Opinion ID: 1435659
Heading Depth: 3
Heading Rank: 2

Heading: Sphere Drake and Arbitrability

Text: Storm argues that the panel manifestly disregarded Sphere Drake when it failed to arrange for a trial to be held on the arbitrability of the 2004 Agreement. Storm also argues that the district court erred in making its own determination, de novo, that the 2004 Agreement was executed by Storm. We conclude to the contrary that Storm failed to present some evidence of a dispute as to arbitrability so as to warrant a trial under Sphere Drake. [10] In particular, Storm has not provided sufficient evidence to support its allegation that Nilov lacked apparent authority to execute the agreement on behalf of Storm. Under New York law, [11] an agent has apparent authority if a principal places [the] agent in a position where it appears that the agent has certain powers which he may or may not possess. Masuda v. Kawasaki Dockyard Co., 328 F.2d 662, 665 (2d Cir.1964). The apparent authority question whether Storm was is susceptible to judgment as a matter of law against the principal. See, e.g., Warnock Cap. Corp. v. Hermitage Ins. Co., 21 A.D.3d 1091, 803 N.Y.S.2d 606 (2d Dep't 2005). Here, there is no genuine issue of fact, let alone a material one, as to Nilov's apparent authority: There is substantial evidence that Telenor received multiple notices from Storm that Nilov had the authority to execute the 2004 Agreement and there is no evidence, at least that has been brought to our attention, that Telenor should have thought otherwise. The record reflects that Storm sent Telenor a variety of signals that Nilov had the authority to execute the 2004 Agreement. Among them:  In 2002, Telenor received a copy of the August 20, 2002 Storm shareholders resolution, which referenced both the Voting Agreement and the draft shareholders agreement that ultimately became the 2004 Agreement and authorized Nilov to execute and deliver [those] agreements and to take or cause to be taken any and all other actions, as are required or desirable in connection with this Resolution and the abovereferenced agreements. Storm LLC, Notice Regarding Resolutions Adopted by Written Polling, Aug. 30, 2002, at 3.  Nilov executedwith actual authoritythe Voting Agreement providing that Storm agree[d] to ... execute and deliver the New Shareholder Agreement. Voting Agreement § 2.05.  Telenor received an email from a Storm negotiator stating that Storm was ready to sign the 2004 Agreement, and discussing Nilov's availability to sign it, the day before Nilov actually signed it.  Telenor received documentation from Storm signed by Storm's chairman and another official, stating that Nilov was duly authorized to execute the agreement on Storm's behalf. See Storm LLC, Certificate of Incumbency and Authority of Storm, Jan. 30, 2004. Storm does not challenge the validity of these representations to Telenor of Nilov's apparent authority to execute the agreement. Rather, Storm argues that Telenor should have deduced from the Storm charter and from having not received documentation of any shareholder meeting specifically authorizing Nilov to sign the 2004 Agreement, despite Storm's repeated statements that he was so authorized, that Nilov's execution required a shareholder meeting for authorization. This fails to raise a genuine issue of material fact. For one thing, Storm cites nothing in the record (including in the charter) to support the proposition that Nilov required shareholder approval to execute the 2004 Agreement on his company's behalf. For another, there is no evidence from which a rational juror might infer that Telenor should have concluded that there was no such meeting, in light of Storm's repeated assurances that Nilov was indeed duly authorized. Storm has, moreover, failed to explain why Nilov would sign the agreement without authorization. In any event, the record evidence shows that everyone at the relevant time, including Storm, thought that Nilov had the authority to execute the agreement. That is sufficient ground on which to conclude that Storm has failed to proffer sufficient evidence from which a rational juror could conclude that Nilov lacked apparent authority to execute the 2004 Agreement and that no trial was required to find out if the agreement was, or was not, arbitrable.