Caml Ghana Limited et al v. Westchester Resources Limited
Filing
85
OPINION & ORDER: For the foregoing reasons, the Court grants CAML Ghana's motion to enforce the SDNY Stipulation and Order, and directs Westchester forthwith to furnish CAML Ghana with an executed stipulation of discontinuance that includes the Portland Companies. The Clerk of Court is directed to terminate the motion pending at docket number 72, and to return this case to the Court's suspense docket. (Signed by Judge Paul A. Engelmayer on 1/30/2015) (kgo)
USDC SDNY
DOCUMENT
ELECTRONICALLY FILED
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
DOC #:
DATE FILED: I I60I2ÔIâ
-X
CAML GHANA LIMITED, RATEL GROUP LIMITED,
CGA MINING LIMITED, ANd CENTRAL ASIA
MINERALS LIMITED,
13
Civ. 8124 (PAE)
OPINION & ORDER
Plaintiffs
-vWESTCHESTER RESOURCES LIMITED,
Defendant.
X
PAUL A. ENGELMAYER, District Judge:
This case arises out of a joint venture between CAML Ghana Limited ("CAML Ghana")
and V/estchester Resources Limited ("V/estchester") to prospect for gold on a plot of land (the
o'Tenement") in the Ashanti Gold Belt in Ghana. After relations between CAML Ghana and
'Westchester
broke down, CAML Ghana brought claims to arbitration in London, pursuant to an
arbitration clause in the parties' agreement. Soon after, V/estchester filed suit in court in Ghana,
arguing that its claims of fraud were not arbitrable under Ghanaian law, which governs the
parties' agreement. CAML Ghana prevailed in the arbitration, and then petitioned this Court to
confirm the arbitral award; Westchester challenged the petition on various grounds. After a
period of active litigation, the parties resolved that dispute through a stipulation, which this Court
so-ordered.
Now pending before the Court is CAML Ghana's motion to enforce this Court's
stipulation and order. The parties' dispute turns on the interpretation of that stipulation and
order, namely, whether V/estchester's agreement to dismiss the Ghana litigation covers litigation
against certain third parties or only against CAML Ghana. For the following reasons, the Court
finds CAML Ghana's interpretation of the stipulation and order clearly correct and grants the
motion to enforce.
I.
Backgroundl
A.
The Joint Venture Agreement
In 2008, CAML Ghana and Westchester entered into a Joint Venture Agreement ("JVA")
to conduct exploration and mine for gold. Caruso Decl. fl 2. Under the JVA, CAML Ghana
agreed to assess the feasibility of gold-mining in the Tenement and to make certain payments,
Dkt. 9, Ex. 1-A (ooJVA"), at $ 3. Westchester, for its part, agreed to transfer a 5l%o interest in the
Tenement to CAML Ghana. JVA $ a.1(c). The agreement states thatooany dispute arising out
or in connection with this Agreement . . . may be referred by aparty to arbitration," which
of
ooshall
be conducted in accordance with the Rules of the London Court of International Arbitration
(LCIA)" and, "fu]nless otherwise agreed by all partiesf,] . . . shall be held in London, England."
JVA $$ 17 ,1,
B.
17
.4, The agreement is governed by the laws of Ghana. JVA
$ 20.9.
The Arbitration and the Ghana Litigation
In March 2011,
'Westchester
challenged whether CAML Ghana had satisfied the
requirements to acquire the 51Yo interest in the Tenement. Caruso Decl. fl
4.
To resolve this
dispute, CAML Ghana initiated arbitration in London, while Westchester commenced litigation
in Ghana, Id.nn 5-6. The relevant history of each action is briefly summarized below.
First, on November 3,2011, CAML Ghana filed a request for arbitration with the LCIA.
Id. n 5. Although Westchester initially participated in the arbitration, see id,, it later challenged
I These facts are drawn from the Declaration of Kenneth A. Caruso in support of CAML
Ghana's motion to enforce the stipulation and order entered in this action, and the documents
attached thereto. Dkt.74 ('oCaruso Decl.").
