's al

y,

(Id.

included

one of which Prime

The

"the new and s

18,

e

owner of the

Goods" and "assumes all rights with respect to
Goods," but also states that Prime Carbon "is

2010

trans

11

rred

to enter

into all contracts between your company and [SBT] and to perform
under the
also

same conditions."

supported

by

a

third

(Id.
party

33

~

51.)

fair

The transaction was
value

opinion.

Both

Plaintiffs
factual

and

Defendants

issues

invol ved

in

whether

case.

in

both

such

interest

the

facts

can

to

dete

Indeed,

possible.

to

n

these

level

legal

review

the

y
extent

or

of

of

a

Litig.,

405 F. Supp. 2d 281, 317

vaca

seeking

bankruptcy
aga

st

p

SBT

ory

en

of

Aff.

rcement
ing

was

19),

for

aintiffs

of

aim,

("Certificate
the admit
is

by

Switzerland.

of

for

re NYSE

alists
part"

t

Or ion

claiming

Awa

bankruptcy

the

it

became

allegedly

SBT

claim

administrator's

on

20).

that

Plaintiffs'

52,855,844.86

~

problem by

Ma

29,

2011

immediately

Based on the recognition

Plaintiffs received a certificate of loss
(Id.

claim

(Id. )

not

, such an inquiry

SBT

(id.

is

arguing

are

the

CHF

of Loss").

ICC

sidestep
Award,

in

transaction

503 F.3d 89 (2d Cir. 2007).

t

whereby

enforceable by
aintiffs'

to

confi

listed

claims
~

attempt

In

y

surrounding

(S.D.N.Y. 2005), aff'd

part on other grounds,

Plaintiffs
only

See

other

comple

successor

Plaintiffs

specific and comp

and

successor-in­

the

successor liability on a de facto merger theo
will

of

issues

alter-ego

s

the

of

the

and

support
a

ne

many

G

facts

terminations,

documents

contest

19-20.)

~~

Plaintiffs

contend

ions as confirmation of the Awa

Paris
But

against
the

34

March

bankrupt
2011

company

recognition

of

iffs'

PIa
2011

claim in

P
of

1 months.

ICC Award by six

if'
CHF

claim recognized

51,756,269.75
interest,

l

($48,053,462.16)

merely

same,

and

the

amount
which

s,

entered in

a

to

tion of a claim in

Id.

cy

Under Swiss law I

the

that the bankruptcy administrator has

claim of a

tor in the bankruptcy proceedings and lis

claim

inventory

in

Acceptance of a claim,

of

however,

bankrupt

(Jorg

II

a

of

subsequent

Arbi trat

recognition

but

of

Certificate

does

Award

as

not

of

Loss

constitute

contemplat

confirmation

under

the

York Convention,

Art.

shall

to

recognition

enforcement

confirmation

of

against an award

New

or
York

("This Convention
of

arbitral

sis added) .

• II )

Orion

and

I

cIa

recognizes

See New

awards

izing

Plaintiffs'

Convention.
apply

19).

~

these factors,

G

administrator's

against

Decl.

the

is not the same as re

and confirming an arbitral award.

ICC

8

wi th

Award,

arbi tra t ion costs and legal

affidavit,

Ex.

SBT bankruptcy in t

the amount of $48,446.768.
Plaintiffs'

November

Rlid Declo

(Compare

amounts are not

In addition,

wi th Award).

the

bankruptcy pre

t

does
an

contemplate
a

ral

award

or's alter egos.

35

separate
and

an

actions

for

rcement

312 F.2d at 301.

the

action
Orion's

dicta

indicates

a

t

alter-ego

finding

in

an

action is not permissible on an unconfirmed arbitral

en

The

awa
liabil

y

iffs

pIa

against

an

See,

enforcement.

in

the

alter

e.g.,

that

sought

ego

cases

both

Productos,

1993

(seeking confirmation and enforcement);

v.

theory

Hanan

Int']

(S.D.N.Y.
(same);
(seeking

Inc.,

Nov.

