Palmco Administration, LLC v. Flower Payment, Inc.

Filing 42

AMENDED DECISION AND ORDER For the foregoing reasons, it is herebyORDERED that the petition to confirm the non-domesticarbitration award filed by petitioner Palmco Administration,LLC ("Palmco") (Dkt. No. 1) is GRANTED; it is furtherORDE RED that judgment against respondent Flower Payment,Inc. ("Flower Payment") be entered in the amounts of (1) $1,646,690.02 with $604,180.08 in interest plus post-award interest of $541.38 per day from December 10, 2022 to the date of payment in full of the Final Award ; (2) $350,275.11 in attorneys' fees and costs in connection with the underlying arbitration; (3) $110,662.50 in arbitration fees and arbitrator compensation; and (4) $119,115 in attorne ys' fees and costs in connection with bringing the instant petition. The Clerk of Court is directed to terminate all pending motions and to close this case. SO ORDERED. (Signed by Judge Victor Marrero on 3/6/2025) (jca) Transmission to Orders and Judgments Clerk for processing.

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
03/06/2025

PALMCO ADMINISTRATION, LLC

23 Civ. 7409 (VM)

Petitioner,

AMENDED DECISION
AND ORDER

- against FLOWER PAYMENT, INC. (F/K/A FLOWER
POWER, INC. and FLOWER POWER CO. LTD.
JAPAN A/K/A FLOWER DENRYOKY KABUSHIKI
KAISHA)
Respondent.

VICTOR MARRERO, United States District Judge.
Before the Court is the petition of Petitioner Palmco
Administration, LLC (“Palmco” or “Petitioner”) to confirm a
final foreign arbitration award (the “Final Award”) against
Respondent Flower Payment, Inc. (“Flower Payment”) pursuant
to the Federal Arbitration Act, 9 U.S.C. § 207, and the
Convention on the Recognition and Enforcement of Foreign
Arbitral Awards (“New York Convention.”) (See Dkt. No. 1
[hereinafter “Petition”].) Palmco also seeks an award of
attorneys’ fees and costs in connection to bringing this
Petition in federal court. For the reasons set forth below,
Palmco’s

petition

to

confirm

the

arbitration

award

is

GRANTED. Palmco’s request for attorneys’ fees and costs in
this federal action is GRANTED IN PART and DENIED IN PART.
I.

BACKGROUND

A. FACTUAL BACKGROUND
1

The underlying arbitration arose from Flower Payment’s
alleged breach of the Membership Interest Purchase Agreement
(“MIPA”) between Palmco, Flower Payment, and their respective
subsidiaries, which was executed on November 8, 2019. (See
Dkt. No. 5-2 ¶ 3 [hereinafter “Partial Final Award”].)
Palmco is a New York-based limited liability company
that supplies electricity and natural gas to end users across
the United States. (Partial Final Award ¶ 1.) Flower Payment
is a Japan-based company that operates in the Japanese energy
market. (Id. ¶ 2.) Approximately in 2018, Palmco and Flower
Payment entered into an advisory agreement for which Palmco
posted $1,646,690.02 as collateral (“Collateral”) to secure
Flower Payment’s advisory services to help Palmco enter the
Japanese

energy

market.

(Id.

¶¶

25,

29.)

When

Palmco

eventually abandoned its efforts to enter the Japanese energy
market,

Palmco,

Flower

Payment,

and

their

respective

subsidiaries entered into the MIPA. Under the MIPA, Palmco
would

sell

its

Japanese

subsidiary

to

Flower

Payment

subsidiary GQA Holdings LLC (“GQA”) for a purchase price of
approximately

$1,048,000.