2
the
jurisdiction of the arbiÍa| tribunal, arguing that fraud claims it had asserted were outside the
scope of the JVA's arbitration clause, id. n7
.
The tribunal rejected V/estchester's jurisdictional
challenge and held that Westchester had breached the JVA by initiating the Ghana litigation; it
therefore ordered Westchester to terminate that litigation.
Id.
Westchester refused to comply
with the tribunal's interim order and formally withdrew from the arbitration. Id. nn7-8.
On July 29,2013, the arbitral tribunal held a final hearing on the merits. Id. n 18.
Westchester did not participate.
Id, On September 26,2013,
the tribunal issued its Award,
ruling in favor of CAML Ghana on all claims. Id. n ß. The Award granted CAML Ghana,
among other remedies, declaratory relief establishing that CAML Ghana held the 51% interest in
the Tenement and dismissing all of Westchester's counterclaims. Id.
Second, on December 15, 2011, several weeks after
CAML Ghana had initiated the
arbitration, Westchester commenced the Ghana litigation by bringing suit in the Superior Court
of Judicature in the High Court of Justice in Accra, Ghana (the "Ghana Court") against CAML
Ghana, associated entities,2 and another company, St. Augustine Gold
& Copper Ltd. ("St.
Augustine"). Id. !f 6, Westchester brought claims for breach of contract andfraud. Id.
The Ghana Court initially stayed the Ghana litigation, with the consent of all parties,
pending resolution of the arbitration.
Id.
After withdrawing from the arbitration, however,
Westchester moved to set aside the stay. Id. fl
9.
On November 27,2072, the Ghana Court
granted Westchester's motion, and litigation resumed,
appeal challenging the decision to
Id. CAML
Ghana filed an interlocutory
lift the stay; on February 12,2013, the Ghana Court issued
The ooassociated entities" are Ratel Group Ltd., CGA Mining Ltd., and Central Asia Minerals
Ltd. These companies are also parties to this action; the Court refers to them, collectively, as
"CAML Ghana."
2
a
J
another stay of the Ghana litigation pending resolution of that appeal. Id. n
n.
The appeal was
still pending when the arbitral tribunal issued its Award on July 29,2013. See id.
On December 72,2012, during the brief interlude between the two stays of the Ghana
litigation, Westchester moved there to join the Portland House Group Limited and Portland
House Investments Limited (collectively, the "Portland Companies") as additional defendants.
Id. n
ß. Westchester claimed that the Portland Companies held certain collateral, which
Westchester could use to execute
a
judgment in its favor in the Ghana litigation. Id,F;x.3, at 10-
12. The Ghana Court granted Westchester leave to serve the motion for joinder outside the
jurisdiction and denied the Portland Companies' motion to set aside that order.
Id.I16.
The
Portland Companies then filed an interlocutory appeal challenging the Ghana Court's decision.
Id. InFebruary
2013, before that appeal was resolved, the Ghana Court stayed the joinder
proceeding along with the other Ghana litigation proceedings. Id,
C.
\
17
.
This Action
On November 14,2013,
CAML Ghana petitioned this Court to confirm the arbitral
award, enter judgment, and issue an anti-suit injunction against the Ghana litigation. Dkt. 1 ,7-9.
On January 30,2014, Westchester moved to dismiss for lack of personal jurisdiction. Dkt. 16-
18. On February 6,2014, Westchester filed another motion, arguing that the Court should
dismiss the petition on grounds of forum non conveniens and comity, and that the arbitrator
lacked jurisdiction to decide the fraud
claim. Dkt.2I-24,28.
On May 20,2014, after briefing and argument on CAML Ghana's petition and
'Westchester's
motions to dismiss, and with the encouragement of the Court, the parties executed
a stipulation transferring this case to the Court's suspense
signed and so-ordered the stipulation. Dkt. 71
docket. On May 21,2014, the Court
("SDNY Stipulation and Order"). The effect of
4
the SDNY Stipulation and Order was to consolidate before the High Court of England and
Wales-which all parties agreed \ /as an appropriate forum-resolution of the disputes between
the parties that were pending in various
oocommence
a
fora. Specifically, Westchester agreed to
proceeding in the High Court of England and Wales raising any and all grounds that it may have
to set aside the awards" issued by the LCIA (the "London proceeding" or "English proceeding").
