BSH Hausgerate GMBH v. Kamhi

Filing 64

OPINION: A "barely colorable justification" exists to justify the award sought, and Respondent has not met his "heavy" burden to avoid confirmation. Albtelecom, 2017 WL 2364365, at *4 (citations omitted). Accordingly, based upon t he conclusions set forth above, the petition is granted, and the Final Award is confirmed. The parties are instructed to confer and submit judgment on notice. It is so ordered. (As further set forth in this Order.) (Signed by Judge Robert W. Sweet on 3/2/2018) (cf)

UNITED STAT ES DISTRICT COURT
SOUTH ERN DIS TRICT OF NEW YORK

- -----------------------------------x
BSH HAUSGERA.T E GMBH ,
17 Civ. 5776
Petitioner ,
OPIN I ON
- aga i nst JAK KAMHI ,
Respondent .
------------- -- --------------------- x
APPEARANCES :

Attorneys for Petitioner
PI LLSBURY W NTH ROP SHAW PI TTMAN LLP
I
1540 Broadway
New York , NY 1 0036 - 4039
By : Kenneth W. Taber , Esq .
Nicholas M. Buell , Esq .

At t orneys f o r Respondent
DAVIDOFF BUTCHER & CITRON LLP
605 Third Av enue , 34 th Floor
New York , NY 10 1 58
By : Eric J. Przyby l ko , Esq .

Sweet, D.J.

Petitioner BSH Hausger~te GMBH ("BSH " or the "Petitioner")
has petitioned, pursuant to the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards , June 6 , 1 958 , 21
U.S.T. 2517 , codified at 9 U.S.C. § 201 et seq.

(the "New York

Convention" or " Convent i on " ) , for an order confirming a foreign
arbitration award of a money judgment for BSH and against
Respondent Jak Kamhi
of :

(1)

$544,230;

("Kamhi" or the "Respondent") in the amount

(2) €1,900,487.13; and (3)

interest on those

amounts under Article 4(a) of the Turkish Law No. 3095 , at the
applicable rate, compounded annually, from February 7, 2017 ,
until full and final settlement of the award (the "Final
Award " ). See Am. Pet. 5, Dkt. No. 20 .

Based upon the conclusions set f orth below, the petition is
granted, and the Final Award is con fir med .

Prior Proceedings

Background on the relationship of the parties, the parties'
arbitration agreements, the foreign arbitration process before a
panel of three arbitrators

(the "Arbitral Tribunal"), and the

Final Award were set forth in the Court 's Octobe r 18, 2017 ,
1

also contained an agreement to arbitrate disputes before the ICC
and under the ICC Rules. See id., Ex. B

~

5.

On October 7, 20 1 3 , Kamhi, one of five claimants

(the

" Claimants " ) , submitted a Request for Arbitration to the ICC.
See id., Exs. C, E

~

1 (defining the five claimants as

"Claimants" ). In the arbitration, Claimants sought monetary and
non -monetary relief based on the theory that the termination of
a distributorship agreement in 2008

(the " DA" ) , to which BSH was

not a party, triggered an automatic rescission that terminated
the SPA-BSH; accordingly, Claimants requested either that BSH
return its SPA-BSH shares or pay damages for allegedly causing
the breach. See id., Exs. C, E

~~

143-47. On January 15, 2014 ,

BSH filed its Answer to the Request for Arbitration, consenting
to the ICC's jurisdiction. See id. , Exs. D

~~

11-12, E

~

10. The

parties and Arbitral Tribunal agreed to the arbitration's Terms
of Reference on May 19, 2014 . See Declaration of Nicholas M.
Buell dated September 22 , 2017

("Buell Sept. 22 Deel .") Ex. A,

Dkt. No. 44 .

