UNITED STATES DISTRICT COURT 

EASTERN DISTRICT OF PENNSYLVANIA 

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In the Matter of the Arbitration Between 

IFC INTERCONSULT, AG, 

 Petitioner, 

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SAFEGUARD INTERNATIONAL 

PARTNERS, LLC, 

 Respondent. 

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Misc. Action, File No. 04MC107 

 

PETITIONER’S MEMORANDUM OF LAW IN OPPOSITION TO THE MOTION 

TO STRIKE JUDGMENT OR FOR STAY OF ENFORCEMENT PENDING APPEAL

Petitioner IFC Interconsult, AG (“IFC” or “Petitioner”) submits this 

Memorandum of Law and the accompanying affidavit of James D. Zirin, Esq., sworn to October 

1, 2004, (“Zirin Aff.”) in opposition to the Motion to Strike Judgment for Lack of Subject Matter 

Jurisdiction Pursuant to Fed. R. Civ. P. 60(b), or in the Alternative, Motion to Stay Pending 

Appeal Pursuant to U.S.C. [sic] § 12 (the “Motion to Strike”), filed by Respondent Safeguard 

International Partners, LLC (“Safeguard” or “Respondent”) on September 17, 2004. 

PRELIMINARY STATEMENT

Following the entry of a final judgement in this case, Safeguard brings this 

Motion to Strike based on two legal theories – one that seeks relief for Safeguard’s own failure 

to adhere to the procedure set forth by the Federal Arbitration Act (“FAA”) and another that 

Safeguard raises now for the first time. Neither argument has any merit, and the Motion to 

Strike should be denied. 

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First, Safeguard argues that the Court denied Safeguard its “procedural rights” by 

addressing the merits of IFC’s Petition to Confirm the Arbitration Award (the “Petition”), when 

Safeguard submitted a Rule 12(b)(6) Motion to Dismiss the Petition (the “Motion to Dismiss”) 

but did not answer the Petition. As IFC demonstrated in its Reply Memorandum of Law in 

Further Support of the Petition (“Reply Mem.”), however, a petition to confirm an arbitration 

award, filed pursuant to the FAA is not a pleading subject to the requirements of Rule 12(b). As 

such, Rule 12(b) does not apply to such petitions. Safeguard had ample opportunity to respond 

to the merits of the Petition, but chose instead to move to dismiss. Safeguard did so at its own 

peril, and now must live with the consequences of its procedural misstep. In addition, Safeguard 

seeks a stay of enforcement of the judgment pending appeal if the Court denies its Motion to 

Strike, but Safeguard has failed to make the requisite showing for a stay of enforcement, and the 

request for a stay should therefore be denied. 

Second, Safeguard argues for the first time that the Court lacks jurisdiction over 

the subject matter of the Petition. In the two-year history of this dispute, Safeguard had invoked 

the jurisdiction of this Court based on diversity of citizenship, admitted that there was diversity 

between the parties at least twice, and never once (until the present motion) disputed IFC’s 

repeated assertions of diversity jurisdiction. As a result, in its September 5, 2004 Memorandum 

opinion (“Sept. 5th Mem.”) at 3, the Court found that it had “jurisdiction pursuant to 28 U.S.C. § 

1332.” In any event, Safeguard has failed to provide sufficient evidence on the Motion to Strike 

to support its contention that diversity judgment was lacking. 

For the reasons discussed below and in the accompanying Zirin Affidavit, the 

Motion to Strike should be denied. 

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ARGUMENT

I. THIS COURT SHOULD NOT STAY ENFORCEMENT OF THE JUDGMENT 

BECAUSE SAFEGUARD HAD A FULL OPPORTUNITY TO RESPOND TO 

THE PETITION ON THE MERITS 

Safeguard complains that it was “deprived its procedural rights” because it “had 

no opportunity to answer the petition.” (Motion to Strike at 9.) On the contrary, Safeguard had 

ample opportunity to oppose the Petition on the merits. Indeed, Safeguard even received 

additional time to submit its opposition. But Safeguard responded by filing a motion to dismiss 

the Petition, rather than answering the Petition. The Court nonetheless considered the arguments 

and objections to the arbitration award that Safeguard raised in the Motion to Dismiss, but denied 

the motion and confirmed the award. In any event, a stay is not warranted here because 

Safeguard has failed to satisfy the requirements for a stay. 