Id. n
l. Westchester also agreed to stay the Ghana litigation pending final disposition of the
London proceeding, id.n2, and to execute a stipulation discontinuing the Ghana litigation with
prejudice, which CAML Ghana is entitled to hold during the London proceeding and to file if the
English court reaches a decision in its favor, id.fln 3-4. All parties agreed to "abide by a final
o'no
further litigation arising out of, or
decision of the English Courts," id. n 4, and to engage in
in connection with" the JVA or the arbitration, subject to certain exceptions, id.n 5. Finally, the
parties consented to this Court's continuing jurisdiction over this action to enforce the SDNY
Stipulation and Order. Id, n 6.
On August 78,2014, CAML Ghana flrled a motion to enforce the SDNY Stipulation and
Order, Dkt.72, along with a memorandum of law, Dkt. 73 ("Pet. Bt."), and a declaration, Dkt.
74 ("Caruso Decl."), According to CAML Ghana, the parties have stayed the Ghana litigation,
but Westchester has not provided it with the agreed-upon executed stipulation discontinuing that
litigation. Pet. Br. 12. CAML Ghana explains that, although Westchester acknowledges its duty
to provide CAML Ghana with a stipulation discontinuing the Ghana litigation, the parties dispute
whether the SDNY Stipulation and Order requires Westchester to execute a stipulation that
would discontinue the action solely against CAML Ghana (as Westchester argues) or against the
Portland Companies as well (as CAML Ghana contends).
5
1d,
On September 25,2074, Westchester filed its opposition. Dkt. 80 ("Resp.
Br.").
V/estchester defends its position that the SDNY Stipulation and Order does not require
There,
it to
include the Portland Companies in the provisional stipulation of discontinuance. See id. I-2,7.
On October 20,2014, CAML Ghana submitted its reply. Dkt. 81 ("Pet. Reply").
il.
Discussion
The question presented by the parties is a narrow one: Pursuant to the SDNY Stipulation
and Order, must Vy'estchester execute-and, depending on the outcome of the London
proceeding, permit CAML Ghana to
CAML Ghana
file-a
stipulation discontinuing the Ghana litigation as to
and the Portland Companies, or as to
CAML Ghana only? Resolution of this
issue turns on the proper interpretation of the SDNY Stipulation and Order.
A.
Applicable Legal Principles
Stipulations "reflect a contract between the parties" and are, therefore, generally
construed according to "ordinary rules of contract interpretatiort." Doe v. Pataki,481 F.3d 69,
75 (2d Cir.2007); see also, e.g,, (Inited States v. Nee,573 F. App'x 37,39 (2d Cit.2014)
(summary order); Cameron
Int'l Trading Co. v. Hawk Importers, Inc.,50I
F.
App'x 36,38 (2d
Cir.2012) (summary order). But a stipulation is also "oan order of the court and thus, by its very
nature, vests the court with equitable discretion to enforce the obligations imposed on the
parties."' InrePandoraMedia,lnc.,No. 12Civ.8035(DLC),2013 WL5211927,at*4
(S.D.N.Y. Sept. 17, 2013) (quoting United States v. Local 359, United Seafood Workers,55 F.3d
o"randomly expand or contract the terms agreed upon" by
64,69 (2dCir.1995)). A court cannot
the parties, but "judicial discretion in flexing its supervisory and enforcement muscles is broad."
U.S. ex rel. Anti-Discrimination Ctr, of Metro N.Y., Inc. v. llestchester
6
County,712F.3d76l,
767 (2d Cir. 2013) (quoting Davis v. N.Y.C. Hous. Auth.,278F,3d 64, 80 (2dCit.2002))
(internal quotation marks omitted).