The

MIPA

also

required

GQA

to

return the Collateral to Palmco as part of the sale and Flower
Payment guaranteed that obligation. (Id. ¶ 29.) After the
transaction

closed

on

November

2

8,

2019,

neither

Flower

Payment nor GQA repaid the Collateral to Palmco when due or
anytime thereafter. (Partial Final Award ¶¶ 37-38.)
The MIPA contained an arbitration clause in accordance
with the International Arbitration Rules of the International
Centre for Dispute Resolution (“ICDR Rules”) applicable to
resolve any disputes between the parties. The MIPA provided
that New York federal courts would have personal jurisdiction
over confirmation proceedings of any arbitral award entered.
(See MIPA § 11.22.) Finally, enforcement of the MIPA’s terms
was to be governed by New York state law (Id. § 11.7(a).)
B.PROCEDURAL BACKGROUND
On August 12, 2021, after not receiving payment of the
Collateral,

Palmco

commenced

arbitration

against

Flower

Payment and its subsidiary GQA, pursuant to the ICDR Rules.
Although GQA did not appear at any time, (id ¶ 24), Flower
Payment participated in the arbitration and asserted various
defenses. (Id. ¶ 40.) The arbitration was presided by a threemember tribunal (“Tribunal”). (See Partial Final Award ¶ 7.)
In May 2022, the Tribunal held a two-day merits hearing,
during which witnesses appeared for cross-examination. (Id.
¶ 18.) On September 22, 2022, the Tribunal entered an award
in favor of Palmco, finding Flower Payment and GQA jointly
and severally liable for breach of the MIPA. (Id. ¶ 58.) The
Tribunal awarded $1,646,690.02 in damages with $604,180.08 in

3

interest plus a daily interest amount of $541.38 to accrue
from December 10, 2022, to the date of full payment of the
Final Award, and $ 576,037.61 in costs and fees. (See Dkt.
No. 5-3 ¶ 6 [hereinafter “Final Award”.)
On August 21, 2023, Palmco initiated this action by
filing the instant Petition. Flower Payment does not oppose
the

Petition. 1

On

February

10,

2025,

Palmco

filed

an

application for attorneys’ fees in connection with bringing
the instant Petition. (Dkt. No. 33). Flower Payment does not
oppose the application. 2
II.

LEGAL STANDARD

There is no dispute that this award falls under the New
York Convention. The arbitration agreement is a written one;
covering

a

arbitration

commercial
in

the

subject

territory

matter;
of

a

providing

signatory

of

for
the

convention 3; and not entirely domestic in scope. Exclusive

1 On May 10, 2024, Flower Payment filed a Motion to Dismiss the Petition
for lack of personal jurisdiction pursuant to Federal Rule of Civil
Procedure 12(b)(2). (“Motion to Dismiss,” Dkt. No. 21.) On February 18,
2025, after the parties fully briefed the Motion to Dismiss, Flower
Payment notified the Court of its intent to withdraw the Motion to
Dismiss. (“Withdrawal Letter,” Dkt. No. 37.) Therefore, the Court will
not consider any arguments made in Flower Payment’s Motion to Dismiss and
will treat this petition as unopposed.
2 In its Withdrawal Letter, Flower Payment asked the Court to “take this
letter as Flower Payment’s response to Petitioner’s pending motion for
attorneys’ fees” without noting any opposition to the application. (Dkt.
No. 37 at 1.)
3
Palmco’s principal place
arbitration took place.

of

business

4

is

in

New

York,

where

the

Trim v. Kastamonu Romania, S.A., 698 F. Supp. 3d 621, 625
(S.D.N.Y. 2023). Article V of the New York Convention governs
a district court’s review of an application to confirm a
foreign arbitral award. See Commodities & Minerals Enter.
Ltd. v. CVG Ferrominera Orinoco, C.A., 49 F.4th 802, 809 (2d
Cir. 2022); see also 9 U.S.C. §§ 201-208 (incorporating the
New York Convention). When a party applies to confirm 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.” 9 U.S.C. § 207.
Article V contains an exclusive list of seven defenses to
confirmation

and

the

“party

opposing

enforcement

of

an

arbitral award has the burden to prove one of the seven
defenses under the New York Convention applies.” New York
Convention

Art.

V(1);

Encyclopaedia

Universalis

S.A.

v.