14,

Overseas

of

the

3210,

an

2002

Award

in

this

at

WL

3828,

311

F.3d

Award itself

at

of

have

the

(See Opp. at 3

("Pla

to confirm and enforce

the

*1
490

at

*1

cases

not

sought

proceeding,

s not been con

*2

at

31106349,

None

here

and

e Maritime, Ltd.

WL

award).

Plaintiffs

362391,

1985

Monegasque,

Corp.,

irmation

WL

Sea Ea

successor

merely

presumably because of SBT's unavailability in

, and t
court.

Inv.

irmation

of

Civ.

(same);

rcement.

confirmation
cement,

84

1985)

vate

only
only

en

No.

found

rmed by any

s
0

r

iffs could not bring this action
award directly

inst

SBT' s

alter

egos in Switzerland.").)

Orion,
egos is

in examining whether

ssible in a

rcement against alter

irmation

, suggest

that

"an action to confirm the arbitrator's award cannot be
as a

substi tute for ei t

"guarantor"

of

action aga

t

an

"

arbitral

the alter

an action
party's

obli

inst an al ter ego as
tions

under "'alter ego'

36

loyed

or

a

s

theory.

rate
It

312

F.2d at 301.

on court indicates a contemplated alter-ego

The

If PI

im subsequent to a confirmation action.
allowed to bring an enforcement action
without
ef

the

the

confirmation

Award

ntiffs were

sed on alter-ego theory
in

any

court

it

would

act as a bypass on the recognition and enforcement

ctive

scheme contemplated by the Second Circuit in Orion.

ssible if the Award was confirmed

enforcement action may be pe

in Switzerland or other court of competent
the Award is unconfirmed,

Plaintiffs'

and Plaintiffs'

jurisdiction.

Here

enforcement claim and

rst Cause of Action is dismissed absent confirmation. 3

Plaintiffs' Second Through Sixth Causes Of Action Are DisBdssed

Defendants contend that,
Plaintiffs have col
must

be

denied

sitting
Defendants,

as

like the plaintiff in Daebo,

erally attacked the Award and their claims
impermiss

secondary

Ie

modificat

jurisdiction.

Plaintiffs

raised

by

this

According
issues

of

alter

to

Court
the
and

Defendants have challenged this Court's
jurisciiction over Prime
Carbon.
(DeL Br. at 30.)
Personal jurisdiction over an ent
may be
predicated on personal
jurisdiction over its alter ego.
See,
e.g.,
Transfield ER
Ltd. v. Indus. Carriers Inc., 571 F.3d 221, 224 (2d Cir.
2009) (" 'alter egos are treated as one entity' for jurisdictional purposes")
(citation omitted); William Passalacqua Builders, Inc. v. Resnick Developers
S., Inc., 933 F.2d 131, 142 43 (2d Cir 1991 ("[Ilf the
iffs in this
case can prove the defendants are in fact the alter ego of Developers,
defendants' jurisdiction objection evaporates because the
judgment
is then being enforced
t en~ities who were, in essence, parties to the
underlying dispute; the alter egos are treated as one entity. 0) •
Thus,
notwithstanding
Defendants'
argument,
~his
Court
does
have
personal
jurisdiction over the Defendants if
are alter egos of Prime Carbon.

37

ICC Arbitration, as well as cIa

successor liability in t
(Def Br. at 21

fraud.

allegations
not

(see Awa

introduce

but

28),

<j[

sufficient

red Plaintiffs'

The Tribunal cons

2.)

held that

evidence

of

aintiffs

to

\\ [did]

demonstrate

existence of a fraud in the bankruptcy proceedings" (id.

the

47).

<j[

Plaintiffs requested findings of fraud and pravi
remedies from the T
36. )

The

only

Plaintiffs'
to

stay

mention

response to

the

arb

(See Award

1.

of

alter

allow

SBT

ration.

intiffs

was
to

seek

pierce

the

co

33.)