Both parties apply New York law governing contract interpretation, see Pet. Br. 15; Resp
Br, 8, and Second Circuit case law supports applying the law of the forum to stipulations entered
in federal courts. See Doe,481 F.3d at 81 n.3 ("This court has implicitly held that the state law
of the forum applies to stipulations settling federal claims.") (citing Torres v. Walker,356 F.3d
238,24546 (2d Cir,2004) (applying New York law to a settlement agreement entered in the
Northern District of New York)). UnderNew York law, "'[t]he fundamental objective of
contract interpretation is to give effect to the expressed intentions of the parties."' Lockheed
Martin Corp. v. Retail Holdings, N,V.,
639 F.3d 63, 69 (2d
Cir.2011) (quoting Klos v. Polskie
Linie Lotnicze,133 F.3d 164, 16S (2d Cir.1997)) (alteration in original). The threshold question
is whether the'olanguage the parties have chosen is ambiguous," Gary Friedrich Enters., LLC
Marvel Characters, Lnc.,776F.3d302,313 (2d Cir.2013). Language is ambiguous "only if
v.
a
ois
capable of more than one meaning when viewed objectively by a reasonably
contract term
intelligent person who has examined the context of the entire integrated agreement."' In re
Lehman Bros. Holdings Inc.,76I F.3d 303, 309 (2d Cir. 2014) (quoting Lockheed Martin, 639
F.3d at 69). If the contract "is unambiguous on its face, it must be enforced according to the
plain meaning of its terms." Lockheed Martin,133 F.3d at 69 (citingSouth Rd. Assocs., LLC
IBM,4 N.Y.3d 272,793 (2005)). If the contract "is ambiguous,
v.
a court may consider extrinsic
evidence of the parties' intent." Lehman Bros.,761 F.3d at309.
B.
Analysis
The disputed provision of the SDNY Stipulation and Order states that "Westchester shall
execute a stipulation discontinuing the Ghana Litigation with prejudice ('Ghana Stipulation
7
of
Discontinuance'), to be held by Petitioners' counsel (White & Case) pending disposition of the
London proceeding, subject to Paragraph
4." SDNY Stipulation and Order fl 3. Paragtaph
4
provides that CAML Ghana "may file the Ghana Stipulation of Discontinuance" if the arbitration
awards are wholly confirmed but must return the Ghana Stipulation of Discontinuance to
V/estchester if the awards are wholly set aside. Id.
n4. Significant
here, Paragraph2 defines
"the Ghana Litigation" as 'oSuit No. 14912012 and all related appeals" in "both courts," referring
to the Ghanaian trial and appellate courts. Id.
n2.
And, equally significant,Paragraph 2 states
that this docket number encompasses the proceedings against CAML Ghana and against the
Portland Companies. See id. TT 24, 2B(1)(a).
The language in Paragraph2 is unambiguous-it "has a definite and precise meaning, as
to which there is no reasonable basis for a difference of opinion," Lockheed Martin,639 F.3d at
69 (citing Ilhite v. Cont'l Cas Co.,9 N.Y.3d 264,267 (2007)). It plainly provides that the
Ghana Stipulation of Discontinuance shall cover "the Ghana Litigation," meaning "Suit No.
14912012 and all related appeals."
SDNY Stipulation and Order T1T2-3. And no person could
reasonably dispute that Suit No. 14912012 includes the Portland Companies proceedings, and
that the Portland Companies' interlocutory appeal is a "related appeal." Id.
\28(I)(a).
Other provisions in the SDNY Stipulation and Order reinforce this commonsense
reading. In particular,Paragraph 5 states that, "fs]ubject to Paragraph 54, there will be no
further litigation in any jurisdiction arising out
of
or in connection with, the Joint Venture
Agreement, the LCIA Arbitration, the English proceeding or the Ghana Litigation." Id. n 5.
