Court Opinion

ID: 148709
Source: CourtListenerOpinion
Date Created: 2010-06-16 19:13:26+00
Date Added: 2024-06-11T17:24:07.630492
License: Public Domain

UNPUBLISHED

                    UNITED STATES COURT OF APPEALS
                        FOR THE FOURTH CIRCUIT

                             No. 09-1171

RZS HOLDINGS AVV,

                Plaintiff - Appellant,

           v.

PDVSA PETROLEO S.A.; ALI RODRIGUEZ ARAQUE; RODOLFO PORRO;
JOSE   ROJAS;  IVAN   HERNANDEZ; FELIX RODRIGUEZ;  NELSON
MARTINEZ; DESTER RODRIGUEZ; LUIS VIERMA; RAFAEL ROSALES;
NELSON NUNEZ; VICTOR ALVAREZ,

                Defendants - Appellees.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:04-cv-00784-GBL-TRJ)

Argued:   May 12, 2010                     Decided:   June 16, 2010

Before TRAXLER, Chief Judge, MOTZ, Circuit Judge, and Arthur L.
ALARCÓN, Senior Circuit Judge of the United States Court of
Appeals for the Ninth Circuit, sitting by designation.

Affirmed by unpublished per curiam opinion.

ARGUED: Henry St. John FitzGerald, Arlington, Virginia, for
Appellant.    Christopher O. Davis, BAKER, DONELSON, BEARMAN,
CALDWELL & BERKOWITZ, PC, New Orleans, Louisiana, for Appellees.
ON BRIEF: Matthew A. Woolf, BAKER, DONELSON, BEARMAN, CALDWELL &
BERKOWITZ, PC, New Orleans, Louisiana; Joseph F. Giordano,
SEMMES, BOWEN & SEMMES, Vienna, Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:

       RZS Holdings AVV (“RZS”) appeals the order of the district

court granting the motion of PDVSA Petroleo S.A. (“PDVSA”) to

confirm the arbitral award rendered in favor of PDVSA by the ICC

International Court of Arbitration (“ICC”).                We affirm.

                                          I.

       RZS and PDVSA entered into a contract for RZS to deliver

petroleum to PDVSA in Venezuela.                PDVSA ultimately did not take

delivery of the petroleum.              After negotiations broke down, RZS

sued   PDVSA      in   Virginia    state       court,    alleging   a    breach   of

contract.      PDVSA removed the case to federal court, and then

submitted it to arbitration as provided by the terms of the

contract.      A three-member panel of the ICC found that PDVSA had

breached    the    contract,      but    awarded   RZS    no   damages    for   that

breach.     PDVSA then moved the district court to confirm the

award, and thus make it a binding judgment in United States

courts.

       During the hearing on that motion, RZS’s attorney withdrew

from   representation.         The      district   court    then    confirmed     the

award without allowing RZS a continuance to find replacement

counsel.     RZS appealed, and we reversed and remanded, holding

that the district court had denied RZS due process.                        See RZS

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Holdings AVV v. PDVSA Petroleo S.A., 506 F.3d 350 (4th Cir.

2007).

                                             II.

      On    remand,    now    with      new       counsel,     RZS    again    challenged

confirmation     of     the     arbitration           award,      alleging      that     the

arbitration tribunal had exhibited bias in favor of PDVSA, that

the   tribunal    had     failed        to        consider     the    evidence      in    an

evenhanded     manner,       and      that     the    arbitral        proceedings        were

defective because PDVSA had paid the tribunal’s entire fee when

RZS   was   incapable    of     paying        its    share.       The    district      court

granted RZS limited discovery, and RZS deposed the arbitrators

and attempted to gather evidence to support its allegations.

When this discovery produced no evidence to corroborate RZS’s

claims, RZS requested additional discovery and a hearing, which

the district court denied.

      After considering the evidence, the district court again

granted PDVSA’s motion to confirm the award.                         The district court

initially      held      that         the      Inter-American           Convention        on

International          Commercial              Arbitration              (“Inter-American

Convention”)     governed       and    supplied       the     exclusive       grounds    for

refusing to enforce the arbitral award, and that RZS’s arguments

did   not    address     criteria           specified        by   the    Inter-American

Convention.      Alternatively, the district court assumed that, as

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RZS had argued, the Federal Arbitration Act (“FAA”) governed

RZS’s claims, and held that RZS had failed to establish that the

tribunal had done anything improper that would justify a refusal

to confirm the award under the FAA.

       RZS noted this appeal.

                                        III.

       We have carefully considered the record, the briefs, and

the oral arguments, and we affirm on the basis of the district

court’s well-reasoned opinion.               See RZS Holdings AVV v. PDVSA

Petoleos S.A., 598 F. Supp. 2d 762 (E.D. Va. 2009).                     Given that

opinion,      we   need    only    briefly   address    RZS’s    contentions     on

appeal.

       RZS    primarily     argues    that   the    district    court    erred   in

holding that the Inter-American Convention, and not the FAA,

governs review of the award in this case.                     RZS argues further

that    the    court      should   refuse      to   confirm    the   award   under

§ 10(a)(2)-(3) of the FAA, which states that a court may vacate

an arbitral award:

       (2) where there was evident partiality or corruption
       in the arbitrators, or either of them; [or]

       (3) where the arbitrators were guilty of misconduct in
       refusing to postpone the hearing, upon sufficient
       cause shown, or in refusing to hear evidence pertinent
       and material to the controversy; or of any other
       misbehavior by which the rights of any party have been
       prejudiced . . . .

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9 U.S.C. § 10 (2006).              All of RZS’s allegations of partiality,

corruption, and misconduct are baseless.                            Thus, even assuming

that the FAA applies, we hold that RZS has failed to demonstrate

that the district court should have refused to confirm the ICC’s

award.

      RZS next contends that to enforce the award would violate

its due process rights.             This claim is merely an amalgamation of

RZS’s    other    allegations           of   impropriety       --    all       of   which      the

district    court      properly         found       meritless.           The    whole     is   no

greater    than    the     sum     of    its    parts.      Additionally,                RZS   has

presented literally no authority (nor have we discovered any) in

support    of    its     argument       that    enforcement         of    the     ICC’s    award

would violate RZS’s rights to due process.

      Finally, RZS’s argument that the district court erred by

refusing to order additional discovery or an evidentiary hearing

on the issue of arbitrator bias also fails.                          “This Court affords

a district court substantial discretion in managing discovery

and   reviews      the    denial        or   granting     of     a       motion     to    compel

discovery    for    abuse     of    discretion.”           Lone      Star       Steakhouse      &

Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 929 (4th Cir.

1995).     We find no such abuse here.                  The district court allowed

RZS to depose the arbitrators on the subject of bias, and these

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depositions revealed only that RZS’s allegations lacked factual

basis.

                              IV.

    The judgment of the district court is

                                                      AFFIRMED.

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