A. The Court Properly Reached The Merits Of The Petition.

First, as IFC demonstrated in its Reply Memorandum of Law in Further Support 

of the Petition, a petition to confirm an arbitration award is not subject to Rule 12(b), and a party 

properly cannot move to dismiss a petition to confirm. See Reply Mem. at 2 n.2 (citing 

Productos Mercantiles E Industriales, S.A. v. Faberge USA, Inc., 23 F.3d 41, 46 (2d Cir. 1994)). 

In Productos Mercantiles, the Second Circuit affirmed the district court’s denial of a Rule 

12(b)(6) motion to dismiss a petition to confirm an arbitration award. As the Second Circuit 

explained, because “[t]he court properly treated [plaintiff’s] petition as a motion in accordance 

with the express provision of the FAA[,] . . . the court was not required to comply with the 

pleading requirements of Fed. R. Civ. P. 12(b).” Id. at 46. Although, in this case, Safeguard had 

every opportunity to oppose the Petition on the merits, Safeguard instead proceeded improperly 

by filing a motion under Rule 12(b), which does not apply to the Petition. By doing so, 

Safeguard misused its opportunity to oppose the Petition. 

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Second, the Court properly granted the Petition to Confirm, even in the absence of 

an Answer by Safeguard. Safeguard complains that it “had no opportunity to answer the petition 

following the denial of its motion to dismiss,” (Motion to Strike at 9), but in fact, Safeguard did

set forth its objections to the arbitration award and the reasons for its opposition to the Petition, 

(Motion to Dismiss at 5-8). The Court considered Safeguard’s arguments, see Sept. 5th Mem. at 

4 (“Safeguard claims that the Award is invalid because of Carter’s and CFC’s involvement in the 

arbitration”), but rejected them and confirmed the Petition, see id. at 7 (“[t]he court . . . finds that 

the arbitration was conducted within the rules established by the AAA and with no apparent 

objection by either party during the proceedings”). 

Despite the Court’s consideration of Respondent’s arguments, Safeguard now 

asserts that the Court improperly reached the merits of the Petition in the absence of an answer 

by Safeguard. In similar situations, courts that have considered this very argument have rejected 

it and nonetheless approved such action. As in this case, the court in Productos Mercantiles

faced a petition to confirm an arbitration award and a motion to dismiss that petition pursuant to 

Rule 12(b)(6). The district court addressed the merits of – and ultimately granted – the petition 

to confirm, even though defendants submitted only a motion to dismiss and no answer on the 

merits. Id. at 43. In response to defendants-appellants’ argument that “the court erred in 

reaching the merits of [the] petition,” the Second Circuit held that “the court properly decided the 

merits based solely on the papers submitted by the parties in support of their motions.” Id. at 46 

(citing Legion Ins. Co. v. Insurance Gen. Agency, Inc., 822 F.2d 541, 541-43 (5th Cir. 1987)). 

Safeguard had ample opportunity to respond to the Petition on the merits. It was 

never once “deprived” of its rights to submit an answer; on the contrary, the Court gave 

Safeguard additional time to respond to the allegations in the Petition and in fact considered – 

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and rejected – Safeguard’s arguments in opposition to the Petition raised in the Motion to 

Dismiss. Safeguard should not be permitted now to disturb the final judgment issued by this 

Court simply because it is dissatisfied with the result. 

B. A Stay Is Not Warranted In This Case.

Safeguard moves for a stay of “enforcement of the judgment pending appeal,” 

(Motion to Strike at 6), which is governed by Fed. R. Civ. P. Rule 62(b). But, curiously, 

Safeguard purports to move for the stay pursuant to the FAA, 9 U.S.C. § 12, which provides that 

when presented with a motion to modify or vacate an arbitration award, a judge may stay 

proceedings of the adverse party seeking to enforce the same award. Whether Safeguard seeks a 

stay under the FAA or Rule 62(b), a stay is not appropriate in this case. 

Safeguard is not entitled to a stay pursuant to 9 U.S.C. § 12 because, as the statute 

expressly provides, such a stay is only permissible where a party files a “[n]otice of a motion to 

vacate, modify, or correct an award” and the order of a stay is served with the notice of motion. 