Pursuant to Paragraph
54, "[t]he Parties agree that any claims or litigation between Westchester
and St, Augustine Gold and Copper Ltd. is expressly excluded from the operation or effect
this Stipulation and Order, including, but not limited to, the operation and effect of this
8
of
Paragraph
5." Id.lT5A. Applying "the familiar principle of expressio unius"-that
o'the
mention
of one thing implies the exclusion of the other"-the parties' express exclusion of St. Augustine
from the provisions of the SDNY Stipulation and Order mandating discontinuance and
precluding further litigation makes clear, by implication, that those provisions apply to the
Portland Companies because they are not similarly excluded. Cordiano v. Metacon Gun Club,
\nc.,575 F.3d 199, 221 (2d Cir. 2009) (quoting Hardy v. N.Y. City Health & Hosps. Corp.,164
F
.3d 789,794 (2d Cir. 1999)) (internal quotation marks omitted).
In defense of its contrary interpretation, V/estchester emphasizes that the "only mention"
of the Portland Companies in the SDNY Stipulation and Order is in Paragraph2B, which
'opertains solely to the stay of the Portland Companies' appeal." Resp.
correct thatParagraph2B, considered in isolation, requires
appeal-and nothing else." Id. at 5. But the Court must
ooa
ooread
Br. 4-5. V/estchester is
stay of the Portland Companies'
the integrated contract 'as a whole
to ensure that undue emphasis is not placed upon particular words and phrases."' Law
Debenture Trust Co. of N.Y. v. Maverick Tube Corp.,595 F.3d 458,468 (2d Cir.2010) (quoting
Bailey v. Fish & Neave,
S
N.Y.3d 523,528 (2007)). Considering the agreement
as a whole, the
operative section as to the Ghana Stipulation of Discontinuance is Paragraph 3, not Paragraph
28. Moreover, in context,
parties
will
Paragraph
28 serves two obvious purposes: First, it clarifres that the
stay the interlocutory appeal associated with the Portland Companies joinder
proceeding, which had been assigned a unique appellate docket number. ,See SDNY Stipulation
and Order
tt2B(1)(a). Second, it
litigation resumes. See id.
TfT
sets deadlines for the joinder proceeding in the event the Ghana
28(1Xb),28(2). The separate discussion of the Portland
Companies in Paragraph 28 does not, therefore, imply thatParagraph 3 or Paragraph 5 excludes
those entities.
9
Because the Court holds that the language of the SDNY Stipulation and Order is
unambiguous, it need not reach the parties' other arguments. See Lockheed Martin,l33 F.3d at
69. The Court notes, however, that the extrinsic evidence the parties have provided decisively
supports CAML Ghana's interpretation. In particular, the drafting history of the SDNY
Stipulation and Order reveals that Westchester sought to exclude litigation against the Portland
Companies as well as St. Augustine, that CAML Ghana rejected Westchester's proposal, and that
the resulting language of the SDNY Stipulation and Order tracks the language put forth by
CAML Ghana. Pet. Br. 16-24; Caruso Decl. Exs. 17-20. Also significant, the transcript of
a
January 2013 oral argument before the Ghana Court reflects that Westchester sought to join the
Portland Companies solely in their capacity as trustees for CAML Ghana affiliates. Caruso Decl.
Ex. 3, at 12-13. Specifically, Westchester represented that the Portland Companies "are trustees
of shares which were used as collateral,'id, at 13, and Westchester intends
shares
ooto
go after" those
if the Ghana litigation results in a money judgment in its favor , id. at 12. Given
Westchester's concession that "we have no cause of action against the persons sought to be
joined," i.e., the Portland Companies , id. at 13, there is no basis for continuing the proceeding to
join the Portland Companies after terminating the substantive litigation against CAML Ghana.
Accordingly, if the Court had found the SDNY Stipulation and Order to be ambiguous, it would
have reached the same conclusion on the merits.
CONCLUSION
For the foregoing reasons, the Court grants CAML Ghana's motion to enforce the SDNY
Stipulation and Order, and directs Westchester forthwith to furnish CAML Ghana with an
executed stipulation of discontinuance that includes the Portland Companies.
l0
The Clerk of Court is directed to terminate the motion pending at docket number 72, and
to return this case to the Court's suspense docket.
SO ORDERED.
P,,,,,,!
ñ,
Paul A. Engelmayer
United States District Judge
Dated: January 30,2015
New York, New York
11
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