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Oakley Fertilizer Inc., D/B/A Oakley International v. Hagrpota For Trading & Distribution

November 16, 2012


The opinion of the court was delivered by: Honorable Paul A. Crotty, United States District Judge:



Petitioner Oakley Fertilizer Inc. ("Oakley") brings this action under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 9 U.S.C. §§ 201-08, 21 U.S.T. 2517 (the "Convention"), and the Federal Arbitration Act, 9 U.S.C. §§ 1-16, and petitions for confirmation of an arbitration award against respondent Hagrpota for Trading and Distribution, Ltd. ("Hagrpota") awarded by a panel of the American Arbitration Association's International Centre for Dispute Resolution (the "Panel"). For the reasons set forth below, Oakley's petition is granted.


Between 2007 and 2009, Oakley and Hagrpota agreed to buy and sell fertilizer between themselves and to third-party buyers. Oakley claimed that it was owed approximately $16.9 million by Hagrpota as a result of these transactions and initiated arbitration proceedings with the American Arbitration Association in November 2009. Hagrpota filed suit seeking to stay the arbitration on the grounds that it had not agreed to arbitrate its dispute with Oakley. On June 18, 2010, Judge McMahon issued an order compelling arbitration, Hagrpota, 2010 WL 2594286, and subsequently denied Hagrpota's request for reconsideration. Hagrpota for Trading & Dist., Ltd. v. Oakley Fertilizer, Inc., No. 09 Civ. 9779 (S.D.N.Y. July 9, 2010). Dkt. No. 26. Following the arbitration, the Panel awarded Oakley $12,205,202.33 (the "Award"), which Hagrpota has yet to pay. Oakley now petitions the Court to confirm the Award and Hagrpota urges the Court not to do so.


Both parties agree that this case is governed by the Convention. See Bergesen v. Joseph Muller Corp., 710 F.2d 928, 932 (2d Cir. 1983) (arbitration awards "involving parties domiciled or having their principal place of business outside the enforcing jurisdiction" are subject to the Convention). "In a case governed by the Convention, the party opposing enforcement of an arbitral award has the burden to prove that one of the seven defenses under the New York Convention applies. The burden is a heavy one, as the showing required to avoid summary confirmance is high." Zeiler v. Deitsch, 500 F.3d 157, 164 (2d Cir. 2007) (internal quotations omitted). Hagrpota argues that Article V(1)(c) applies, which provides that a state may refuse to confirm an award if the respondent proves that "[t]he award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration."*fn2 Convention on Recognition and Enforcement of Foreign Arbitral Awards, art. V(1)(c), June 10, 198, 21 U.S.T. 2517. This defense is "construed narrowly." Parsons & Whittemore Overseas Co., Inc. v. Societe Generale De L'Industrie Du Papier (RAKTA), 508 F.2d 969, 976 (2d Cir. 1974). "Although the Convention recognizes that an award may not be enforced where predicated on a subject matter outside the arbitrator's jurisdiction, it does not sanction second-guessing the arbitrator's construction of the parties' agreement." Id. at 977.

I.Law of the Case Doctrine

a. Legal Standard

The law of the case doctrine "is implicated when a court reconsiders its own ruling on an issue in the absence of an intervening ruling on the issue by a higher court. It holds that when a court has ruled on an issue, that decision should generally be adhered to by that court in subsequent stages in the same case, unless cogent and compelling reasons militate otherwise."

U.S. v. Quintieri, 306 F.3d 1217, 1226 (2d Cir. 2002) (internal quotations omitted). "A district court may revisit such decisions but with the caveat that 'where litigants have once battled for the court's decision, they should neither be required, nor without good reason permitted, to battle for it again.'" Bergerson v. N.Y. State Office of Mental Health, 652 F.3d 277, 288 (2d Cir. 2011) (quoting Zdanok v. Glidden Co., 327 F.2d 944, 953 (2d Cir. 1964)). Cogent and compelling reasons to revisit an earlier decision are generally found only where there is "'an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent a manifest injustice.'" Official Comm. of Unsecured Creditors of Color Tile, Inc. v. Coopers & Lybrand LLP, 322 F.3d 147, 167 (2d Cir., 2003) (quoting Virgin Atl. Airways Ltd. V. Nat'l Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992)); see also Bergerson, 652 F.3d at 288 ("generally, there is a strong presumption against amendment of prior orders.").

b. Discussion

First, Hagrpota argues that this case is separate action from that in which Judge McMahon compelled arbitration, and therefore the law of the case doctrine is inapplicable. While it is true that "the doctrine is ordinarily applied in later stages of the same lawsuit, it also has application to different lawsuits between the same parties." In re PCH Assocs., 949 F.2d 585, 592 (2d Cir. 1991); see also N. River Ins. Co. v. Philadelphia Reinsurance Corp., 63 F.3d 160 (2d Cir. 1995) (applying doctrine where district court compelled arbitration, neither party appealed, subsequent to arbitration plaintiff moved to confirm its award, and defendants cross-moved to vacate order compelling arbitration); Antonioli v. Lehigh Coal & Navigation Co., 451 F.2d 1171, 1178 (3d Cir. 1971) (doctrine applies to subsequent lawsuit between same parties); Schupak v. Califano, 454 F. Supp. 105, 113-14 (E.D.N.Y. 1978) (applying doctrine where same issues had been litigated between same parties in another jurisdiction). Because Hagrpota is attempting to relitigate the very same issue previously adjudicated by Judge McMahon, against the same party and relating to the same arbitration, the Court finds that the law of the case doctrine is applicable.

Second, Hagrpota asserts that Judge McMahon's decision was clearly erroneous and therefore should not bind this Court. A decision is clearly erroneous where, "'although there is evidence to support it, the reviewing [body] on the entire evidence is left with the definite and firm conviction that a mistake has been committed.'" Concrete Pipe & Prods. of Cal., Inc. v. Constr. Laborers Pension ...

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