Foreign arbitral award confirmed

Where an arbitrator previously found that a Virginia-based company breached a delivery contract, the award was not invalid, the Virginia-based company had ample notice of and benefitted from multiple extensions to participate in the arbitral proceeding, the arbitration was focused only on the disputed contract, the parties were bound by the arbitral award and there was no indication that the award has been set aside, it was confirmed by the court.

Background

Hiperbaric SA petitioned the court to confirm an arbitral award resulting from the breach of a contract regarding the delivery of equipment and concurrently moved for summary judgment. OCVA Holdings LLC’s responsive pleadings were due on Aug. 4, 2022. After OCVA failed to file responsive pleadings, the clerk entered default on Aug. 26, 2022. Now before the court is Hiperbaric’s motion for default judgment.

Preliminary issues

For a court to render default judgment, (1) it must have subject-matter jurisdiction and personal jurisdiction over the defaulting party; (2) venue must be proper (3) and the court must be satisfied that the plaintiff properly served the defaulting party.

First, Hiperbaric’s petition for the court to confirm a nondomestic arbitral award is governed by the New York Convention, and the court therefore has subject matter jurisdiction. Next, to have personal jurisdiction over a defendant, the standards of both federal due process and the forum state’s long-arm statute must be satisfied.

The well-pleaded facts establish that OCVA is a Virginia limited liability company located in Topping, Middlesex County, Virginia, and is thereby subject to general jurisdiction in this court. Second, venue is proper as OCVA resides in Middlesex County, Virginia. Venue is also proper under because, pursuant to the contract that gave rise to this claim, Hiperbaric delivered the equipment to OCVA at its location in Middlesex County, Virginia.

Finally, Hiperbaric properly served OCVA. A private process server personally served the summons, proposed order and affiliated exhibits on the registered agent for OCVA.

Merits

This court “shall confirm” an arbitral award falling under the New York Convention “unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.” But, notably, the court may refuse enforcement “only if [the] party furnishes … proof.” Given OCVA’s default status in this case, it has not put forth any arguments against confirmation of the arbitral award. In addition, after reviewing the record, the court finds that none of the above grounds for refusing to confirm Hiperbaric’s arbitral award exist here.

First, nothing in the record indicates that either party was “under some incapacity” or that the award was invalid under the laws of Spain. The record indicates that OCVA’s founder, William Tolar Nolley Jr., intermittently communicated with Hiperbaric and the arbitrator. Although he claimed to have “several scheduled medical operations,” he never “provide[d] a schedule for his surgeries and time to convalesce” when given the opportunity to do so.

Second, the record indicates that OCVA had ample notice of and benefitted from multiple extensions to participate in the arbitral proceeding. Third, the record indicates that the arbitration award addresses only the disputed contract that Hiperbaric submitted to arbitration. Fourth, the arbitral procedure comported with the parties’ contract and Spanish law. Fifth, the parties are bound by the arbitral award, and there is no indication that the award has been set aside. Accordingly, the court finds no meritorious grounds for denying Hiperbaric’s petition.

Plaintiff’s motion for default judgment granted.

Hiperbaric SA v. OCVA Holdings LLC, Case No. 3:22-cv-464, Nov. 3, 2022. EDVA at Richmond (Gibney). VLW 022-3-495. 11 pp.