Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_15-cv-02304/USCOURTS-cand-4_15-cv-02304-0/pdf.json

Nature of Suit Code: 896
Nature of Suit: Other Statutes - Arbitration
Cause of Action: 09:201 Petition for Enforcement of Foreign Arbitration Award

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ORDER; REPORT & RECOMMENDATION 15-cv-02304-LB

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

San Francisco Division

KVEN OJSC,

Plaintiff,

v.

THUNDERBOLT ENTERPRISES, LTD.,

Defendant.

Case No. 15-cv-02304-LB 

ORDER FOR REASSIGNMENT; 

REPORT AND RECOMMENDATION 

TO CONFIRM ARBITRAL AWARD BY 

DEFAULT JUDGMENT

[ECF No. 17]

INTRODUCTION

Petitioner KVEN OJSC, a Russian Federation company, moves to confirm an international 

arbitration award under the Federal Arbitration Act (9 U.S.C. §§ 1-307) (“FAA”) and, more 

specifically, under the Convention on the Recognition and Enforcement of Foreign Arbitral 

Awards, June 10, 1958, 21 U.S.T. 2517 (codified at 9 U.S.C. §§ 201-08) (hereinafter “New York 

Convention”). The award was issued in February 2012 in KVEN‟s favor against the respondent, 

Thunderbolt Enterprises, Ltd. (ECF No. 1-2 at 11-18 (arbitral decision) (English-language 

version).)1

KVEN served Thunderbolt with the petition that started this suit, a summons, and other docket 

 

1 Record citations are to material in the Electronic Case File (“ECF”); pinpoint citations are to the 

ECF-generated page numbers at the tops of documents.

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ORDER; REPORT & RECOMMENDATION 15-cv-02304-LB

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material. (ECF Nos. 12, 12-1, 18.) Thunderbolt has not opposed the petition or otherwise appeared 

in this action, and thus has not consented to the undersigned‟s jurisdiction. The clerk of court 

entered Thunderbolt‟s default on August 28, 2015. (ECF No. 16.) KVEN then moved for a final 

default judgment to confirm the arbitral award. (ECF Nos. 17 (motion), 18 (affidavit).) 

Thunderbolt has not opposed that motion.

The court held a hearing on December 10, 2015. The court now ORDERS that this case be 

reassigned to a district judge. Based on counsel‟s argument, KVEN‟s petition, and the supporting 

evidence, the court RECOMMENDS that the district court grant KVEN‟s motion for default 

judgment and confirm the arbitral award.

* * *

STATEMENT

1. Facts

KVEN and Thunderbolt entered into a contract for the sale of seafood. (See ECF No. 1-2 at 

12) (arbitration decision). According to KVEN, Thunderbolt failed to deliver the agreed goods, 

and did not refund an advance payment that KVEN had made under the contract. (See ECF No. 1 

at 4:5-7; ECF No. 1-1 at 2-3 (contract); ECF No. 1-2 at 12-13 (arbitral decision).) The parties‟ 

contract called for disputes under the agreement to be resolved under the Commercial Arbitration 

Rules of the International Commercial Arbitration Court of the Russian Chamber of Commerce 

and Industry (“ICAC”). (ECF No. 1 at 3.) That body conducted an arbitration in which KVEN 

participated but Thunderbolt did not. (E.g., ECF No. 1-2 at 11.) On February 2, 2012, ICAC issued 

its decision. (Id., passim). It determined that Thunderbolt owed KVEN USD $30,380 to refund 

KVEN‟s advance payment, and USD $4638 for the costs of the arbitration. (Id. at 15.) 

Thunderbolt has paid no part of the award.

* * *

2. Procedural history in this court

On May 21, 2015, KVEN filed a petition in this court to confirm the ICAC award. (ECF No. 

1.) Attached to the petition are certified copies of the parties‟ underlying contract (ECF No. 1-1 at 

2-10) and of ICAC‟s arbitral decision and award (ECF No. 1-2 at 2-18). On August 19, KVEN 

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confirmed that it had served Thunderbolt with the petition, summons, and other docket material. 

(ECF Nos. 12, 12-1 (process server‟s affidavit); ECF No. 18.) Thunderbolt has not answered the 

petition or otherwise appeared in this suit. On August 28, following KVEN‟s supported motion 

(ECF Nos. 13-15), the clerk of court entered Thunderbolt‟s default (ECF No. 16). Then, on 

October 27, KVEN moved for a final default judgment confirming the ICAC award. (ECF Nos. 

17-18.) KVEN served its motion on Thunderbolt. (ECF No. 17 at 3-4.) Thunderbolt has not 

opposed that motion.

The court held a hearing on KVEN‟s motion on December 10, 2015. (See ECF No. 23 (minute 

entry).) KVEN appeared; Thunderbolt did not. KVEN told the court that it had not any response 

from Thunderbolt in connection with the petition, generally, or the default-judgment motion, 

specifically.

* * *

ANALYSIS

1. Jurisdiction and venue

This court has subject-matter jurisdiction under 9 U.S.C. § 203 and 28 U.S.C. § 1331. This is 

an action to confirm an international arbitral award under the New York Convention, which is a 

treaty and law of the United States (codified at 9 U.S.C. §§ 201-08), and thus presents a federal 

question (9 U.S.C. § 203).

This court is the proper venue for this case under 9 U.S.C. § 204. This is a “court in which 

save for the arbitration agreement an action or proceeding with respect to the controversy between 

the parties could be brought”: Thunderbolt is a California corporation with its principal place of 

business in Novato, California and so, “save for the arbitration agreement,” could be sued in this 

district. See 28 U.S.C. § 1391(b), (c); (ECF No. 1 at 2).

