The Decapolis Group, Ltd. v. Mangesh Energy, LLC et al

Filing 14

Memorandum Opinion and Order: The 6 Motion to Dismiss is DENIED; the 7 Motion to Seal is GRANTED, and the Court confirms the arbitration award. (Ordered by Judge Barbara M.G. Lynn on 2/24/2014) (axm)

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION

THE DECAPOLIS GROUP, LLC,
Petitioner,
v.
MANGESH ENERGY, LTD. and HKN
ENERGY, LTD.,
Respondents.

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No. 3:13-cv-1547-M

MEMORANDUM OPINION & ORDER
Before the Court are the Motion to Dismiss [Docket Entry #6] and the Motion to Seal
[Docket Entry #7], filed by Respondents Mangesh Energy, Ltd. (“Mangesh”) and HKN Energy,
Ltd. (“HKN”). For the reasons stated below, the Motion to Dismiss is DENIED; the Motion to
Seal is GRANTED, and the Court confirms the arbitration award.
I. BACKGROUND
On November 14, 2006, Mangesh entered into a consulting contract with The Decapolis
Group, LLC (“Decapolis”), for Decapolis to help Mangesh obtain oil and gas rights in a region in
Kurdistan. The contract provides for compensation to Decapolis, some of which depends upon
contingent future events. The contract contains an arbitration provision which reads, in part,
that, “The arbitrator’s decision shall be final and binding on the parties. Judgment upon the
award rendered by the arbitrator may be entered in a court of law having jurisdiction thereof.”
The contract also contains a provision that the parties will not disclose confidential information,
defined as “information . . . relating to the business, products, affairs and finances of a
Party . . . .” On January 22, 2011, HKN agreed to assume all duties owed by Mangesh.
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A dispute arose between the parties regarding Decapolis’s compensation under the
contract. On November 15, 2010, Decapolis requested arbitration of the dispute through the
International Chamber of Commerce Court of Arbitration. The arbitration took place in January
2012, and the parties agreed that the proceedings would be confidential. On April 25, 2012, the
Arbitrator rendered his final award (the “Award”), finding that (a) the contract was valid and
binding on the parties and (b) that in addition to attorney’s fees and expenses, Decapolis would
be entitled to the compensation described in the contract, including future payments for
milestone events and a Net Profit Interest. As Decapolis concedes, the Respondents have paid
Decapolis’s attorney’s fees and costs for the arbitration, as well as the payment for the first
milestone event, and have not attempted to vacate or modify the Award.
Decapolis filed suit in this Court on April 19, 2013, requesting the Court to confirm the
Award. On July 5, 2013, Respondents filed a Motion to Dismiss for lack of jurisdiction under
Fed. R. Civ. P. 12(b)(1) and for failure to state a claim under Fed. R. Civ. P. 12(b)(6), arguing
that because Respondents had satisfied all that was owing under the Award, there was no case or
controversy, and Decapolis was not entitled to judicial confirmation of the Award. On the same
date, Respondents filed a Motion to Seal the Petition, all exhibits thereto, and all subsequent
filings that may disclose the parties’ confidential information.
II. MOTION TO DISMISS
The judicial power of federal courts is restricted to “cases” and “controversies.” U.S.
Const. art III, § 2; U.S. Parole Comm’n v. Geraghty, 445 U.S. 388, 396, (1980). Respondents
argue that there is no case or controversy here for the court to resolve since Respondents have
complied with the Award and have not given any indication that they will stop complying. In
response, Decapolis notes that the parties’ agreement provides for judicial confirmation of an

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arbitration award. Pet.’s Resp., Ex. A at ¶ 19.4. Decapolis further argues that such confirmation
is mandated by the Federal Arbitration Act (“FAA”). 9 U.S.C. § 9. The FAA requires that if a
party applies to a court for an order confirming an arbitration award, the court “must grant such
an order unless the award is vacated, modified, or corrected . . . .” Id. (emphasis added).
The Court finds that, in light of the paragraph in the parties’ agreement providing for
confirmation of an arbitration award, and the FAA’s mandate that courts confirm such awards
except in limited circumstances, Article III of the Constitution is satisfied, and the Court has
jurisdiction to confirm the Award. See McVay v. Halliburton Energy Servs., Inc., 688 F. Supp.
2d 556, 564 (N.D. Tex. 2010) (O’Connor, J.) (holding that “there is no requirement that a party
refuse to honor the arbitration award before a court can confirm the award”); Variable Annuity
Life Ins. Co. v. Bencor, Inc., No. H-05-1843, 2006 WL 1492249, at *3-4 (S.D. Tex. May 30,
2006) (denying a motion to dismiss and confirming an arbitration award where the party
objecting to confirmation did not contest the award, had paid it in full, and did not seek to vacate
or modify the award). The Plaintiff’s pleading states a claim for the confirmation of the Award.
Therefore, the Motion to Dismiss is DENIED.
III. MOTION TO SEAL
“[B]ased on the nature of democracy and the ‘citizen’s desire to keep a watchful eye on
the workings of public agencies,’” there is a presumption that judicial records are to be kept open
to the public. United States v. Abdallah, No. H–07–155, 2009 WL 2246156, at *2 (S.D. Tex.
July 24, 2009) (quoting Nixon v. Warner Commc’ns, Inc., 435 U.S. 589, 597 (1978)).
Nevertheless, the public’s right to access court records is not absolute, and district courts have
the discretion to seal documents if the interest favoring nondisclosure outweighs the presumption
in favor of the public’s common law right of access. S.E.C. v. Van Waeyenberghe, 990 F.2d 845,

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848 (5th Cir. 1993); Belo Broad. Corp. v. Clark, 654 F.2d 423, 430-33 (5th Cir. 1981); United
States v. Raybould, 130 F. Supp. 2d 829, 831 (N.D. Tex. 2000) (McBryde, J.).
The Award contains extensive findings of fact and conclusions of law. Respondents
maintain that it also contains sensitive information such as business strategies and the
developmental progress of their oil and gas exploration. Decapolis responds that the information
in the Award came from open sources, such as the Internet and news releases from the Kurdistan
Regional Government. After reviewing the Award, the Court finds that any public interest in the
Award is minimal and counterbalanced by the interest in confidentiality expressed in the parties’
agreement. Accordingly, the Motion to Seal is GRANTED.
The parties agreed that if the Court denied Defendant’s Motion to Dismiss and concluded
that Article III is satisfied, there is no other basis for the Court not to confirm the Award. The
Court will therefore do so by separate judgment.
SO ORDERED.
February 24, 2014.

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BARBARA M. G. LYNN
UNITED STATES DISTRICT JUDGE
NORTHERN DISTRICT OF TEXAS

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