<j[

25,

26,

liability

In

33,

35,

came

in

second request
that

response,

receiving a timely and final

of

SBT assetless.

ego

22,

the bankruptcy office's

Plaintiffs merely reiterated
award against

<j[<j[

anal

essence
relief

against

se
the

the

would

nonparties

that

No actual requests for the Tribunal to

veil

or

find

4

(Id. )

rest liability were made.

a

or

successor-in­

The ICC Paris did not make any merits determinations rega
any interim
relief or provisional remedies
by Plaintiffs.
Plaintiffs had sought
an order for documents and information
SBT's shareholders and
directors, which SBT assets "hal
been sold, donated or somehow transferred
to third parties after the date" the arbitration began, and "the list of
debts that caused [SBT] to enter into bankruptcy."
(Palhares Decl. Ex. 3 at
10.)
Plaintiffs also requested that the ICC Paris preliminary recognize the
existence of a fraud in SBT's attempt to evade an award because "such
ion" would allow Plaintiffs to bring actions in other
jurisdictions to attach SBT's assets.
(Id. 'I! 8.)
In response, the ICC Paris
held an oral
on
21, 2010,
which it
zed that
it would be unable to enter relief against any party allegedly holding SBT's
iron because such entities were not
es to the arbitration.
(Id.
'I! 9.)
The ICC Paris, by order, did grant Plaintiffs the
to obtain t['.e
information it
from SBT.
(Id. ']I 10 & Ex. 4 at 2.)
SET never
4

38

above,

noted

As

seek

Fourth, Fi
a

remedy

sought

ayers

Management Council,

expressly

Ass 'n

523

League

. App'x 756,

declined

to

the

preemption

arbitration
Cir.

2007)

awa

v.

address

preempts state law claims,

);

iffs

Pla

in

National

Na

Football

760-61

whether

the

See

refore barred.

se claims are

Football

resolve

by

Second,

fraud and

h and Sixth Causes of Action all
previously

Arbitrat

secondary

Plaintiffs'

jurisdiction and cannot modify the Award.
Third,

in

sits

Court

s

onal
League

(where a

contractual

ICC

trator
provision

district court was not authorized to

issue
v.

ler

in

proceeding
500

Deitsch,

F.3d

(" In the context of an arbitration,

be enforced encompasses

to

enforce
157,

the

170

(2d

the judgment to

terms of the confirmed arbitration

awards and may not enlarge upon those terms.").

Defendants'

insistence

to all of Plaintiffs'
on
pI

the

fact

iff's

Action as
not

it

seeks
in

cIa

arbitral

is

incorrect

a

remedy,

the
is

applicability of

Daebo

aims, which based its holdings partially
the

request,

request

enforcement

that

of

ICC
not

complied with
this Order f
information.
(Id. 'lI 11.)

there

rejected

as

the

rst

to

enforcement,
Arbitration.

barred
and

panel

by

Plaintiffs

39

its

t

of

Plaintiffs did
Thus,

previous

were

Cause

the

unable

Plaintiffs'
requests

for

to

the

obtain

findings of fraud by the Tribunal,
Action

is

dismissed

on

Plaintif

'

Tribunal,

Plaintiffs'

other

although the

grounds.

First Cause of

However,

given

the

aud as an issue before the ICC

attempts at raising

Second through Sixth Causes of Action are

dismissed.

Due Process, Forum Non Conveniens And International Comity
Considerations

As concluded above,
seeking enforcement against

Plaintiffs'

First Cause of Action

alter ego and Second through Sixth

Causes of Action alleging fraud are dismissed.
obviates

the

need

to

determine

the

due

That dismissal

process,

forum

non

conveniens and international comity issues raised in Defendants'
motion to dismiss.

40

IV.

Conclusion

Based
Defendants'

on

conclusions

the

motion to dismiss

Complaint is dismissed.

set

the Complaint

forth
is

above,

the

granted and the

Plaintiffs are granted leave to replead

within twenty days.

It is so ordered.

New York, NY
April
2014

1'

41