During the arbitration proceedings, BSH and the other
respondents in the arbitration moved to have the arbitration
bifurcated as to whether (i) the DA 's termination automatically
terminated the SPA-B SH (the "Aut omatic Termination Claim") and
3

(ii) BSH caused the breach of the DA (the "Breach Claim"); on
August 11, 2015, after briefings, an initial denial, and a
renewed motion for bifurcation, the Arbitral Tribunal granted
the request. Declaration of Eric J. Przybylko dated September
14, 2017

("Przybylko Deel."), Exs. 2-3, 7, Dkt. No. 39. The

Arbitral Tribunal noted that, after resolving the question of
automatic termination, subsequent issues, "if any, will be
determined by the [Arbitral] Tribunal in consultation with the
Parties." Id., Ex. 7

<JI

4 7.

On September 5 and 6, 2016, the Arbitral Tribunal conducted
hearings in Switzerland. Buell July 28 Deel., Ex. E

<JI

134.

On February 6, 2017, the Arbitral Tribunal issued its Final
Award, awarding BSH a money judgment against the Claimants in
the amount of:

(1) $544,230;

(2) €1,900,487.13; and (3)

interest

on those amounts under Article 4(a) of the Turkish Law No. 3095,
at the applicable rate, compounded annually, from February 7,
2017 until full and final settlement of the award. See Buell
July 28 Deel., Ex. E

<J[<J[

67-142, 574-79 & sec. XVIII. Prior to

rendering its decision, the Arbitral Tribunal accepted briefing
on whether a second phase would be unnecessary if the claim
regarding automatic termination was rejected and, after
determining that the SPA-DB had not been terminated, found in
4

its Final Award that "no issue remains to be determined in any
second phase of the proceedings" with regard to the Breach
Claim. Id., Ex. E

~~

488, 492; see id.

~~

457-59, 475-88, 510,

515.

On July 28, 2017, BSH filed the instant petition to
confirm, which was amended on August 3, 2017. 0kt. Nos. 1, 20.

On August 2, 2017, Petitioner moved to confirm an order of
attachment issued against Respondent's real property located at
15 West 53rd Street, Apt. 32B, New York, New York 10019, which
was granted in the October 18 Opinion. See id., 2017 WL 4712226,
at *7.

Following the October 18 Opinion, the parties requested
oral argument on the instant petition, which was heard and
marked fully submitted on December 6, 2017.

Applicable Standard

"Arbitration awards are not self-enforcing,

[and] they must

be given force and effect by being converted to judicial orders
by courts; these orders can confirm and/or vacate the award,
either in whole or in part." Power Partners MasTec, LLC v.
5

Premier Power Renewable Energy,

Inc., No. 14 Civ. 8420

2015 WL 774714, at *1

Feb. 20, 2015)

(S.D.N.Y.

Blair & Co. v. Gottdiener,

462 F.3d 95, 104

(WHP),

(quoting D.H.

(2d Cir. 2006)).

"When a party seeks confirmation of an arbitral award under the
New York Convention,

'[t]he court shall 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.'" Albtelecom SH.Av. UNIFI Commc'ns,
Civ.

9001

(PAE), 2017 WL 2364365, at *4

Inc., No.

(S.D.N.Y. May 30, 2017)

(quoting 9 U.S.C. § 207); see Yusuf Ahmed Alghanim
Toys "R" Us,

Inc., 126 F.3d 15, 23

16

(2d Cir. 1997)

&

Sons v.

("[T]he

Convention is equally clear that when an action for enforcement
is brought in a foreign state, the state may refuse to enforce
the award only on the grounds explicitly set forth in Article V
of the Convention.").

"Article V of the Convention specifies seven exclusive
grounds upon which courts may refuse to recognize an award."
Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica,
Inc.,

403 F.3d 85,

90

(2d Cir. 2005); see also CBF Industria de

Gusa S/A v. AMCI Holdings,
cert. denied,

Inc., 850 F.3d 58, 76-77

138 S. Ct. 557

(2d Cir.),

(2017). These grounds are:

(a) The parties to the agreement . . . were
under
some incapacity, or the said agreement is not valid under
the law .
. ; or
6

(b) The party against whom the award is invoked was not
given proper notice of the appointment of the arbitrator
or of the arbitration proceedings .
.; or
(c) The award deals with a difference not contemplated
by or not falling within the terms of the submission to
arbitration, or it contains decisions on matters beyond
the scope of the submission to arbitration .
.; or
(d) The composition of the arbitral authority or the
arbitral procedure was not in accordance with the
agreement of the parties
., or
(e) The award has not yet become binding on the parties ,
or has been set aside or suspended by a competent
authority of the country in which, or under the law of
which, that award was made.
Convention art. V(l) . Enforcement may also be refused if
"[t]he subject matter of the difference is not capable of
settlement by arbitration," or if "recognition or
enforcement of the award would be contrary to the public
policy" of the country in which enforcement or recognition
is sought. Convention art . V(2) .

