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$1.55 million arbitration award survives attack

Where a Singaporean arbitration award was entered against the defendant for $1.55 million, plus legal fees and arbitration costs, his subject matter jurisdiction, personal jurisdiction and merits attacks on that award were rejected.

Background

Following a dispute over an agreement involving the sale of real property in the Philippines, Rachan Reddy, a citizen and resident of Vietnam, initiated arbitration proceedings in Singapore against Rashid Buttar, then a citizen and resident of North Carolina. After Reddy obtained an award against Buttar of $1.55 million, plus legal fees and arbitration costs, he commenced an action in the district court to enforce the award under the convention. The court denied Buttar’s jurisdictional challenges and granted Reddy summary judgment.

Subject matter jurisdiction

Buttar contends first that the district court lacked subject matter jurisdiction over Reddy’s action. Noting that any agreement enforceable under the convention “must be ‘in writing . . . signed by the parties or contained in an exchange of letters or telegrams,’” he argues that he “neither executed the contract in question nor consented to arbitration.”

The United States acceded to the convention in 1970, and Congress enacted an implementing statute that same year. In that statute, see 9 U.S.C. § 2013, Congress provided district courts with original jurisdiction over actions “falling under the Convention.” This jurisdictional grant parrots the grant of federal-question jurisdiction in 28 U.S.C. § 1331. Thus, both § 203 and § 1331 confer subject matter jurisdiction over enforcement actions brought under the convention.

Buttar argues that because subject matter jurisdiction is conferred by § 203 for actions “falling under the convention,” parties invoking this jurisdiction must satisfy the convention’s requirements, including the written-and-signed agreement requirements. And he has some support for this argument. But after considering the issue under well-established principles, the court concludes that analysis blurs the distinction between jurisdictional and merits requirements.

As noted, the convention does indeed impose specific requirements for an agreement to be enforceable under its provisions and for the enforcement of arbitration awards issued on the agreement. But these requirements relate to the “merits” of establishing an award’s enforceability under the convention. They do not specify what entity within a contracting state should be the competent authority for evaluating the merits, nor do they delineate that authority’s jurisdiction. Rather, those issues are left to the contracting states. And in the United States, § 203 provides those rules.

A plaintiff’s failure to establish the convention-specified requirements of an enforceable arbitration agreement or award will raise the merits question of whether the plaintiff’s claim is valid. But that validity is something to be litigated and determined. It does not go to the power of the court to make the determination — its subject matter jurisdiction. For these reasons, the court opts to join the Second and Ninth Circuits, which have reached the same conclusion.

Personal jurisdiction

Buttar acknowledges that he was a citizen and resident of North Carolina up until June or July 2016, but he asserts that at that time, he “moved” from North Carolina to New Zealand and thus no longer had contacts with North Carolina sufficient to subject him to the personal jurisdiction of a court in the state when this action was commenced in April 2018.

After the parties conducted discovery with respect to Buttar’s contacts with North Carolina during the relevant period and provided the court with fulsome briefs, the court conducted a hearing, after which it made findings of fact and concluded that Buttar had not overcome the presumption of his North Carolina domicile and that he therefore remained subject to the general jurisdiction of the court at the time Reddy commenced this action. In these circumstances, the court does not find clear error in the district court’s finding that Buttar was a North Carolina domiciliary when this action was commenced.

Merits

Buttar asserts that the agreement that Reddy produced to both the Singapore arbitrator and the district court was not authentic. The arbitrator, however, rejected this argument based on contemporaneous emails between Reddy and Buttar and the agreement itself.

Although those factual findings should at least be given deference, Buttar pressed the same arguments before the district court and continues to do so before in this court. Yet, he has adduced no evidence besides his own conclusory deposition testimony to support his contention that Reddy supplied either the wrong document or a forged version of the agreement.

But in establishing such a genuine dispute, the party opposing the motion must rely on more than “conclusory allegations.” Buttar’s unsupported claims of forgery and the existence of an alternative agreement do not clear that threshold. Moreover, Buttar never addresses the undisputed communications he had with Reddy after the June 21, 2010, agreement that confirm, as the arbitrator found, that the agreement is authentic and was signed by both parties. Nor does he explain why he received monies under the agreement and sought, by virtue of the agreement, to receive the remainder of the purchase price.

Affirmed.

Reddy v. Buttar, Case No. 20-1633, June 24, 2022. 4th Cir. (Niemeyer), from WDNC at Charlotte (Whitney). George William Thomas for Appellant. Joel M. Bondurant Jr. for Appellee. VLW 022-2-151. 17 pp.

VLW 022-2-151

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