United States District Court, W.D. Pennsylvania
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
[Copyrighted Material Omitted]
For CALBEX MINERAL LIMITED, Plaintiff: Jonathan D. Steele, LEAD ATTORNEY, Alex J. Barker, Marcus B. Schneider, Steele Schneider, Pittsburgh, PA.
For ACC RESOURCES CO., L.P., Defendant: Jonathan B. Skowron, LEAD ATTORNEY, Schnader Harrison Segal & Lewis LLP, Pittsburgh, PA; Keith E. Whitson, LEAD ATTORNEY, Schnader, Harrison, Segal & Lewis, Pittsburgh, PA.
Joy Flowers Conti, Chief United States District Judge.
Pending before the court is a motion for summary judgment (ECF No. 31) filed by plaintiff Calbex Mineral Limited (" Calbex" ) to enforce an arbitral award against defendant ACC Resources Co., L.P. (" ACC" ). The arbitral award was issued on November 19, 2012, by the China International Economic & Trade Arbitration Commission (" CIETAC" ). After consideration of the parties' submissions and the applicable legal principles, the court concludes that in light of the summary judgment standard of review, Fed.R.Civ.P. 56, and based upon the evidence of record, Calbex adduced evidence sufficient to show the arbitral award should be enforced, and ACC failed to adduce evidence sufficient to establish a genuine dispute of material fact with respect to whether any of the enumerated defenses provided for in the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the " New York Convention" ), adopted June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38, 9 U.S.C. § 201, et seq. (enforcing the New
York Convention), applies in this case. Accordingly, Calbex's motion for summary judgment will be granted, the arbitral award will be enforced, and Calbex will be entitled to post-award, prejudgment interest, but not attorneys' fees, for the reasons set forth herein.
A. Procedural Background
On February 22, 2013, Calbex, which is incorporated under the laws of the British Virgin Islands and has its central office in China, commenced this action by filing a complaint against ACC to enforce the arbitral award issued by CIETAC on November 19, 2012. (ECF No. 1; ECF No. 42 ¶ 1.) On March 27, 2013, ACC, a limited partnership organized under the laws of New Jersey with its principal office in New Jersey, filed an answer in which it denied that the award is enforceable by this court. (ECF No. 6; ECF No. 42 ¶ 2.)
On April 17, 2014, the court issued an order setting the schedule for the filing of a summary judgment motion. (ECF No. 30.) On May 16, 2014, pursuant to the court's order, Calbex filed a motion for summary judgment, (ECF No. 31), a brief in support of its motion, (ECF No. 32), and a concise statement of material facts. (ECF No. 33.) On June 16, 2014, ACC filed its brief in opposition to Calbex's motion for summary judgment, (ECF No. 35 redocketed to ECF No. 38), a responsive concise statement of facts, (ECF No. 36), and an appendix in support of its opposition brief. (ECF No. 37.)
On June 30, 2014, Calbex filed a reply brief in support of its motion for summary judgment and a reply to ACC's statement of facts. (ECF Nos. 39, 40.) On July 7, 2014, ACC filed a motion for leave to file a sur-reply in opposition to plaintiff's motion for summary judgment. (ECF No. 41.) On July 8, 2014, the parties filed a combined concise statement of material facts. (ECF No. 42.) On July 9, 2014, the court granted ACC's motion for leave to file a sur-reply and the sur-reply was filed on July 10, 2014. (ECF Nos. 43, 44.) Calbex's motion for summary judgment having been fully briefed is now ripe for disposition.
B. Factual Background
The factual background is derived from the undisputed evidence of record and the disputed evidence of record viewed in the light most favorable to the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986) (" The evidence of the nonmovant is to be believed, and all justifiable inferences are to be drawn in his favor." ).
1. CIETAC's and the Shanghai Sub-commission's Background
CIETAC is a permanent international arbitration commission created to independently resolve economic and trade disputes. (ECF No. 42-1 at 131.) " It was set up by the China Council for the Promotion of International Trade (China Chamber of International Commerce) under
the authority of the relevant State Order and in accordance with the law." (Id.) CIETAC is based in Beijing and, pursuant to regulation, has the right to establish and maintain sub-commissions. (Id.) CIETAC has established sub-commissions in Shenzhen, Shanghai, Tianjin and Chongqing. (Id. at 140.) The sub-commissions are CIETAC branches which are required to accept and arbitrate cases pursuant to CIETAC's arbitration rules. (Id.) Parties submitting disputes to CIETAC have the right to submit their case directly to a CIETAC sub-commission. (Id.)
