Court Opinion

ID: 3179881
Source: CourtListenerOpinion
Date Created: 2016-02-24 16:06:44.658851+00
Date Added: 2024-06-11T07:38:55.682193
License: Public Domain

15-2086
     ISMT, Limited v. Fremak Industries, Inc.

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                     SUMMARY ORDER
     RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
     ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE
     PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A
     DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
     ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST
     SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

 1            At a stated term of the United States Court of Appeals
 2       for the Second Circuit, held at the Thurgood Marshall United
 3       States Courthouse, 40 Foley Square, in the City of New York,
 4       on the 24th day of February, two thousand sixteen.
 5
 6       PRESENT:
 7                    DENNIS JACOBS,
 8                    DENNY CHIN,
 9                    CHRISTOPHER F. DRONEY,
10                                  Circuit Judges.
11
12       - - - - - - - - - - - - - - - - - - - -X
13       ISMT, LIMITED,
14                Petitioner-Appellee,
15
16                    -v.-                                               15-2086
17
18       FREMAK INDUSTRIES, INC.,
19                Respondent-Appellant.
20       - - - - - - - - - - - - - - - - - - - -X
21
22       FOR APPELLANT:                         Michael B. Kramer, Michael B.
23                                              Kramer & Associates, New York,
24                                              New York.
25
26       FOR APPELLEE:                          Lainie E. Cohen & Robert A.
27                                              Giacovas, Lazare Potter &
28                                              Giacovas LLP, New York, New
29                                              York.

                                                  1
 1        Appeal from a judgment of the United States District
 2   Court for the Southern District of New York (Hellerstein,
 3   J.).
 4
 5        UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
 6   AND DECREED that the judgment of the district court be
 7   AFFIRMED.
 8
 9        Fremak Industries, Inc. (“Fremak”) appeals from the
10   judgment of the United States District Court for the
11   Southern District of New York (Hellerstein, J.), confirming
12   an arbitral award in favor of ISMT, Limited (“ISMT”). We
13   assume the parties’ familiarity with the underlying facts,
14   the procedural history, and the issues presented for review.
15
16        “We review a district court’s decision to confirm an
17   arbitration award de novo to the extent it turns on legal
18   questions, and we review any findings of fact for clear
19   error.” Duferco Int’l Steel Trading v. T. Klaveness
20   Shipping A/S, 333 F.3d 383, 388 (2d Cir. 2003). “It is well
21   established that courts must grant an arbitration panel’s
22   decision great deference. A party petitioning a federal
23   court to vacate an arbitral award bears the heavy burden of
24   showing that the award falls within a vary narrow set of
25   circumstances delineated by statute and case law . . . . all
26   of which involve corruption, fraud, or some other
27   impropriety on the part of the arbitrators.” Id.
28   Additionally, “we permit vacatur of an arbitral award that
29   exhibits a ‘manifest disregard of law.’” Id. (quoting
30   Goldman v. Architectural Iron Co., 306 F.3d 1214, 1216 (2d
31   Cir. 2002)). “Our review under the doctrine of manifest
32   disregard is ‘severely limited.’ It is highly deferential
33   to the arbitral award and obtaining judicial relief for
34   arbitrators’ manifest disregard of the law is rare.” Id. at
35   389 (quoting Gov’t of India v. Cargill Inc., 867 F.2d 130,
36   133 (2d Cir. 1989)).
37
38        “First, we must consider whether the law that was
39   allegedly ignored was clear, and in fact explicitly
40   applicable to the matter before the arbitrators . . . .
41   Second, once it is determined that the law is clear and
42   plainly applicable, we must find that the law was in fact
43   improperly applied, leading to an erroneous outcome. We
44   will, of course, not vacate an arbitral award for an
45   erroneous application of the law if a proper application of
46   law would have yielded the same result. . . . Third, once

                                  2
 1   the first two inquiries are satisfied, we look to a
 2   subjective element, that is, the knowledge actually
 3   possessed by the arbitrators.” Id. at 389-90. The doctrine
 4   is circumscribed to those “exceedingly rare instances where
 5   some egregious impropriety on the part of the arbitrators is
 6   apparent.” Id. An “arbitration award should be enforced,
 7   despite a court’s disagreement with it on the merits, if
 8   there is a barely colorable justification for the outcome
 9   reached.” Banco de Seguros Estado v. Mut. Marine Office,
10   Inc., 344 F.3d 255, 260 (2d Cir. 2003) (quoting Landy
11   Michaels Realty Corp. v. Local 32B-32J, Serv. Emps. Int’l
12   Union, AFL-CIO, 954 F.2d 794, 797 (2d Cir. 1992)).
13
14        Fremak has fallen far short of sustaining its heavy
15   burden. The Tribunal did not manifestly disregard the law
16   in concluding, based on an analysis of the parties’ course
17   of dealing, that Fremak waived its right to timely
18   performance. Fremak contends that the Tribunal improperly
19   weighed the evidence in finding that title passed from ISMT
20   to Fremak on September 10, 2012; however, “the Second
21   Circuit does not recognize manifest disregard of the
22   evidence as proper ground for vacating an arbitrator’s
23   award.” Wallace v. Buttar, 378 F.3d 182, 193 (2d Cir. 2004)
24   (quoting Success Sys., Inc. v. Maddy Petroleum Equip., Inc.,
25   316 F. Supp. 2d 93, 94 (D. Conn. 2004)). Nor did the
26   Tribunal manifestly disregard the law in concluding that
27   Fremak failed to properly demand adequate assurances because
28   it failed to put such a demand into writing.1 No other
29   circumstance warrants disturbing the arbitral award.
30
31        For the foregoing reasons, and finding no merit in
32   Fremak’s other arguments, we hereby AFFIRM the judgment of
33   the district court.
34
35                              FOR THE COURT:
36                              CATHERINE O’HAGAN WOLFE, CLERK
37

         1
           As a result, it is unnecessary to reach Fremak’s
     argument that the Tribunal erred in finding that ISMT
     provided such assurances. In any event, Fremak concedes it
     did not raise this argument below. It “is a well-
     established general rule that an appellate court will not
     consider an issue raised for the first time on appeal.”
     Greene v. United States, 13 F.3d 577, 586 (2d Cir. 1994).
                                  3