Normally , "[t]he confirmation of an arbitration award is a
summary proceeding that merely makes what is already a final
arbitration award a judgment of the court." Corporacion Mexicana
De Mantenimiento Integral, S . De R.L. De C.V. v. PemexExploracion Y Produccion, 832 F.3d 92 , 111 (2d Cir. 2016)
(quoting Florasynth, In c. v. Pickholz , 750 F.2d 171, 176 (2d
Cir . 1984) ), cert . dismissed , 137 S . Ct . 1622 (2017) . "The

7

arbitrator's rationale for an award need not be explained, and
the award should be confirmed 'if a ground f o r the arbitrator's
decision can be inferred from the facts of the case[.]'" D.H.
Blair, 462 F.3d at 110 (quoting Barbier v. Shearson Lehman
Hutton, Inc., 948 F. 2 d 117, 121 (2d Cir. 1991)). "Only 'a barely
colorable justification for the outcome reached' by the
arbitrators is necessary to confirm the award." Id.

(quoting

Landy Michaels Realty Corp. v. Local 3 2 B-32J, Serv. Emps. Int'l
Union,

954 F.2d 794, 797

(2 d Cir. 1992)).

"The party opposing enforcement of an arbitral award has
the burden to prove that one of the seven defenses under the
Convention applies. The burden is a heavy one, as the showing
required to avo id summary confirmance is high." Albtelecom, 2017
WL 2364365, at *4

(internal citations omitted); see also Korean

Trade Ins. Corp. v. Eat It Corp., No. 14 Civ. 3456 (MKB), 2015
WL 1247053, at * 4 (E.D.N.Y. Mar. 16, 2 015)

(internal alterations

and quotation marks omitted) ("C o urts have held that judicial
policy strongly favors recognition by American courts of foreign
arbitral awards.")

8

Respondent claims that the Arbitral Tribunal's decision to
bifurcate the arbitration proceedings into two phases, but then
issue its Final Award without having a second phase, was a
fundamentally unfair "bait and switch. " Opp . Mem. 17. This
argument finds no support in the history of the arbitration.

Under Article V(l) (b) , Respondent must demonstrate that
"[t]he party against whom the award is invoked was not given
proper notice of the appointment of the arbitrator or of the
arbitration proceedings or was otherwise unable to present his
case. " Convention art. V(l) (b) . As the Second Circuit has
stated, this provision "essentially sanctions the application of
the forum state's standards of due process." Mondis Tech. Ltd.
v . Wistron Corp., No. 15 Civ. 2340
(S .D. N.Y. Nov. 3, 2016)

(RA), 2016 WL 6534255, at *5

(quoting Iran Aircraft Indus. v . Avco

Corp. , 980 F.2d 141, 145 (2d Cir . 1992)). The inquiry is
"limited to determining whether the procedure used was
fundamentally unfair[ , ]" Abu Dhabi Inv. Auth. v. Citigroup,
Inc., No. 12 Civ . 283 (GBD), 2013 WL 789642, at *7
Mar. 4, 2013)
F.3d 16, 20

(S.D.N.Y.

(citing Tempo Shain Corp. v. Bertek , Inc., 120

(2d Cir. 1997) ), aff'd, 557 F. App'x 66 (2d Cir .