2. The Shanghai Sub-Commission Declaration of Independence and its Termination From CIETAC
Sometime before May 1, 2012, the Shanghai sub-commission declared independence from CIETAC. (ECF No. 42-1 at 131.) On May 1, 2012, CIETAC released a statement that provided:
Recently, without any approval the CIETAC Shanghai Sub-Commission which is a branch office of CIETAC, declared that it [was] an independent arbitral institution, constituted its own commission, published its own arbitration rules and adopted its own panel of arbitrators. Such conducts have violated the Arbitration Law of China and the relevant regulations of the State Council as well as CIETAC's Articles of Association, causing confusion in the domestic and international arbitration communities and seriously affecting parties' exercise of their arbitration rights.
Id.) The statement provided that the Shanghai sub-commission's act of declaring independence from CIETAC was " null and void." (Id.)
On August 1, 2012, CIETAC released an announcement that provided in pertinent part:
1. As from 1 August 2012, CIETAC's authorization to the CIETAC Shanghai Sub-Commission and the CIETAC South China Sub-Commission for accepting and administering arbitration cases is hereby suspended.
2. As from 1 August 2012, where parties have agreed to arbitrate their disputes by the CIETAC Shanghai Sub-Commission or the CIETAC South China Sub-Commission , the parties shall submit their applications for arbitration to CIETAC and the CIETAC Secretariat shall accept such arbitration applications and administer such cases. Without CIETAC's authorization, no institutions shall have the right to accept and administer the afore-mentioned arbitration cases.
Id. at 134.) On December 31, 2012, the interaction between the CIETAC and its Shanghai sub-commission culminated with the following announcement from CIETAC:
The CIETAC Shanghai Sub-Commission and the CIETAC South China Sub-Commission have decided without authorization not to accept the lawfully revised CIETAC Arbitration Rules (2012), set up respectively their own arbitration rules and panels of arbitrators, refused to remain under the leadership of CIETAC in respect of case administration, and declared themselves independent arbitration commissions.
In order to uphold the uniformity of the legal system of arbitration in China, safeguard parties' arbitration rights and ensure CIETAC's normal business operations upon authorization and approval by the CCPIT (CCOIC) and in accordance with the Arbitration Law of China, the CIETAC Articles of Association and the CIETAC Arbitration Rules, CIETAC hereby announces the following decision on the issues concerning the CIETAC Shanghai Sub-Commission
and the CIETC South China Sub-Commission:
2. Authorization to the CIETAC Shanghai Sub-Commission and the CIETAC South China Sub-Commission for accepting and administering arbitration cases is hereby terminated.
7. Cases accepted and administered by the CIETAC Shanghai Sub-Commission and the CIETAC South China Sub-Commission before 1 August 2012 may be concluded in accordance with the CIETAC Arbitration Rules and under the uniform leadership of CIETAC in respect of case administration as provided in the Rules.
Id. at 137-38.)
3. The Disputes Between Calbex and ACC
This suit concerns two independent contracts: 1) the contract titled " 2009ZC1216," which the parties entered into on December 16, 2009 (the " 2009 contract" ) (ECF No. 42-1 at 80); and 2) the contract titled " 2010ZC0211," which the parties entered into on February 11, 2010 (the " 2010 contract" ) (ECF No. 42-1 at 53). Both contracts contained the following arbitration clause (the " arbitration clause" ):
Arbitration. All disputes arising between the parties in connection with Contract shall be submitted to China International Economic & Trade Arbitration Commission (" CIETAC" ) for settlement by Arbitration in accordance with the CIETAC's provisional rules of procedure. The award rendered by CIETAC shall be final and binding on both parties.
ECF No. 42 ¶ 29; ECF No. 42-1 at 24).
a. The 2009 Contract Dispute
In 2009, Calbex agreed to provide ACC 1,000 tons of brown fused alumina to be sold to third parties in Brazil. (ECF No. 42 ¶ 27.) ACC alleges that the vast majority of the product was rejected as defective by ACC's clients. (Id.; ECF No. 37-1 ¶ 3.) ACC sought reimbursement of the purchase price from Calbex. (Id.) Calbex refused to return the purchase price or negotiate with ACC regarding the 2009 contract because it disputed the assertion that the product was defective. (ECF No. 42 ¶ 27.)
b. The 2010 Contract Dispute
On February 11, 2010, Calbex and ACC entered into the 2010 contract. (Id. ¶ ¶ 7, 9.) Pursuant to the 2010 contract, ACC purchased 2,100 megatons of brown corundum from Calbex at a unit price of $570 per megaton for a total contract price of $1,197,000. (Id. ¶ 7.) On April 16, 2010, Calbex tendered the full amount of goods as required under the 2010 contract. (Id. ¶ 10.) ACC received the goods and did not object to the quality of the goods. (Id. ¶ 11.) ACC offered to pay only 70% of the 2010 contract purchase price and offered to pay the remaining 30% of the 2010 contract purchase price after the dispute over the 2009 contract was resolved. (Id. ¶ 12.) Calbex accepted the payment terms proposed by ACC to avoid greater loss. (Id. ¶ 13.)
