National Aluminum Co. v. Peak Chemical Corp.

132 F. Supp. 3d 990, 2015 U.S. Dist. LEXIS 127060, 2015 WL 5634245
CourtDistrict Court, N.D. Illinois
DecidedSeptember 23, 2015
DocketCase No. 14-cv-01314
StatusPublished
Cited by2 cases

This text of 132 F. Supp. 3d 990 (National Aluminum Co. v. Peak Chemical Corp.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
National Aluminum Co. v. Peak Chemical Corp., 132 F. Supp. 3d 990, 2015 U.S. Dist. LEXIS 127060, 2015 WL 5634245 (N.D. Ill. 2015).

Opinion

MEMORANDUM OPINION AND ORDER

JOHN Z. LEE, United States District Judge

On February 16, 2005, Plaintiff National Aluminum Co., Ltd. (“NALCO”) won a final arbitral award (“Arbitral Award”) under India’s Arbitration and Conciliation Act against Defendant Peak Chemical Corporation, Inc. (“Peak”). After several years of appeals, this award was affirmed by the High Court of Delhi at New Delhi on February 7, 2012 (“High Court Judgment”). NALCO now seeks to enforce the Indian judgment under the Illinois Uniform Foreign-Country Money Judgments Recognition Act, 735 Ill. Comp. Stat. 5/12— 661, et seq. Noting that the Seventh Circuit has yet to address the issue, Peak contends that NALCO’s claim is barred by the three-year statute of limitations set forth in Section 2 of the Federal Arbitration Act (“FAA”). The parties have filed cross-motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure. Because the Court concludes that Section 2 of the FAA does not preempt applicable state law governing the recognition of foreign judgments, even when a judgment is based upon a foreign arbitral award, the Court grants NALCO’s motion and denies Peak’s motion.

Factual Background

The facts are largely undisputed. NAL-CO began this decades-long litigation when it initiated arbitration proceedings in India against Peak on February 7, 1997. Def.’s L.R. 56.1(b)(3)(C) Stmt. ¶ 1. NALCO alleged that Peak breached a contract to supply 35,000 dry metric tons of caustic [993]*993soda lye to NALCO; the arbitrator agreed. Compl., Ex. A, Arbitral Award, at 18, 40; Pl.’s L.R. 56.1(a)(3) Stmt. ¶ 7.

The Arbitral Award was issued on February 16, 2005, pursuant to India’s Arbitration and Conciliation Act. Pl.’s L.R. 56.1(a)(3) Stmt. ¶ 5. It granted NALCO $3,983,120.78 “on account of extra cost incurred by NALCO in procuring the Caustic Soda from Rank Enterprises, Sabic Marketing Limited, and Bah Trading,” and $27,107.00 “on account of excess amount paid against supply.” Def.’s L.R. 56.1(b)(3) Stmt. ¶ 8. The Arbitral Award also awarded NALCO interest at the rate of ten percent per annum on these amounts “from the date of payment by NALCO to various suppliers covered by risk purchase transactions .. .■ to the date of recovery of the awarded” and from “June 1994 ... to the date of recovery of the awarded amount,” respectively. Id. ¶9.1

Both Peak and NALCO challenged the Arbitral Award by filing petitions with the High Court of Delhi at New Delhi (the “High Court”). Pl.’s L.R. 56.1(a)(3) Stmt. ¶ 13. Peak petitioned to set aside the award, while NALCO cross-petitioned the arbitrator’s denial of other claimed damages. Id. While the parties dispute the precise character of the resulting judgment, they agree that the High Court upheld the Arbitral Award on December 4, 2012. Id. ¶¶ 17-19. Peak appealed the High Court Judgment, but its appeal was dismissed after it failed to post security in accordance with Indian law. Id. ¶22. The Indian appellate court expressed frustration in dismissing the appeal, noting that Peak aimed “to leave [NALCO] high and dry without the possibility of recovering any amount under the award.” Compl., Ex. C, at 1. NALCO instituted the present action to seek enforcement of the High Court Judgment in Illinois.

Legal Standard

“The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). The Court must evaluate evidence in the light most favorable to the nonmoving party and may not make credibility determinations or weigh evidence. Berry v. Chicago Transit Auth., 618 F.3d 688, 690-91 (7th Cir.2010).

Actions to recognize foreign money judgments and questions of preemption are often resolved at the summary judgment stage since legal questions generally predominate. See, e.g., Soc’y of Lloyd’s v. Ashenden, 233 F.3d 473, 481 (7th Cir.2000) (affirming summary judgment under Illinois Uniform-Money Judgments Recognition Act); NCR Corp. v. George A. Whiting Paper Co., 768 F.3d 682, 711-12 (7th Cir.2014) (affirming partial summary judgment on preemption issue). The Court addresses issues of foreign law as it would any question of law, except that it “may consider any relevant material or source, including testimony, whether or not submitted by a party or admissible under the Federal Rules of Evidence.” Fed.R.Civ.P. 44.1; see also Twohy v. First Nat. Bank of Chicago, 758 F.2d 1185, 1193-94 (7th Cir.1985).

Analysis

Resolution of this dispute hinges on two questions: (1) whether the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq., preempts recognition of the High Court Judgment under Illinois law; and, if not, (2) whether the High Court Judgment is cognizable under Illinois law.

[994]*9941. Doctrine of Conflict Preemption

Peak first argues that Chapter 2 of the FAA’s three-year statute of limitations on the enforcement of foreign arbitration awards preempts state law recognition of the High Court Judgment. See 9 U.S.C. § 207. Chapter 2 of the FAA was enacted to codify the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”). See 9 U.S.C. §§ 201-08; Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15, 94 S.Ct. 2449, 41 L.Ed.2d 270 (1974). The relevant provision provides that “within three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court ... for an order confirming the award.” 9 U.S.C. § 207.

The parties do not dispute that recognition of the Arbitral Award itself is governed by the New York Convention, as enacted through the FAA and Indian law, and is time barred by § 207. See Def.’s Mem. at 4. NALCO, however, takes a different tack and argues that, although recognition of the Arbitral Award per se may be time barred, the High Court Judgment that affirms the Arbitral Award is enforceable as a matter of Illinois law. Indeed, Illinois’ Uniform Foreign-Country Money Judgments Recognition Act allows for the recognition of a foreign-country judgment within 15 years, provided the judgment is still enforceable in its home country. 735 Ill. Comp. Stat. 5/12-669.

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132 F. Supp. 3d 990, 2015 U.S. Dist. LEXIS 127060, 2015 WL 5634245, Counsel Stack Legal Research, https://law.counselstack.com/opinion/national-aluminum-co-v-peak-chemical-corp-ilnd-2015.