2014) , and ensuring that there was "the opportunity to be heard
'at a meaningful time and in a meaningful manner.'" Iran

10

'

.
Aircraft Indus.,

980 F.2d at 145 (quoting Mathews v . Eldridge,

424 U.S. 319 , 333 (1976)).

Two elements of the underlying arbitration are clear ,
although neither amount to fundamental procedural unfairness.
First, it is c lear that Respondent did not at the time-and does
not today-believe that resolution of the Automatic Terminati on
Claim would resolve the Breach Claim. However, the Arbi tral
Tribunal provided opportunity to brief on the question of the
interdependence between the two claims both prior to the
decision to bifurcate and afterward. See Przybylko Deel. Ex. 4,
i i 35 , 39, Ex. 7 i i 26 - 32 ; Buell July 28 Deel. Ex. E i i 457-71.

At that time, Respondent 's briefings indicated that he
recognized that there was only "a possible second phase" of the
arbitration. Przybylko Deel. Ex. 9 i 223 (emphasis in original);
id. i 203 . Moreover, despite Respondent's current claim of
confusion by the Arbitral Tribunal's decisions, the Arbitral
Tribunal's decision at the time of bifurcation that "the iss ues
to be determined in any Second Phase will be determined by the
Tribunal in consultation with the Parties" can only reasonably
be interpreted to mean that a second phase, and any issues to be
determined therein, were not a certainty. Id. Ex. 7 i 54(c).

11

'

.
Second, it is clear that the Arbitral Tribunal, having
reviewed Respondent's submissions, determined that there was n o
breach of the SPA-DB, that the Breach Claim was related to the
first phase's Automatic Termination Claim, and that,
consequently, the Breach Claim was moot. See Buell July 28 Deel.
Ex. E 11 489-515. That Respondent still does not agree with the
Arbitral Tribunal's decision does not mean he was deprived a
fair opportun i ty to present his case. See Am. Univ. of Antigua
Coll. of Med. v. Leeward Const . Co. , No. 14 Civ. 8410
2015 WL 1958971, at *4

(S.D.N.Y. May 1, 2015)

(DLC),

(rejecting Article

V(l) (b) argument because the "Tribunal concluded that [t he
plaintiff]

'formu late d its counterclaim such that it includes a

c laim of unjust enrichment

. and the Parties' subsequent

oral and written submissions have addressed this unjust
enrichment claim. '" ) , aff 'd sub nom. Am. Univ. of AntiguaCollege of Med. v. Leeward Constr . Co ., Ltd.,

653 F. App'x 48

(2d Cir. 2016); Agrera Investments Ltd. v. Palant, No. 13 Civ.
872 1 (KPF) , 2014 WL 4958075, at *3 (S.D .N.Y. Oct . 3, 2014)
(finding "a colorable basis exists to support the Final Award:
the Tribunal reviewed submissions from both sides, allowed
document discovery, conducted a hearing during which witnesses
testified, considered post-trial briefing from both sides, and

12

ultimately issued a reasoned decision that weighed both parties'
positions) . 1

b. Joint and Several Liabilit y Does Not Make the Final Award
Unenforceable Under Article V ( 1) ( d)

Respondent next contends that Article

V ( 1)

( d) , which

requires a court to evaluate the arbitral procedure and law,
makes the Final Award unenforceable. The Final Award held that:
"As the unsuccessful Party , Claimants should bear the entirety
of the costs of these proceedings .
Ex. E

~

"Buell July 28 Deel.

530. Respondent avers that, as the Final Award does not

state that Claimants are to be held joint and severally liable ,
to find such by confirming the Final Award as proposed by
Petitioner would require making a presumption about the Final
Award 's language contrary to the laws governing the arbitration.
See Opp . Mem. 12-15. This argument is unavailing.