As discussed above, Safeguard chose to file a petition to vacate in state court, rather than directly 

moving in this Court to modify or vacate the award. Safeguard should not be permitted to 

disturb the finality of the judgment merely to avoid the consequences of Safeguard’s own 

procedural imprudence. 

Safeguard’s request for a stay pending appeal pursuant to Rule 62(b) likewise 

should be denied. The standard for a stay of enforcement pending an appeal is clear. In 

determining whether a defendant is entitled to a stay, the Court must consider: “(1) whether the 

Defendants have made a strong showing that they are likely to succeed on the merits; (2) whether 

Defendants will be irreparably harmed absent a stay; (3) whether issuance of the stay will 

substantially injure the Plaintiff; . . . (4) what the public interest urges . . . [and] (5) [whether 

there is] proper security for the rights of the adverse party such as the posting of a supersedeas 

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bond or other arrangements.” I.F.S. of New Jersey, Inc. v. Mathesz, No. Civ. A. 97-CV-7517, 

1998 WL 966029 at *2 (E.D.Pa. Nov. 18, 1998), aff’d, 193 F.3d 514 (3d Cir. 1999). Safeguard 

does not even purport to satisfy these criteria, and in any event would be unable to demonstrate 

that it is entitled to a stay under this standard. In addition, Safeguard has not offered to post a 

bond pending appeal, as provided in Fed. R. Civ. P. 62(d), in order to protect IFC’s ability to 

ultimately enforce the judgment. Accordingly, Safeguard’s request for a stay pending appeal 

should be denied. 

II. SAFEGUARD HAS FAILED TO MAKE AN ADEQUATE SHOWING THAT 

THE COURT LACKS SUBJECT MATTER JURISDICTION 

A Rule 60 motion to grant relief from a final judgment is left to the Court’s sound 

discretion. See Patterson v. F.B.I., 893 F.2d 595, 605 (3d Cir.), cert. denied, 498 U.S. 812 

(1990). Moreover, where, as here, the “district court has proceeded to final judgment, 

‘considerations of finality, efficiency, and economy become overwhelming,’ . . . and federal 

courts must salvage jurisdiction where possible.” United Republic Ins. Co. v. Chase Manhattan 

Bank, 315 F.3d 168, 170 (2d Cir. 2003) (citation omitted). Safeguard has failed to provide the 

Court with a sufficient basis for exercising its discretion to grant the Motion to Strike and disturb 

the finality of the judgment. 

IFC alleged in the Petition – and Safeguard did not dispute – that diversity 

jurisdiction exists in this case because Safeguard is a United States limited liability corporation 

with its principal place of business in Wayne, Pennsylvania, while IFC is organized under the 

laws of Switzerland and has its principal place of business in Steinem, Switzerland. See Petition 

at ¶¶ 1-2. Safeguard never once – until its Motion to Strike – disputed this assertion of 

jurisdiction. In fact, as recently as its Motion to Dismiss (filed July 23, 2004), Safeguard 

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conceded that this Court has subject matter jurisdiction over the Petition.1 See Motion to 

Dismiss at 10 n.5 (“SIP . . . does not contest this Court’s subject matter jurisdiction”). As a 

result, the Court found that it had jurisdiction pursuant to 28 U.S.C. § 1332. See Sept. 5th Mem. 

at 3. Safeguard conceded jurisdiction and never disputed IFC’s characterization of Safeguard’s 

citizenship or the basis for jurisdiction. Moreover, this Court found that diversity jurisdiction 

exists, and almost four months have elapsed since IFC first filed this action. Accordingly, even 

assuming, arguendo, that it is correct, Safeguard will have been successful in only one respect – 

it will have wasted everyone’s time and effort. 

Moreover, Safeguard has failed to submit sufficient evidence to support its 

assertion that the Court lacks jurisdiction. In its Motion to Strike, Safeguard contends – in a 

legal brief without an affidavit or sworn testimony – that its “principal,” Heinz C. 

Schimmelbusch, “is an alien” (Motion to Strike at 1), that Schimmelbusch “is an Austrian 

citizen” (id. at 5), and that “Dr. Schimmelbusch is not admitted to the United States as a 

permanent resident” (id.).2 Safeguard’s attempt to allege jurisdictional facts in a brief without 

supporting affidavit, however, is insufficient absent an affidavit from Schimmelbusch or some 

other reliable documentary evidence relevant to the key jurisdictional issues, which are in 

Safeguard’s exclusive knowledge. See, e.g., Holman v. Carpenter Tech. Corp., 484 F. Supp. 

