On 29 June 2017, the New York State Appellate Division unanimously affirmed with costs orders rendered by the New York County Supreme Court which permanently enjoined the award creditor from enforcing a vacated award or from opposing the award debtor’s efforts to appeal or vacate an order of a French court that recognised the vacated award.
The judgment that the award creditor sought to vacate, vacated an arbitral award and was confirmed by the New York State Appellate Division itself on the ground that the arbitrators manifestly disregarded the law in failing to enforce a prior settlement agreement between the parties.
Nevertheless, the award creditor commenced an ex parte proceeding in France to enforce the vacated award. On or about 30 March 2016, without notification to the award debtor, the French court recognised the vacated award under French law and issued writs for the seizure of property belonging to the award debtor’s overseas affiliates and counterparties. The New York State Appellate Division noted that it is undisputed that the award creditor did not inform the French court that the award had been vacated by a New York Court.
The award creditor then moved the New York County Supreme Court to vacate the judgment. The award debtor moved to enjoin the former from enforcing the vacated award and to direct him to release any seizure or hold on the latter’s assets purporting to be premised on the award. The New York County Supreme Court issued a temporary restraining order, and the New York Appellate Division denied the award creditor’s application to vacate it.
In the appeal before the New York State Appellate Division, the main arguments of the award creditor in support of vacating the judgment of the New York County Supreme Court were the same as those made in the prior appeal. The New York State Appellate Division found that its resolution of the issues in the prior appeal is the law of the case and that the award creditor could not re-litigate those issues.
The New York State Appellate Division also stated that the New York County Supreme Court, inter alia, properly denied the motion to vacate the judgment as not brought within a reasonable time.
Further it noted that the New York County Supreme Court properly enjoined the award creditor from enforcing the vacated award, including in France, in the interests of protecting the New York judgment on the merits. The record demonstrated that the award creditor commenced the French proceeding in bad faith. In addition, the New York County Supreme Court properly declined to apply the doctrine of comity to the French court’s recognition of the vacated award.
Therefore, the New York State Appellate Division affirmed the orders of the New York County Supreme Court.
Source: Original order available at www.law.justia.com