Encyclopaedia Britannica, Inc., 403 F.3d 85, 90 (2d Cir.
2005). The burden is a heavy one, as “the showing required to
avoid summary confirmance is high.” Yusuf Ahmed Alghanim &
Sons v. Toys “R” Us, Inc., 126 F.3d 15, 23 (2d Cir. 1997)
(citations omitted).
“The review of arbitration awards is ‘very limited . . .
in order to avoid undermining the twin goals of arbitration,
namely, settling disputes efficiently and avoiding long and

5

expensive litigation.’” Id. at 23 (citing Folkaways Music
Publishers, Inc. v. Weiss, 989 F.2d 108, 111 (2d Cir. 1993).
Confirmation of an award under the New York Convention is “a
summary proceeding in nature, which is not intended to involve
complex factual determinations, other than a determination of
the limited statutory conditions for confirmation or grounds
for refusal to confirm.” Zeiler v. Deitsch, 500 F.3d 157, 169
(2d Cir. 2007) (citations omitted). The review is “extremely
deferential” to the findings of the arbitration panel. Porzig
v. Dresdner, Kleinwort, Benson, N. Am. LLC, 497 F.3d 133, 139
(2d Cir. 2007). Ultimately, a district court must enforce the
award “unless a litigant satisfies one of the seven enumerated
defenses [under the New York Convention]; if one of the
defenses is established, the district court may choose to
refuse recognition of the award.” Exclusive Trim, Inc., 698
F. Supp. 3d at 626 (citations omitted).
III. DISCUSSION
Neither party disputes the merits or damages awarded in
the Final Award and Flower Payment does not assert any Article
V defenses. In the absence of dispute on these points, the
Court need only determine whether the arbitration panel acted
within the scope of its authority. See Viamedia, Inc. v.
WideOpenWest Fin., LLC, No. 20 CIV. 4064, 2021 WL 3550236, at
*2 (S.D.N.Y. Aug. 11, 2021). Having reviewed the Petition,

6

the memorandum of law submitted by each of the parties, as
well as the accompanying documents on the record of this
action, the Court is persuaded that the arbitration panel
acted within the scope of its authority and confirms the Final
Award. Id. Nor are there other grounds for setting aside the
Final Award.
A. Fees and Costs
The Court confirms the award of reasonable fees and costs
incurred in the arbitration proceedings. Section 2.2(c) of
the MIPA provides that if the Collateral is not paid to Palmco
by the deadline, Palmco is entitled to ICDR fees, costs of
collection, costs of enforcement and attorney fees. (See MIPA
§ 2.2(c).)
Regarding specific fees and costs, the Final Award held
Flower Payment and GQA jointly and severally liable for
$20,872.50 in ICDR administration fees and $94,227.50 in
arbitrator compensation. (See Final Award ¶ 6.) Palmco was
awarded $350,275.11 in reasonable attorney’s fees and costs.
(Id. ¶ 6(d).) The Tribunal based its decision to award these
specific fees on the failure of Flower Payment to respond to
Palmco’s application for reasonable fees and costs incurred
in the proceedings, despite being given the opportunity to do
so. (Id. ¶ 2.) This is a “colorable justification” for the

7

award in this case. See In re Marine Pollution Serv., Inc.,
857 F.2d 91, 94 (2d Cir. 1988).
B. Interest
The Court also confirms the Final Award’s awarding of
interest. The Tribunal awarded Palmco a total of $604,180.08
in interest plus a post-award interest amount of $541.38 per
day to accrue from December 10, 2022, to the date of payment
in full of the Final Award. (Final Award ¶¶ 6(b), (c).) As
the Tribunal noted, the MIPA provides that if payment of the
Collateral is not timely made, Palmco is owed interest at the
rate of twelve percent per annum from the Execution Date
(November 8, 2019) to the date of payment in full of the Final
Award. (MIPA § 2.2(c).) The Court finds no basis to secondguess the Tribunal’s decision to hold Flower Payment and GQA
liable for the specified amount of the interest rate.
C. Fees and Costs in Federal Proceeding
In federal practice, the general rule is that each party
bears its own attorneys’ fees. McGuire v. Russell Miller,
Inc., 1 F.3d 1306, 1312-13 (2d Cir. 1993) (collecting cases).
However, “parties may agree by contract to permit recovery of
attorneys’ fees, and a federal court will enforce contractual
rights to attorneys’ fees if the contract is valid under
applicable state law.” Id. at 1313. Moreover, “New York courts
have awarded attorney’s fees for confirmation proceedings, in

