The opinion of the court was delivered by: Denise Cote, District Judge:
Before the Court is Cukurova's April 26, 2013, motion for dissolution of a preliminary injunction, or stay of the preliminary injunction pending appeal, which became fully submitted on May 6. For the reasons stated below, Cukurova's request that the preliminary injunction be dissolved is denied, while its request that the injunction be stayed pending appeal is granted, provided Cukurova posts a bond in the full amount of the judgment.
The factual background of this case is laid out in the Court's September 10, 2012 Opinion, Sonera Holding B.V. v. Cukurova Holding A.S., 895 F. Supp. 2d 513 (S.D.N.Y 2012), and will not be repeated beyond what is necessary to provide context for the current motions. In 2005, pursuant to a letter agreement, the parties began arbitration in Switzerland. On September 1, 2011, the Swiss arbitration tribunal entered a Final Award, ordering Cukurova to pay $932 million in damages due to its failure to deliver to Sonera certain shares in Turkcell, the largest mobile telephone service in Turkey. Sonera then began its efforts to have the Final Award enforced, which continue to this day.
On December 6, 2011, Sonera filed this action, seeking confirmation of the Final Award in the Southern District of New York. On September 10, 2012, after full briefing on Sonera's petition for confirmation of the arbitral award, the Court issued an Opinion and Order holding that personal jurisdiction existed over Cukurova and confirming the arbitral award. Id. A final judgment was entered on September 21, and Cukurova appealed, arguing that the Court lacked personal jurisdiction. Cukurova nevertheless refused to post a bond pending appeal, and so its request for a stay of post-judgment proceedings was denied.
Post-judgment discovery began, the goal of which was enforcement of the final judgment. Cukurova steadfastly refused to participate in discovery, insisting that the Court lacked personal jurisdiction and that its Opinion and Order would be reversed on appeal, while refusing to post a bond such that enforcement proceedings could be stayed pending appeal. On March 11, 2013, after repeated failures to comply with court-ordered discovery, the Court held Cukurova in contempt, and imposed rapidly escalating fines. Cukurova has to date taken no steps to cure its ongoing contempt, indicating that while it is willing to engage in discovery to revisit the question of personal jurisdiction, it will not participate in discovery regarding enforcement of the final judgment.
On April 9, Sonera brought an order to show cause, seeking an ex parte temporary restraining order, a preliminary injunction, a turnover order, and increased contempt fines. The Part I Judge entered the Temporary Restraining Order, and briefing began on Sonera's other requests. One of the principal goals of Sonera's proposal was to enjoin the "redemption transaction," which is the result of years of litigation in the British Virgin Islands ("BVI") and the Privy Council between Cukurova and Alfa Telecom Turkey Limited ("Alfa") over the same shares in Turkcell that were at issue in the Swiss arbitral award underlying this litigation. The Privy Council decided in late January 2013 that Cukurova would be given a chance to redeem the Turkcell shares from Alfa within a certain window of time and for a sum of money to be determined in a subsequent decision expected imminently. Recognizing that the redemption transaction was a crucial and fleeting opportunity for Cukurova, Sonera sought to have it enjoined in the hopes that doing so would induce Cukurova to pay its debt to Sonera.
On April 16, after full briefing, the Court held a conference to address Sonera's requests. At the conference, the Court heard argument about the terms of the proposed preliminary injunction after Cukurova indicated that it could not agree to participate in discovery on any of the factual issues relevant to the entry of the injunction and had no evidence to offer at a preliminary injunction hearing. The preliminary injunction was entered on April 18. The Court has set an expedited schedule for a hearing on entry of a final injunction, although Cukurova has reiterated that it will not participate in discovery relevant to that proceeding.
On April 26, after securing new counsel, Cukurova filed the instant motion, which seeks either dissolution of the preliminary injunction or a stay of the preliminary injunction pending appeal. A conference was held on April 29, and in Orders of the same day the Court set schedules for (1) full briefing on Cukurova's motion for dissolution, (2) briefing on Sonera's motion for an anti-suit injunction, and (3) the entry of a final injunction, to be determined after either further briefing or a trial, depending on whether Cukurova elects to participate in discovery such that a factual record may be developed. The first two motions were fully briefed on May 6.
DISCUSSION I. Dissolution of the Preliminary Injunction
In seeking dissolution of the preliminary injunction, Cukurova once again returns to the argument that this Court lacks personal jurisdiction, arguing that the current posture of the case -- post-judgment enforcement -- is a new proceeding and that the Court is therefore required to re-examine whether personal jurisdiction exists over Cukurova, and to consider new evidence in doing so. There is, to the contrary, no support in the case law for the proposition that the entry of a final judgment requires a court to revisit the issue of personal jurisdiction in what is, after all, the same action involving the same parties. The cases cited by Cukurova are not on-point, as they involve the question of whether an interest rate set by contract continues to apply after the entry of a final judgment. See FCS Advisors, Inc. v. Fair Fin. Co., 605 F.3d 144, 148 (2d Cir. 2010); Kotsopoulos v. Asturia Shipping Co., 467 F.2d 91, 95 (2d Cir. 1972). The issue of personal jurisdiction is before the Court of Appeals and therefore is not properly considered by this Court. See New York State Nat'l Org. for Women v. Terry, 886 F.2d 1339, 1350 (2d Cir. 1989).
The Second Circuit explained in Sierra Club v. U.S. Army Corps of Engineers, 732 F.3d 253 (2d Cir. 1984), that district courts have the discretion to dissolve preliminary injunctions and that "[t]he test of that discretion is measured by whether the requested modification effectuates or thwarts the purpose behind the injunction." Id. at 257. Cukurova makes no argument as to how dissolving the preliminary injunction would help effectuate its purpose, and indeed, doing so would completely thwart it. Dissolving the preliminary injunction and allowing Cukurova to execute the redemption transaction would presumably allow Cukurova to continue ignoring its discovery obligations, contempt fines, and the judgment it owes to Sonera.
Cukurova argues that the preliminary injunction should be dissolved because Sonera has not demonstrated that it would suffer irreparable harm absent an injunction. Of course, the redemption transaction itself would not injure Sonera; Sonera's position is rather that enjoining the redemption transaction gives it leverage over Cukurova that would allow it to secure satisfaction of its judgment, the legitimacy of which is not in dispute. Cukurova insists that Sonera has not demonstrated that it will be unable to collect its judgment if the redemption transaction goes forward, but this is largely thanks to Cukurova's refusal to participate in discovery regarding its financial position. It is thus totally unclear whether and when Sonera will have another opportunity to ensure that Cukurova pays its $932 million debt and accumulating contempt fines.
Cukurova also argues that because the redemption transaction will improve its financial position, it will be more able to pay its debt if the transaction is not enjoined. This argument ignores the unrebutted evidence that Cukurova is actively attempting to borrow funds to carry out the redemption transaction by granting as security a first-ranking pledge over the Turkcell shares it plans to redeem, thereby burdening them and rendering them unavailable to satisfy the judgment. Cukurova also points out that Sonera has sold Alfa an interest in this lawsuit, suggesting that the true purpose behind the preliminary injunction is not the satisfaction of Sonera's judgment but rather stopping the redemption transaction at the behest of Alfa. Regardless of where the proceeds may ultimately flow, there is no dispute that Sonera is entitled to the enforcement of its $932 million arbitral award, and ...