406, 409 (E.D. Pa. 1980) (support for a motion to dismiss for lack of diversity jurisdiction “may 

be derived from affidavits, depositions, and sworn documents . . . from which the Court can 

examine and evaluate all relevant factors and surrounding circumstances”). 

 

1

 Safeguard likewise acknowledged that its first suit against IFC (No. 02-07531), filed in this Court seeking a 

declaratory judgment, “was dismissed on October 1, 2002 for lack of diversity between [Safeguard] and the Fund, 

on the one hand, and CFC on the other. All three are organized in Delaware.” Motion to Dismiss at 2 (emphasis 

added). 

2

 The Third Circuit has held that a permanent resident alien is a citizen of the United States fore diversity purposes. 

See Singh v. Daimler-Benz AG, 9 F.3d 303, 305 (3d Cir. 1993). Safeguard does not address the citizenship of its 

principals other than Schimmelbusch, if there are any. Presumably, they are all Americans. 

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Indeed, as shown in the Zirin affidavit, submitted herewith, there is evidence that 

Schimmelbusch has many of the indicia of permanent residence. (See Zirin Aff. ¶ 9, n.1 and 

Exh. 4.) He has lived and worked in the United States for over a decade, has a social security 

number, and has even brought suit in the United States courts. (See id.) 

Safeguard has not submitted any sworn statement to support its allegation that the 

Court lacks jurisdiction due to Safeguard’s citizenship. Safeguard’s assertions, made in a brief 

by attorneys who likely lack first-hand knowledge of the facts alleged, should be rejected unless 

and until Safeguard, through its principals, comes forward with some sworn factual support. 

Under the circumstances, the Motion to Strike is deficient and should be denied. In the 

alternative, Safeguard should be ordered to set forth under oath sufficient information to 

determine Safeguard’s citizenship, including identification of its members and their citizenship, 

as of June 9, 2004, when the Petition was filed, and September 7, 2004 when judgment was 

entered, as well as Schimmelbusch’s citizenship, including whether he was a citizen of the 

United States, or a dual citizen of the United States and Austria, or a permanent resident of the 

United States, where he had lived for over a decade on the above two dates. 

Because Safeguard now argues that the Court lacks subject matter jurisdiction 

over the Petition, Safeguard must establish its claim by affidavit or other sworn testimony that, at 

the relevant times, the suit was between aliens. See Holman, 484 F. Supp. at 409. Absent an 

affidavit from Schimmelbusch, the Court has no basis on the factual record but to conclude that 

Safeguard is a U.S. citizen, and that diversity jurisdiction exists in this case. 

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CONCLUSION

For the foregoing reasons, Petitioner respectfully requests that this Court deny 

Safeguard’s Motion to Strike. 

Dated: Philadelphia, Pennsylvania 

 October 1, 2004 

 VAIRA & RILEY, P.C.

 ____________________________________ 

 Peter F. Vaira (PA 17042) (pfv262) 

 William J. Murray, Jr. (PA 73917) (wm409) 

 1600 Market Street, Suite 2650 

Of Counsel: Philadelphia, Pennsylvania 19103 

James D. Zirin (admitted pro hac vice) (215) 751-2700 

Benjamin R. Nagin (admitted pro hac vice) 

Catherine B. Winter (admitted pro hac vice) 

SIDLEY AUSTIN BROWN & WOOD LLP

787 Seventh Avenue 

New York, New York 10019 

(212) 839-5300 

 Attorneys for Petitioner IFC Interconsult, AG 

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CERTIFICATE OF SERVICE

I, William J. Murray, Jr. hereby certify that on October 1, 2004, a true and correct copy 

of Petitioner’s Memorandum of Law In Opposition to the Motion to Strike Judgment or For Stay 

of Enforcement Pending Appeal was served through the Electronic Case Files System upon the 

following: 

Paul R. Rosen, Esquire 

Bruce Bellingham, Esquire 

Spector Gadon & Rosen PC 

1635 Market Street, 7th Floor 

Philadelphia, PA 19103 

 ________________________________ 

 William J. Murray, Jr. 

 (wm409) 

NY1 5603032v4 

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