8

addition to underlying arbitration proceedings, where the
fee-shifting

agreement

between

the

parties

so

permits.”

Coscarelli v. Esquared Hospitality LLC, No. 18-CV-5943-JMF,
2021 WL 293163, at *9 (S.D.N.Y. Jan. 28, 2021).
Neither party disputes the validity of the MIPA or the
meaning of the fee-shifting provision which provides that the
costs of collection and enforcement are due upon a default of
payment

of

the

Collateral.

(MIPA

§

2.2(c).)

The

Court

therefore finds that the MIPA expressly provides for an award
of

attorneys’

fees

incurred

in

the

instant

confirmation

proceeding.
When a prevailing party seeks attorneys’ fees pursuant
to a contractual provision, “the court will order the losing
party to pay whatever amounts have been expended by the
prevailing

party,

so

long

as

the

amounts

are

not

unreasonable.” Fleisig v. ED&F Man Cap. Mkts., Inc., No. 19
Civ. 8217 (DLC), 2021 WL 4459120, at *2 (S.D.N.Y. Sept. 29,
2021) (quoting F.H. Krear & Co. v. Nineteen Named Trs., 810
F.2d 1250, 1263 (2d Cir. 1987)). “Attorneys’ fees are awarded
by determining a presumptively reasonable fee, reached by
multiplying

a

reasonable

hourly

rate

by

the

number

of

reasonably expanded hours.” Bergerson v. N.Y. State Off. Of
Mental Health, Cent. N.Y. Psychiatric Ctr., 652 F.3d 277, 289
(2d Cir. 2011).

9

Courts in the Second Circuit generally use “the hourly
rates employed in the district in which the reviewing court
sits in calculating the presumptively reasonable fee.” Id.
(internal citations omitted). Those hourly rates “are the
market rates prevailing in the community for similar services
by lawyers of reasonably comparable skill, experience, and
reputation.” Gierlinger v. Gleason, 160 F.3d 858, 882 (2d
Cir. 1998) (citations omitted). In conducting this analysis,
courts “bear in mind all of the case-specific variables that
[the Second Circuit] and other courts have identified as
relevant to the reasonableness of attorney’s fees in setting
a reasonable hourly late.” Arbor Hill Concerned Citizens
Neighborhood Ass’n v. Cnty. Of Albany & Albany Cnty. Bd. Of
Elections, 522 F.3d 182, 190 (2d Cir. 2008) (emphasis in
original). Among the relevant case-specific variables is the
complexity of the matter being handled. See Lilly v. City of
New York, 934 F.3d 222, 231-32 (2d Cir. 2019).
Petitioner seeks an award of $186,686.50 in attorneys’
fees in connection with this Petition. Work on this petition
included drafting the petition to confirm the award, briefing
Flower

Payment’s

now-withdrawn

Motion

to

Dismiss,

and

drafting the application for attorney’s fees. In support of
the Fee Motion, Palmco’s attorneys, Hunton Andrews Kurth LLP
(“Hunton”) submitted a declaration listing the attorneys and