* * *

2. Confirming the arbitral award

The New York Convention — which, again, is codified as part of the FAA at 9 U.S.C. § 201-

08 — provides the following basic rule on confirming international arbitral awards:

Within three years after an arbitral award falling under the Convention is made, 

any party to the arbitration may apply to any court having jurisdiction under this 

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chapter for an order confirming the award as against any other party to the 

arbitration. The court shall confirm the award unless it finds one of the grounds for 

refusal or deferral of recognition or enforcement of the award specified in the said 

Convention.

9 U.S.C. § 207.

There is no question that KVEN applied to confirm the ICAC award within three years of its 

issuance. (See generally ECF Nos. 1 to 1-2.) The New York Convention provides the following 

grounds for refusing to recognize arbitral awards:

1) Recognition and enforcement of the award may be refused, at the request of the party 

against whom it is invoked, only if that party furnishes to the competent authority where 

the recognition and enforcement is sought, proof that:

a. The parties to the agreement referred to in article II were, under the law applicable 

to them, under some incapacity, or the said agreement is not valid under the law to 

which the parties have subjected it or, failing any indication thereon, under the law 

of the country where the award was made; or

b. The party against whom the award is invoked was not given proper notice of the 

appointment of the arbitrator or of the arbitration proceedings or was otherwise 

unable to present his case; or

c. The award deals with a difference not contemplated by or not falling within the 

terms of the submission to arbitration, or it contains decisions on matters beyond 

the scope of the submission to arbitration, provided that, if the decisions on matters 

submitted to arbitration can be separated from those not so submitted, that part of 

the award which contains decisions on matters submitted to arbitration may be 

recognized and enforced; or

d. The composition of the arbitral authority or the arbitral procedure was not in 

accordance with the agreement of the parties, or, failing such agreement, was not in 

accordance with the law of the country where the arbitration took place; or

e. The award has not yet become binding on the parties, or has been set aside or 

suspended by a competent authority of the country in which, or under the law of 

which, that award was made.

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2) Recognition and enforcement of an arbitral award may also be refused if the competent 

authority in the country where recognition and enforcement is sought finds that:

a. The subject matter of the difference is not capable of settlement by arbitration 

under the law of that country; or

b. The recognition or enforcement of the award would be contrary to the public policy 

of that country.

New York Convention, supra, art. V; Admart AG v. Stephen & Mary Birch Found., Inc., 457 F.3d 

302, 307-08 (3rd Cir. 2006).

“To carry out the policy favoring enforcement of foreign arbitral awards, courts have strictly 

applied [these] Article V defenses and generally view them narrowly.” Id. at 308. “The mandatory 

language of the Convention itself and of the FAA” indeed “leaves the district courts with „little 

discretion‟” in this area. See Glencore Grain Rotterdam B.V. v. Shivnath Rai Harnarain Co., 284 

F.3d 1114, 1120 (9th Cir. 2002) (discussing jurisdictional aspects of New York Convention) (citing 

Ministry of Def. of the Islamic Republic of Iran v. Gould, Inc., 969 F.2d 764, 770 (9th Cir. 1992)). 

The party resisting confirmation has the burden of establishing these defenses to enforcement. See, 

e.g., Empresa de Telecomunicaciones de Bogota, S.A. E.S.P. v. Mercury Telco Grp., Inc., 670 F. 

Supp. 2d 1357, 1361 (S.D. Fla. 2009).

Thunderbolt has offered no proof that enforcement of the ICAC award should be refused or 

delayed for any of these reasons. Nor has the court seen, in the material that it has before it, any 

enumerated ground for refusing to confirm that award. The court must therefore confirm the 

award. E.g., 9 U.S.C. § 207 (“The court shall confirm the award . . . .”).

* * *

3. Default judgment

Under Federal Rule of Civil Procedure 55(b)(2), a plaintiff may apply to the district court for 

— and the court may grant — a default judgment against a defendant who has failed to plead or 

otherwise defend an action. See Draper v. Coombs, 792 F.2d 915, 925 (9th Cir. 1986). The factors 

set out in Eitel v. McCool, 782 F.2d 1470 (9th Cir. 1986), favor granting KVEN‟s motion for 

default judgment. Given the deferential FAA standard (which impacts “the merits of [the 

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petitioner‟s] substantive claim”), the amount at stake, the unlikelihood “of a dispute concerning 

material facts,” and the lack of circumstances showing that “the default was due to excusable 

neglect,” the undersigned concludes that the court should enter the requested default judgment. 

See id. at 1471-72.

* * *

CONCLUSION

Because Thunderbolt has not appeared in this suit, and thus has not consented to magistratejudge jurisdiction under 28 U.S.C. § 636(c), the court ORDERS this matter reassigned to a district 

judge. The undersigned RECOMMENDS that Petitioner KVEN‟s motion to confirm the 

arbitration award and for final default judgment be granted. The court further RECOMMENDS

that the district court AWARD KVEN the following relief: 1) $35,018 as the principal sum of the 

confirmed ICAC award; 2) post-judgment interest under 28 U.S.C. § 1961 until the judgment is 

satisfied; and 3) the further costs of collection.

Any party may serve and file specific written objections to this recommendation within 14 

days after being served with a copy. See 28 U.S.C. § 636(b)(1)(C); Fed. R. Civ. P. 72(b)(2); Civil 

L.R. 72-3. Failure to file written objections within the specified time may waive the right to appeal 

the District Court‟s order.

KVEN must serve this Report and Recommendation on Thunderbolt.

IT IS SO ORDERED AND RECOMMENDED.

Dated: December 10, 2015

______________________________________

LAUREL BEELER

United States Magistrate Judge

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