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Interoil LNG Holdings, Inc. v. Merrill Lynch PNG LNG Corp.

NEW YORK SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT


March 3, 2009

INTEROIL LNG HOLDINGS, INC., ET AL., PLAINTIFFS-APPELLANTS,
v.
MERRILL LYNCH PNG LNG CORP., DEFENDANT-RESPONDENT.

Order, Supreme Court, New York County (Charles E. Ramos, J.), entered November 12, 2008, which granted defendant's cross motion for a preliminary injunction in aid of arbitration, unanimously affirmed, with costs.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Mazzarelli, J.P., Gonzalez, Sweeny, McGuire, DeGrasse, JJ.

603006/08

In addition to showing that the arbitration award could be rendered ineffectual, a party seeking an injunction in aid of arbitration must demonstrate the traditional factors for injunctive relief under CPLR article 63 (CPLR 7502[c]) (see SG Cowen Securities Corp. v Messih, 224 F3d 79, 83-85 [2d Cir 2000] [construing CPLR 7502(c) and CPLR 7501 and concluding that in addition to a showing that the arbitration award could be rendered ineffectual the traditional requirements for injunctive relief apply to a request under CPLR 7502(c) for injunctive relief]). Plaintiff asserts that defendant failed to satisfy two of those elements - a likelihood of success on the merits, and irreparable injury.

Defendant has met this standard. As to the merits, defendant claims to have an enforceable agreement for a supply contract to purchase LNG from the parties' mutually owned company. While the price term in that agreement is not definite on its face, we find defendant has made a sufficient showing that the term can be supplied from public price indices and industry practice. Given the wording of the price provision and the parties' clear intent to enter into a supply/output contract, the contract is not too vague to be enforced (Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475, 483 [1989], cert denied 498 US 816 [1990]). Moreover, the loss of rights to purchase a commodity into the future (the term of the agreement is 20 years) would result in a loss which, at the least, would be difficult to quantify (Gunderman & Gunderman Insurance v Brassill, 46 AD3d 615, 617 [2007] [upholding finding of irreparable injury where claimed damages were "difficult to quantify"]). Accordingly, defendant made a sufficient showing of irreparable injury.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

20090303

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