1

Respondent compares his situation to that of the claimant
in Iran Aircraft Indus. v . Avco Corp., but such comparison is
unwarranted. There, an arbitrator's final award rejected a
party's claim because certain documents had not been introduced
at the arbitration, even though the arbitrator had previously
advised that party not to provide those very documents. See id.,
980 F.2d at 143-44. Here , the Arbitral Tribunal provided clear
opportunity to argue whether the Breach Claim could survive the
first phase and the parties' briefings support the conclusion
that there was general understanding that a second phase was
only a possibility.
13

Under Article V(l) (d), Respondent must show that "[t]he
composition of the arbitral authority or the arbitral procedure
was not in accordance with the agreement of the parties, or,
failing such agreement, was not in accordance with the law of
the country where the arbitration took place." Convention art.
V(l) (d); see also Encyclopaedia Universalis S.A. v.
Encyclopaedia Britannica, Inc., 403 F.3d 85, 91 (2d Cir. 2005)
(noting that, while enforcement of arbitral awards under Article
V ( 1) ( d)

might "exalt [ ] form over substance

. the fact that

the parties explicitly settled on a form and the New York
Convention requires that their commitment be respected");
Phoenix Bulk Carriers, Ltd. v. Am. Metals Trading, LLP, No. 10
Civ. 2963 (NRB), 2013 WL 5863608, at *7 n.10
2013)

( observing that Article

V ( 1)

(S.D.N.Y. Oct. 31,

( d) addresses "the propriety

of the arbitration procedure").

The parameters of the arbitration are dictated by the
underlying agreements, which proscribe the ICC Rules and Swiss
law. Each of the Agreements state that: "All disputes in
connection with this Agreement shall be finally settled under
the Arbitration Rules of the International Chamber of Commerce,
Paris, by three Arbitrators appoint in accordance with the said
Rules." Buell July 28 Deel., Exs. A§ 10, B § 5. Moreover, the
Terms of Reference established by the Arbitral Tribunal held
14

that, for applicable procedural rules : "The rules governing the
proceedings of this arbitration shall be the mandatory rules at
the place of arbitration (i.e.,

those set forth in Chapter 12 of

the Swiss Private International Law Act ["PILA"]) and those
contained in the [ICC] Rules , as well as those rules agreed upon
by the Parties . " Buell Sept. 22 Deel. Ex. Ai 112 .

Under the ICC Rules, Article 38(4) states that: "The final
award shall fix the costs of the arbitration and decide which of
the parties shall bear them or in what proportion they shall be
borne by the parties." ICC Rules art . 38(4), available at
https://iccwbo.org/dispute-resolutionservices/arbitration/rules-of-arbitration; Buell July 28 Deel .
Ex . E i 525 (albeit cited by the Arbitral Tribunal as "Article
37") . 2 Under the Swiss PILA's Chapter 12 , which governs
international arbitrate proceedings taking place in Switzerland ,
there is no discussion of the issue of cost and legal fee
allocation by arbitral tribunals , which in turn allows arbitral

While Respondent correctly notes that the Agreements state
that each agreement "shall be governed by and construed in
accordance with the laws of Turkey," Buell July 28 Deel., Exs . A
§ 9, B § 4, that fact has no relevance to Article V(l) (d)
consideration, which requires only analysis of the "arbitral
procedure" pursuant to the parties ' agreement , Convention art .
V(l) (d). As noted above, the procedural posture of the
arbitration demonstrate that the ICC Rules and Swiss PILA would
govern this arbitration.
2

15

tribunals the discretion to decide procedural issues not
otherwise agreed upon by the parties. See Declaration of
Nathalie Voser dated October 12, 2017

("Voser Deel.") i i 12-13,

16, Dkt. No. 57.

The question, therefore, is whether finding joint and
several liability presumed from the text of the Final Award
v i olates the procedural rules out lined above and under which the
parties agreed to arbitrate. It does not. In its Final Award
opinion, the Arbitral Tribunal referred to the Claimants
together as one single "Party," Buell July 28 Deel., Ex. E
i

