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BSH Hausgerate GMBH v. Kamhi

United States District Court, S.D. New York

March 2, 2018

BSH HAUSGERATE GMBH, Petitioner,
v.
JAK KAMHI, Respondent.

          ATTORNEYS FOR PETITIONER PILLSBURY WINTHROP SHAW PITTMAN LLP BY: KENNETH W. TABER, ESQ. NICHOLAS M. BUELL, ESQ.

          ATTORNEYS FOR RESPONDENT DAVIDOFF HUTCHER & CITRON LLP BY: ERIC J. PRZYBYLKO, ESQ.

          OPINION

          ROBERT W. SWEET, U.S.D.J.

         Petitioner BSH Hausgerate GMBH ("BSH" or the "Petitioner") has petitioned, pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 6, 1958, 21 U.S.T. 2517, codified at 9 U.S.C. § 201 et seq. (the "New York Convention" or "Convention"), for an order confirming a foreign arbitration award of a money judgment for BSH and against Respondent Jak Kamhi ("Kamhi" or the "Respondent") in the amount of: (1) $544, 230; (2) €1, 900, 487.13; and (3) interest on those amounts under Article 4(a) of the Turkish Law No. 3095, at the applicable rate, compounded annually, from February 7, 2017, until full and final settlement of the award (the "Final Award"). See Am. Pet. 5, Dkt. No. 20.

         Based upon the conclusions set forth below, the petition is granted, and the Final Award is confirmed.

         Prior Proceedings

         Background on the relationship of the parties, the parties' arbitration agreements, the foreign arbitration process before a panel of three arbitrators (the "Arbitral Tribunal"), and the Final Award were set forth in the Court's October 18, 2017, also contained an agreement to arbitrate disputes before the ICC and under the ICC Rules. See id., Ex. B ¶ 5.

         On October 7, 2013, Kamhi, one of five claimants (the "Claimants"), submitted a Request for Arbitration to the ICC. See id., Exs. C, E ¶ 1 (defining the five claimants as "Claimants"). In the arbitration, Claimants sought monetary and non-monetary relief based on the theory that the termination of a distributorship agreement in 2008 (the "DA"), to which BSH was not a party, triggered an automatic rescission that terminated the SPA-BSH; accordingly, Claimants requested either that BSH return its SPA-BSH shares or pay damages for allegedly causing the breach. See id., Exs. C, E ¶¶ 143-47. On January 15, 2014, BSH filed its Answer to the Request for Arbitration, consenting to the ICC's jurisdiction. See id., Exs. D ¶¶ 11-12, E ¶ 10. The parties and Arbitral Tribunal agreed to the arbitration's Terms of Reference on May 19, 2014. See Declaration of Nicholas M. Buell dated September 22, 2017 ("Buell Sept. 22 Decl.") Ex. A, Dkt. No. 44.

         During the arbitration proceedings, BSH and the other respondents in the arbitration moved to have the arbitration bifurcated as to whether (i) the DA's termination automatically terminated the SPA-BSH (the "Automatic Termination Claim") and (ii) BSH caused the breach of the DA (the "Breach Claim"); on August 11, 2015, after briefings, an initial denial, and a renewed motion for bifurcation, the Arbitral Tribunal granted the request. Declaration of Eric J. Przybylko dated September 14, 2017 ("Przybylko Decl."), Exs. 2-3, 7, Dkt. No. 39. The Arbitral Tribunal noted that, after resolving the question of automatic termination, subsequent issues, "if any, will be determined by the [Arbitral] Tribunal in consultation with the Parties." IcL, Ex. 7 ¶ 47.

         On September 5 and 6, 2016, the Arbitral Tribunal conducted hearings in Switzerland. Buell July 28 Decl., Ex. E ¶ 134.

         On February 6, 2017, the Arbitral Tribunal issued its Final Award, awarding BSH a money judgment against the Claimants in the amount of: (1) $544, 230; (2) €1, 900, 487.13; and (3) interest on those amounts under Article 4(a) of the Turkish Law No. 3095, at the applicable rate, compounded annually, from February 7, 2017 until full and final settlement of the award. See Buell July 28 Decl., Ex. E ¶¶ 67-142, 574-79 & sec. XVIII. Prior to rendering its decision, the Arbitral Tribunal accepted briefing on whether a second phase would be unnecessary if the claim regarding automatic termination was rejected and, after determining that the SPA-DB had not been terminated, found in its Final Award that "no issue remains to be determined in any second phase of the proceedings" with regard to the Breach Claim. Id., Ex. E ¶¶ 488, 492; see id. ¶¶ 457-59, 475-88, 510, 515.

         On July 28, 2017, BSH filed the instant petition to confirm, which was amended on August 3, 2017. Dkt. Nos. 1, 20.

         On August 2, 2017, Petitioner moved to confirm an order of attachment issued against Respondent's real property located at 15 West 53rd Street, Apt. 32B, New York, New York 10019, which was granted in the October 18 Opinion. See id., 2017 WL 4712226, at *7.

         Following the October 18 Opinion, the parties requested oral argument on the instant petition, which was heard and marked fully submitted on December 6, 2017.

         Applicable ...


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