10

paralegals staffed on the matter, their hourly rates, and the
attorneys’ seniority levels and experience. (Dkt. No. 35
[hereinafter “Ostrower Declaration”].) Hunton also submitted
a Fees and Expense Record as an attachment to the declaration,
showing the tasks performed by Hunton and corresponding time
spent on each. (Dkt. No. 35-1 [hereinafter “Fees and Expense
Record”].)
On

behalf

of

Palmco,

four

attorneys

from

Hunton

litigated this petition, with support from a senior paralegal
and managing clerk. 4 (Ostrower Declaration ¶¶ 17-22.) Torsten
Kracht (“Kracht”), a partner at Hunton with over 27 years of
experience in complex commercial litigation and international
arbitration, billed 0.7 hours working on this matter at an
hourly rate of $1,170 to $1,275. (Id. ¶ 23; Fees and Expense
Record at 4, 11.) Silvia Ostrower (“Ostrower”), a counsel at
Hunton with over 22 years of experience focusing on domestic
and international litigation, billed 136.9 hours working on
this matter at an hourly rate of $925 to $1,020. (Ostrower
Declaration ¶¶ 18, 23; Fees and Expense Record at 1-15.)
Joseph J. Saltarelli (“Saltarelli”), a counsel at Hunton with
35 years of experience, billed 7 hours working on this matter
Petitioner’s submissions indicate that Gregory Hesse was also involved
with these confirmation proceedings but only expended 0.5 hours on the
matter and Petitioners do not otherwise address his work or qualifications
in their declarations. (Fees and Expense Record at 3.) Therefore, the
Court will not consider Hesse’s fees in determining its award.

4

11

at an hourly rate of $1,260. (Ostrower Declaration ¶¶ 20, 23;
Fees

and

Expense

Record

at

14-15.)

Mitchell

E.

McCloy

(“McCloy”), a mid-level associate at Hunton whose practice
focuses on commercial litigation, billed 32.7 hours on this
matter at an hourly rate of $750. (Ostrower Declaration ¶¶
21, 23; Fees and Expense Record at 9-13, 15-16.) Senior
Paralegal Raymond E. Galbraith (“Galbraith”), who has over
thirty years of experience, billed 12.7 hours on this matter
at an hourly rate of $440. (Ostrower Declaration ¶¶ 22-23;
Fees and Expense Record at 9-13, 15-16.) Bradford C. Mulder
(“Mulder”), Managing Clerk at Hunton with over 30 years of
experience, billed 8.8 hours on this matter at an hourly rate
of $500 to $525. (Ostrower Declaration ¶ 22; Fees and Expense
Record at 5-8, 11, 13, 15.)
The

Court

finds

that

the

Hunton

hourly

rates

are

unreasonably high for a petition to confirm an arbitral award.
Recently,

courts

in

this

district

examining

the

reasonableness of fees awarded in relation to petitions to
confirm

an

complexity

arbitral
of

the

award

have

confirmation

analyzed

the

relative

proceedings

to

determine

whether the fees are reasonable. See Access Bio, Inc. v.
Division 5 Labs, Inc., 23 Civ. 42820, 2024 WL 3084990, at *2
(S.D.N.Y. June 20, 2024); Sire Spirits, LLC v. Green, 21 Civ.
7343, 2022 WL 16578960, at *2 (S.D.N.Y. Nov. 1, 2022); Major

12

League Baseball Properties, Inc. v. Corproacion de Television
y Microonda Rafa, S.A., 19 Civ. 8669, 2021 WL 56904, at *3
(S.D.N.Y. Jan. 7, 2021). In those cases, billing rates similar
to the ones requested here were reduced under the rationale
that petitions to confirm arbitral awards are not as complex
as other commercial litigation proceedings. See, e.g., Sire
Spirits, 2022 WL 16578960, at *2; Major League Baseball
Properties, Inc., 2021 WL 56904, at *3-4.
Here, while challenging issues of law were raised in the
motion to dismiss briefing, the case does not otherwise
present sufficient complexities to warrant the high fees
charged here. Accordingly, the Court reduces the hourly rates
for

the

Hunton

attorneys

as
and

Ostrower,

and

Saltarelli

Spirits,

2022

WL

16578960

partners

and

$450

for

follows:

$750

$500

McCloy.

for

(awarding

the

associate

$750
in

for

Kracht,
See

hourly
a

Sire

fee

to

confirmation

proceeding that included briefing on a motion to vacate.)
Furthermore,

the

Court

reduces

the

hourly

rates

for

Galbraith, the paralegal, and Mulder, the managing clerk, to
$200 per hour. See 1079 Fam. Tr. Licensor, LLC v. Darij, No.
19 Civ. 4389, 2020 WL 9596279, at *1 (S.D.N.Y. Sept. 30, 2020
(“Courts in this district typically approve paralegal hourly
rates between $150 and $200.”)