530, which "j ointly submitted their Statement of Claim" along

with evidence and briefing throughout the proceeding, id. i 87 ;
see also id. i i 90 - 96 - 97 , 101, 105 , 107-08, 111-23, 128(i),
134(i), 1365-40, 143-47, 543-44. The Final Award is grafted onto
the underlying procedural law, which supports joint and several
liabilit y . When making their decision, the ICC Rules permitted
the Arbitral Tribunal to decide which parties should bear costs
or in what proportion, so electing not to apportion the Final
Award out between the Claimants and instead referring t o them as
a single "Party" demonstrates a decision not to apportion-in
other words, to create joint and several liability. See ICC
Rules art. 38(4) ; Voser Deel. i 30 . At the same time, the Swiss
PILA was silent on the issue of joint and several liability, and
16

other underlying Swiss law to which the Arbitral Tribunal could
have looked points in opposing directions . See Voser Deel .
i i 14-15, 17 - 31. 3 In the face of this, Respondent, whose "heavy"

burden it is to prove procedural impropriety, has put forward no
evidence to establish that such a conclusion goes beyond the
agreed - to arbitration procedures. Encyclopaedia Universalis, 403
F . 3d at 90.

In sum, given the language of the Final Award, the
procedural history of the arbitration, and the supportive
underlying procedural rules, there is more than "a barely
colorable justification" to support finding that an implied
joint and several liability in the Final Award conformed to the
procedural parameters permitted under the Agreements. Gomez de
Hernandez v . Wells Fargo Advisors, LLC, No. 16 Civ. 9922
2017 WL 3088396 , at *2 (S.D.N.Y. July 20, 2017)

(LGS) ,

(quoting D.H .

Blair, 462 F.3d at 110); see id., 2017 WL 3088396, at *4

3

The parties have noted two underlying Swiss statutes
potentially relevant to international arbitrations. The first is
the Swiss Supreme Court Act ("SCA"), which governs proceedings
before the Swiss Supreme Court, which hears challenges of
international arbitral tribunal awards; the other is the Swiss
Code of Civil Procedure ("CCP"), which governs proceedings
before Swiss lower courts . See Voser Deel. i i 15-16. The SCA
provides that unless otherwise stated, multiple persons need to
bear costs imposed by a court jointly and severally. Id. i i 1718. The CCP provides that a court must expressly state whether
parties jointly and severally are liable for costs . Id . i i 19 21 . Neither bound the Arbitral Tribunal. Voser Deel. i 13.
17

(rejecting Article V(l) (d) argument when petitioner seeking to
vacate award did not show that "arbitration procedure deviated
from the terms of the parties' agreement"). More is not needed
to require the Final Award's confirmation

c . Respondent's Standalone Ambiguity Argument Fails

Finall y, separate but related to his Article V ( 1) ( d)
argument, Respondent contends that the Final Award is so
ambiguous with regard to the apportionment of costs that it is
impossible to enforce. Opp. Mem . 10-12. Respondent predicates
his argument not on particular Article V's provisions but rather
language from authorities within the Second Circuit that hold
that if the award is "ambiguous .

the court should remand to

the arbitrator for further findings." Alcatel Space, S.A. v.
Loral Space & Commc 'ns Ltd., No. 02 Civ. 2674
1391819, at *4

(S.D.N.Y. June 25, 2002)

(SAS), 2002 WL

(collecting cases); see

Telenor Mobile Commc'ns AS v . Storm LLC, 351 F. App'x 467, 469
( 2d Cir . 2 00 9)

(" [ R] emand to an arbitration panel for

clarification may be appropriate where an award is so ambiguous
that a court is unable to discern how to enforce it."); Ottley
v . Schwartzberg, 819 F.2d 373 , 376 (2d Cir. 1987)
quotation marks omitted)

(internal

( "Indefinite, incomplete, or ambiguous

awards are remanded so that the court will know exactly what it
18

~

.

(

.
is being asked t o enforce."). This argument fails for tw o
reasons.