ACC paid Calbex $838,900, representing 70% of the 2010 contract price. (Id. ¶ 28.) After receiving 70% of the 2010 contract price, Calbex sought to recover the outstanding balance, i.e., $359,100. (Id. ¶ 14.) On December 14, 2010, Calbex submitted a request to CIETAC for arbitration of its dispute with ACC regarding payment of the remaining 30% of the 2010 contract. (ECF No. 42 ¶ 15.) Calbex requested that CIETAC determine that ACC was obligated to pay the remaining 30% balance of the contract price. (Id. ¶ 16.)
The dispute over the 2010 contract was assigned to a panel and scheduled for a hearing in Beijing. (Id. ¶ 32.) The hearing on the 2010 contract was held on March 29, 2011. (Id.) At the hearing, neither party argued that the dispute over the 2009 contract had been resolved. (Id.) The Beijing panel concluded that the parties had indeed modified the payment terms of the 2010 contract and that the final 30% of the 2010 contract purchase price was not due until the dispute over the 2009 contract dispute was resolved. (Id. ¶ 33; ECF No. 42-1 at 53-54). The Beijing panel gave the parties three months to settle the dispute with respect to the 2009 contract. (ECF No. 42-1 at 51.) The parties did not resolve the dispute with respect to the 2009 contract within three months of the March 29, 2011 hearing before the Beijing panel. (Id.)
4. Calbex's Unilateral Submission of the Shanghai Award to the Beijing panel
In June 2011, ACC submitted the dispute with respect to the 2009 contract for resolution by arbitration, pursuant to the arbitration clause. (ECF No. 42 ¶ 38.) ACC either submitted the dispute with respect to the 2009 contract directly to the Shanghai sub-commission or CIETAC referred the dispute with respect to the 2009 contract to the Shanghai sub-commission. (ECF No. 37-1 ¶ 15; ECF No. 42-1 at 51.) On June 30, 2011, ACC sent a letter to the " arbitration commission" indicating that the 2009 contract dispute was submitted to the Shanghai sub-commission. (ECF No. 42-1 at 51; ECF No. 37-1 ¶ 16.) On or about October 25, 2012, the Shanghai sub-commission panel issued its decision with respect to the 2009 contract dispute (the " Shanghai award" ), which was favorable to Calbex. (ECF No. 42 ¶ 46.) The first page of the Shanghai award was entitled: " SHANGAI BRANCH OF CHINA INTERNTAITONAL ECNOMIC AND TRADE ARBITRATION COMMISSION Arbitral Award." (ECF No. 42-1 at 78.) The Shanghai award provided that " [t]he Arbitration Rules of China International Economic and Trade Arbitration Commission which came into force as of May 1, 2005 (hereinafter referred to as " the Arbitration Rules" ) are applicable to the arbitration procedures for this case." (ECF No. 42-1 at 79.)
On October 24 or 25, 2012, Calbex contacted the Beijing CIETAC office to inquire about the status of the arbitration with respect to the 2010 contract. (ECF No. 37-2.) Calbex was asked about the status of the Shanghai sub-commission arbitration with respect to the 2009 contract. (Id.) Calbex informed the Beijing panel that the arbitration with respect to the 2009 contract was resolved. (Id.) Calbex was asked to submit to the Beijing panel proof of the resolution of the dispute with respect to the 2009 contract. (Id.) On October 30, 2012, Calbex provided the Beijing panel a copy of the Shanghai award. (ECF No. 42-1 at 51.)
Neither Calbex nor the Beijing panel notified ACC that Calbex had submitted the Shanghai award to the Beijing panel. (ECF No. 42 ¶ 37.) ACC learned for the first time that Calbex advised the Beijing panel that the 2009 contract dispute had been resolved during discovery in this enforcement action. (Id.) ACC did not have an opportunity to present argument to the Beijing panel with respect to whether the 2009 contract dispute was resolved. (Id.)
5. The Beijing Award
On November 19, 2012, the Beijing panel issued its award with respect to the 2010 contract dispute (the " Beijing award" ). (ECF No. 42-1 at 48-70.) In the Beijing award the relief requested from Calbex was described as follows:
1. [ACC] pays the purchase price US$359,100.00 to [Calbex];
2. [ACC] pays RMB 120,000.00 yuan or the equivalent to U.S. Dollars to compensate the clamant attorney's fee;
3. [ACC] bears the arbitration fee.
ECF No. 42-1 at 56.) The defenses asserted by ACC were described in the ...