Opinion ID: 8414534
Heading Depth: 2
Heading Rank: 8

Heading: The Confirmation Action

Text: In response to the district court’s initial ruling that Orion required ■ appellants to confirm their award prior to seeking its enforcement, appellants initiated an action on April 29, 2014 to confirm the arbitral award in the same district court (the “Confirmation Action”). As a legal entity, however, SBT was effectively a nullity after it was deleted from the Swiss Commercial Register. See Peter Forstmoser et al., Swiss Company Law § 56, N 153 (1996) (“A practical effect is, however, had by the striking of the corporation from the register, as this means the corporation is no longer able to act externally: it is no longer able to ... be sued or have debt collection proceedings filed against it.” (italics in original)). As a result, the district court held that, under Rule 17(b) of the Federal Rules of Civil Procedure, SBT lacked capacity to be sued because it was no longer a corporate entity according to Swiss law. CBF Indústria de Gusa S/A v. Steel Base Trade AG, No. 14 Civ. 3034, 2015 WL 1191269, at  (S.D.N.Y. Mar. 16, 2015) (hereinafter “Confirmation Decision”). The district court also held that appel-lees were not judicially estopped from asserting SBT’s lack of capacity as a defense. Appellants had argued that “[appellees] asserted repeatedly . that Switzerland and France provided adequate forums for [appellants’] claims [against SBT] and, indeed, were the proper forums for this actionf,]” thereby estopping appellees from arguing SBT lacked capacity to be sued in any fora. Confirmation Decision, 2015 WL 1191269, at  (internal quotation marks omitted). The district court noted that, under Second Circuit precedent, a party may be judicially estopped from asserting a position if “(1) the party took an inconsistent position in a prior proceeding and (2) that position was adopted by the first tribunal in some manner, such as by rendering a favorable judgment.” Id. (quoting Holtz v. Rockefeller & Co., 258 F.3d 62, 80 (2d Cir. 2001) and citing Mitchell v. Washingtonville Cent. Sch. Dist., 190 F.3d 1, 6-8 (2d Cir. 1999)). The district court noted that “[t]he purposes of the doctrine are to preserve the sanctity of the oath and to protect judicial integrity by avoiding the risk of inconsistent results in two proceedings.” Id. (quoting Mitchell, 190 F.3d at 6). But the district court held that, because the Enforcement Action was not dismissed on the grounds of forum non conveniens, the second prong of Holtz did not apply and appellees were therefore not judicially estopped from making the argument that SBT presently lacked capacity to be sued. Id. at .