To start, the Final Award is not ambiguous. Even to assume,
arguendo, that ambiguity was an appropriate ground for this

Court to cons ider prior t o confirming an arbitral award in the
present context, "the court must examine the award to determine
whether a provision is ambiguous" and if "the award is clear and
unambiguous, it must be enforced." Alcatel Space, S.A., 2002 WL
13918 1 9, at *4

(S .D.N .Y. June 25 , 2002)

(internal quotation

marks and citations omitted). As detailed above, the procedural
history of the arbitration and the language employed in the
Final Award by the Arbitral Tribunal when discussing the
Claimants and their collective relationship sufficiently
establ ish that the Final Award created joint and several
liability between the Claimants. See supra at 16-17. Whatever
ambiguity existed by looking solely to the award section of the
Final Award, it is resolvable by the record and the Arbitral
Tribunal's thorough Final Award opin i on ; it is clear what the
Arbitral Tribunal decided. See , e.g., Retail, Wholesale

&

Chain

Store Food Emps. Union Local 338 v . Red Apple Supermarkets , No.
94 Civ. 21 10 (DGT), 1996 WL 204503, at *4
1996)

(E.D.N.Y. Apr. 18,

(quot ing United Steelworkers v. Danly Mach. Corp., 852

F.2d 10 24 , 10 26 (7th Cir . 1988))

(observing that district courts
19

may "interpret and enforce an ambiguous award if the ambiguity
can be resolved from the record"). As such, the inquiry could
end right there.

As a secondary reason, the fact that Article V does not
include ambiguity as an enumerated reason for this Court to
refuse enforcement is Respondent's Achilles' heel, because it is
not clear that amb iguit y as argued is an appropriate ground to
refuse enforcement. When a district court sits in a different
country or under different applicable law from where the
arbitral award was made, that court is said to be sitting in
"se condary jurisdiction."

LGC Holdings, Inc. v . Julius Klein

Diamonds, LLC, 238 F. Supp. 3d 452, 465 (S.D.N.Y. 20 17)

(citing

Yusuf, 126 F.3d at 23) . As the arbitration neither occurred in
New York nor under New York law, secondary jurisdiction is the
juridical posture here. When sitting in secondary jurisdiction,
as the Second Circu it has recently reminded district courts, the
parameters within which a district court may refuse enforcement
are rigidly circumscribed: "[T]he [New York] Convention is
equally c lear that when an action for enforcement is brought in
a foreign state, the state may refuse to enforce the award only
on the grounds explicitly set forth in Article V of the [New
York] Convention." CBF Industria de Gusa S/A, 850 F.3d 58 at 71
(quoting Yusuf, 126 F.3d at 23)

(emphas is added, alterations in
20

"'!

, ·.f

•
original) . 4 Accordingly, ambiguity, not a ground "explicitly set
forth" in Article V, may not be a ground for consideration. See
Parsons & Whittemore Overseas Co., Inc. v. Societe Generale de
L'Industrie du Papier, 508 F.2d 969,
the legislative history of Article V

973

(2d Cir. 1974)

("Both

. and the statute

enacted to implement the United States' accession to the
Convention [9 U.S.C. § 207] are strong authority for treating as
exclusive the bases set forth in the Convention for vacating an
award.")

For differing reasons, none of the authority presented by
Respondent that mention ambiguity of an award as a reason for
not confirming an award establish that this Court has the
authority to go beyond the enumerated strictures of Article V.
Some cases Respondent cites are in the context of courts sitting

This is in contrast to courts sitting under the law where
the award was made, which is termed primary jurisdiction, where
additional grounds for relief may be available. See, e.g.,
Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi
Negara, 500 F.3d 111, 115 n.1 (2d Cir. 2007) (citation omitted)
("In contrast to the limited authority of secondary-jurisdiction
courts to review an arbitral award, courts of primary
jurisdiction, usually the courts of the country of the arbitral
situs, have much broader discretion to set aside an award.");
Yusuf, 126 F.3d at 23 (citing Convention art. V(l) (e)) ("The
Convention specifically contemplates that the state in which, or
under the law of which, the award is made, will be free to set
aside or modify an award in accordance with its domestic
arbitral law and its full panoply of express and implied grounds
for relief.") .
4

21

in primary jurisdiction, which, as already noted, permits a
wider range of available adjudicative options. See Telenor
Mobile Cornrnc'ns AS v. Storm LLC, 587 F. Supp. 2d 594,
(S.D.N.Y. 2008)

600

(discussing an arbitral award from an

arbitration held in New York), aff'd, 351 F. App'x 467

(2d Cir.

