United States District Court, E.D. New York
MEMORANDUM & ORDER
NICHOLAS G. GARAUFIS, United States District Judge.
the court is Defendants LPG Trading Corp., Viktoria
Krakovskaya, and Eduard K. Krakovsky's Motion to Dismiss
based on forum non conveniens. (Mot. to Dismiss
("Mot.") (Dkt. 88).) For the reasons set forth
below, Defendants' Motion is DENIED.
NV Petrus SA ("Petrus") and Petroleum Resources
Petrus SA ("PRP") commenced this breach of contract
action in this court on May 19, 2014. (Compl. (Dkt. 1).) The
parties agree that the operative contracts contain
arbitration clauses, requiring Plaintiffs and Defendants to
arbitrate any disputes arising out of the contracts before
the London Court of International Arbitration
("LCIA"). (See Ex. J to Mot. ("Petrus
Contract") (Dkt. 88-11); Ex. K to Mot. ("PRP
Contract") (Dkt. 88-12).) In their Answer to the initial
Complaint, Defendants asserted two counterclaims: in their
First Counterclaim, Defendants sought money damages for
Plaintiffs' alleged breach of the parties'
agreements; in the Second Counterclaim, Defendants alleged
that this court does not have jurisdiction because the
parties agreed to arbitrate all disputes arising out of the
contracts. (Answer (Dkt. 5).)
subsequently amended their Complaint. (See First Am. Compl.
("FAC") (Dkt. 33).) In Defendants' Answer to
the First Amended Complaint, Defendants reasserted their
First and Second Counterclaims; added a Third and Fourth
Counterclaim, seeking money damages; and reiterated that the
court lacked jurisdiction, as the parties' dispute was
subject to arbitration before the LCIA and would be subject
to the laws of England. (Answer to FAC (Dkt. 38).)
parties have since conducted extensive discovery, engaged in
substantive motion practice, participated in numerous court
conferences and a court-sponsored mediation, prepared several
iterations of a joint pre-trial order, and drafted both
motions in limine and proposed jury instructions in
advance of trial. Trial is scheduled to begin in less than
two weeks, on May 15, 2017. Notwithstanding the fact that the
parties have litigated this case for nearly three years,
during the pre-trial conference on April 4, 2017, Defendants
for the first time sought and received leave from the court
to file a motion to dismiss for forum non
conveniens. Defendants filed the motion on April 14,
2017, and Plaintiffs filed their opposition to the motion on
April 28, 2017.
argue that the "forum selection clause, " i.e. the
arbitration clause, in the parties' contracts is
mandatory and may be enforced "at any time."
(See generally Defs. Mem. in Supp. of Mot.
("Defs. Mem.") (Dkt. 88-1).) Defendants further
assert that Plaintiffs are not prejudiced by Defendants'
belated motion to dismiss. (See id. ¶¶
57-63.) Plaintiffs oppose the motion, arguing that Defendants
have waived their right to arbitrate as well as their
argument that English law governs the dispute. (See
generally Pls.. Mem. in Opp'n to Mot. ("Pls..
Opp'n") (Dkt. 107).)
court finds that Defendants have waived their right to
arbitration as well as any argument they may have had that
English law governs the action. Accordingly, Defendants'
motion to dismiss is denied.
DEFENDANTS WAIVED THEIR RIGHT TO ARBITRATE THIS
arbitration clauses are a "subset of foreign forum
selection clauses." Vimar Seguros v Reaseguros, S.A.
v. M/V Sky Reefer, 515 U.S. 528, 534 (1995). "[T]he
appropriate way to enforce a forum-selection clause pointing
to a state or foreign forum is through the doctrine of
forum non conveniens." Atl. Marine Const. Co.,
Inc. v. U.S. Dist. Ct. for W. Dist. of Tex., 134 S.Ct.
568, 580 (2013). A motion to dismiss on forum non
conveniens grounds may be made at any time as a
procedural matter; however, a court may nonetheless consider
the defendant's delay in bringing such a motion. See
Wave Studio, LLC v. Gen. Hotel Mgmt. Ltd., No.
13-CV-9239 (CS), 2017 WL 972117, at *5 (S.D.N.Y. Mar. 10,
right to arbitration, like any other contract right, can be
waived." Doctor's Assocs., Inc. v. Distaio,
66 F.3d 438, 455 (2d Cir. 1995) (internal quotation
marks and citation omitted). Because there is a strong
federal policy favoring arbitration, "any doubts
concerning whether there has been a waiver are resolved in
favor of arbitration." PPG Indus., Inc. v. Webster
Auto Parts, Inc., 128 F.3d 103, 107 (2d Cir. 1997)
(internal quotation marks and citations omitted).
"Nonetheless, a party waives its right to arbitration
when it engages in protracted litigation that prejudices the
opposing party." Id. hi determining whether a
party has waived this right,  courts consider the following
factors: "(1) the time elapsed from when litigation was
commenced until the request for arbitration; (2) the amount
of litigation to date, including motion practice and
discovery; and (3) proof of prejudice." La. Stadium
& Exposition Dist. v. Merrill Lynch. Pierce, Fenner &
Smith Inc., 626 F.3d 156, 159 (2d Cir. 2010) (internal
quotation marks and citation omitted). "There is no
rigid formula or bright-line rule for identifying when a
party has waived its right to arbitration; rather, the above
factors must be applied to the specific context of each
particular case." Id. (internal quotation marks
and citation omitted). "That said, [t]he key to a waiver
analysis is prejudice." Id. (internal quotation
marks and citation omitted) (alteration in original).
"refers to the inherent unfairness-in terms of delay,
expense, or damage to a party's legal position-that
occurs when the party's opponent forces it to litigate an
issue and later seeks to arbitrate that same issue."
Doctor's Assocs., 107 F.3d at 134. Such
prejudice has been found where "'a party seeking to
compel arbitration engages in discovery procedures not
available in arbitration, makes motions going to the merits
of an adversary's claims, or delays invoking arbitration
rights while the adversary incurs unnecessary delay or
expense.'" S &R ...