13

Once reasonable hourly rates are established, courts
must assess the reasonable number of hours worked to determine
the

presumptively

reasonable

fee.

Arbor

Hill

Concerned

Citizens Neighborhood Ass’n v. Cnty of Albany, 522 F.3d 182,
183

(2d

Cir.

2008).

The

Court

must

consider

both

the

“contemporaneous time records . . . [that] specify, for each
attorney, the date, hours expended, and nature of the work
done,” N.Y. State Ass’n for Retarded Children v. Carey, 711
F.2d 1136, 1148 (2d Cir. 1983), and “its own familiarity with
the case . . . and its experience generally.” Clarke v. Frank,
960 F.2d 1146, 1153 (2d Cir. 1992). Based on the time entries
and detailed narratives, the Court finds that the gross number
of hours expended on this litigation is reasonable. However,
the

Court

is

troubled

by

the

ratio

of

associate

to

partner/counsel hours, which should typically reflect more
associate hours than partner/counsel hours. See Beastie Boys
v. Monster Energy Co., 112 F. Supp. 3d 31, 51 (S.D.N.Y. 2015).
In

particular,

counsel

Ostrower

expended

the

most

hours

(136.9) on this matter, doing the vast majority of work
including legal research, drafting the petition, and drafting
the

briefing

dismiss.

(See

in

relation

generally

to

Flower

Fees

and

Payment’s
Expense

motion

Record.)

to
The

associate on the matter, McCloy, expended a total of 32.7
hours on this matter. (See Fees and Expense Record at 12.)

14

While

the

Court

appreciates

the

difficult

legal

issues

involved in Flower Payment’s now-withdrawn motion to dismiss,
arguably much of the legal research and initial drafting could
have been accomplished by an associate, saving a considerable
amount in fees. For this reason, the Court will reduce
Ostrower’s hours by twenty five percent which when assessed
under

the

discussed

reduced
above,

attorney
results

and

in

paralegal

total

hourly

attorneys’

rates

fees

of

$108,565.
Petitioner also seeks $10,550 in costs associated with
a

vendor

that

specialized

in

service

under

the

Hague

Convention who served Flower Payment in Japan in connection
with this Petition. (Dkt. No. 33 at 14.) Because Flower
Payment did not respond to Palmco’s request to accept service
by email or otherwise waive service, the Court also approves
as reasonable the $10,550 expense for the vendor specializing
in service under the Hague Convention.
IV.

ORDER

For the foregoing reasons, it is hereby
ORDERED that the petition to confirm the non-domestic
arbitration award filed by petitioner Palmco Administration,
LLC (“Palmco”) (Dkt. No. 1) is GRANTED; it is further
ORDERED that judgment against respondent Flower Payment,
Inc. (“Flower Payment”) be entered in the amounts of (1)

15

$1,646,690.02 with $604,180.08 in interest plus post-award
interest of $541.38 per day from December 10, 2022 to the
date of payment in full of the Final Award ; (2) $350,275.11
in attorneys’ fees and costs in connection with the underlying
arbitration;

(3)

$110,662.50

in

arbitration

fees

and

arbitrator compensation; and (4) $119,115 in attorneys’ fees
and costs in connection with bringing the instant petition.
The Clerk of Court is directed to terminate all pending
motions and to close this case.
SO ORDERED.
Dated:

6 March 2025
New York, New York

_________________________
Victor Marrero
U.S.D.J.

16