2009) ; Libert y Re (Bermuda) Ltd. v. Transamerica Occidental Life
Ins. Co., No. 04 Civ. 5044
(S.D.N.Y. May 23 , 2005)

(NRB), 2005 WL 1216292, at *2

(same). The discussion of ambiguity in

Alcatel Space, S.A., although sitting in secondary jurisdiction,
was based on pre-Yusuf authority from courts sitting in primary
jurisdiction and did not address the tension between its opinion
and Second Circuit authority like Yusuf. See id., 2002 WL
1391819, at *4

(S.D.N.Y. June 25, 2002)

No. 92 Civ. 6127

(citing Rizzo v. Zalkin,

(SWK), 1994 WL 114836, at *6 (S.D.N.Y. Mar. 31,

1994), Zephyros Maritime Agencies,

Inc. v. Mecicana De Cobre,

S.A., 662 F. Supp. 892 , 895 (S.D.N.Y. 1987); Hellman v. Program
Printing, Inc., 400 F. Supp. 915, 918

(S.D.N.Y. 1975 )). The only

Second Circuit authority presented by Respondent, Ottley v.
Schwartzberg, addressed confirmation of an arbitral award under
the Convention and the Federal Arbitration Act

("FAA"), which

permits a wider set of parameters than the Convention in
deciding whether to confirm an award.

5

5

See Ottley, 819 F.3d at

Although not cleanly stated, courts remanding for ambiguity
regularly ground their decision in attempting to ensure that the
22

375. Moreover, Ottley precedes Yusuf by a decade, and as such
the more recent Yusuf's clear language on the parameters of
confirmation under the Convention controls.

Accordingly, Respondent's standalone ambiguity argument for
refusing to confirm the Final Award fails.

arbitral award constitutes a "a mutual, final, and definite
award upon the subject matter submitted," Olympia & York Fla.
Equity Corp. v. Gould, 776 F.2d 42 , 45 (2d Cir . 1985) (citing 9
U.S.C. § l0(d), now id. § l0(a) (4) ), or that there has not been
"manifest disregard of the law" or the underlying facts of the
case by the arbitrators, Siegel v . Titan Indus. Corp., 779 F.2d
891, 894 (2d Cir. 1985) (citations omitted); see also Sevenson
Envtl. Servs., Inc. v. Sapp Battery Site Grp., No. 04 Civ. 670
(JFK) , 2004 WL 936764 , at *5 (S .D.N.Y. Apr. 29 , 2004) ("Courts
in this circuit have interpreted this portion of the statute [9
U.S.C. § l0(a) (4)] to require the remand of awards they deem to
be incomplete or ambiguous."); Dworkin-Cosell Interair Courier
Servs., Inc. v. Avraham, 728 F. Supp. 156, 161-62 (S.D.N.Y.
1989) (alteration in original , citations omitted, emphasis
added) (sitting in primary jurisdiction and remanding an
arbitral award "back to arbitrators for clarification" because
petitioner sought "confirmation under both the Convention and
the Federal Arbitration Act , and it is well established under
the latter that '[c]ourts will not enforce an award that is
incomplete, ambiguous or contradictory'"). These reasons are
considered by courts when deciding whether to confirm awards on
grounds created by the FAA, which is applicable for American
courts sitting in primary jurisdiction, no t secondary
jurisdi ction . See,e.g., Lee ward Constr. Co., 826 F.3d at 638;
Duferco Int'l Steel Trading v. T. Klaveness Shipping A/S, 333
F.3d 383, 388 n.1 (2d Cir. 2003) ; Yusuf, 126 F.3d at 20-23 .

23

Conclusion

A "barely co l orab le justification" exists to justify the
award sought, and Respondent has not met his "heavy" burden to
avoid confirmation. Albtelecom, 2017 WL 2364365 , at *4
(citations omitted) . Accordingly, based upon the conclusions set
forth above, the petition is granted, and the Final Award is
confirmed .

The parties are instructed to confer and submit judgment on
notice.

It is so ordered.

New York, NY
March 1/° , 2018

24