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Sonera Holding B.V v. Ckurova Holding A&Amp;Scedil

United States District Court, Second Circuit

May 10, 2013

SONERA HOLDING B. V. Petitioner,
§KUROVA HOLDING A.Ş., Respondent.

Pieter Van Tol, Andrew Behrman, Erin Meyer, Pooja Boisture, Hogan Lovells U.S. LLP, New York, NY, for the petitioner.

Richard J. Holwell, Michael S. Shuster, Dorit Ungar Black, Demian A. Ordway, Holwell Shuster & Goldberg LLP, New York, NY, for the respondent.


DENISE COTE, District Judge.

Before the Court is §ukurova'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, §ukurova's request that the preliminary injunction be dissolved is denied, while its request that the injunction be stayed pending appeal is granted, provided §ukurova 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. §ukurova 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 §ukurova 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 §ukurova and confirming the arbitral award. Id . A final judgment was entered on September 21, and §ukurova appealed, arguing that the Court lacked personal jurisdiction. §ukurova 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. §ukurova 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 §ukurova in contempt, and imposed rapidly escalating fines. §ukurova 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 §ukurova 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 - that §ukurova 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 §ukurova, Sonera sought to have it enjoined in the hopes that doing so would induce §ukurova 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 §ukurova 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 §ukurova has reiterated that it will not participate in discovery relevant to that proceeding.

On April 26, after securing new counsel, §ukurova 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 §ukurova'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 §ukurova elects to participate in discovery such that a factual record may be developed. The first two motions were fully briefed on May 6.


I. Dissolution of the Preliminary Injunction

In seeking dissolution of the preliminary injunction, §ukurova 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 reexamine whether personal jurisdiction exists over §ukurova, 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 §ukurova 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 ...

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