Satyam Computer Services, Ltd. v. Venture Global Engineering, LLC

323 F. App'x 421
CourtCourt of Appeals for the Sixth Circuit
DecidedApril 9, 2009
Docket07-2007, 08-1088
StatusUnpublished
Cited by14 cases

This text of 323 F. App'x 421 (Satyam Computer Services, Ltd. v. Venture Global Engineering, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Satyam Computer Services, Ltd. v. Venture Global Engineering, LLC, 323 F. App'x 421 (6th Cir. 2009).

Opinion

JULIA SMITH GIBBONS, Circuit Judge.

Respondent-appellant Venture Global Engineering, LLC (“VGE”) appeals the district court’s denial of its motion to vacate judgment pursuant to Federal Rules of Civil Procedure (“FRCP”) 60(b)(2) and 60(b)(3) and the district court’s order holding VGE in civil contempt. VGE sought to vacate the decision of the district court granting a petition by petitioner-appellee Satyam Computer Services, Ltd. (“Sa-tyam”) for recognition and enforcement of an arbitration award entered by the London Court of International Arbitration (“LCIA”) for Satyam. Satyam filed its action to enforce the arbitration award in the United States District Court for the Eastern District of Michigan, and the district court granted Satyam’s motion recognizing and enforcing the arbitration award on July 31, 2006. VGE’s failure to comply with the terms of that judgment led to the district court’s holding VGE in contempt on January 21, 2008. Because the district court did not abuse its discretion in denying VGE’s motion to vacate judgment and in holding VGE in contempt, we affirm.

I.

VGE is a Michigan limited-liability company that entered into a joint venture called Satyam Venture Engineering Services, Ltd. (“SVES”) with Satyam, an Indian corporation. The district court described the underlying dispute between the two companies as follows:

As part of their joint venture, the parties executed a Shareholders Agreement on October 20, 1999, which provided that any disputes would be “submitted for final, binding arbitration to the London Court of Arbitration” and that the agreement would be construed in accordance with Michigan law. Section 8.03 of the Shareholders Agreement required the option to be exercised “within one hundred twenty (120) days after receipt of notice of the Bankruptcy Event from the Bankrupt Shareholder” and specified that the option price would be the “book value” of the shares. Following a dispute between the parties, on or about July 25, 2005, Satyam requested an arbitration proceeding before the London Court of International Arbitration. The arbitrator determined that a Bankruptcy Event had occurred, which had triggered an option under the Shareholders Agreement for Satyam to purchase VGE’s shares of SVES at their book value, although the arbitrator *424 explicitly stated that the stock “is clearly worth much more than the book value.” The arbitrator concluded that although “Satyam exercised its option to buy VGE’s Satyam shares nearly two years after the first Bankruptcy Event, ... VGE’s decision not to give Satyam written notice of the Bankruptcy Event in accordance with Section 8.03 of the Shareholders Agreement gave Satyam the leisure to take its time in exercising its purchase option”.
The arbitrator entered the award on April 3, 2006, requiring VGE to deliver to Satyam share certificates in a “form suitable for immediate transfer to Sa-tyam or its designee” and to “do all that may otherwise be necessary to effect the transfer of such ownership to Satyam or its designee.” The arbitrator also required Satyam to pay U.S. $622,656 to VGE concurrently with the transfer of ownership, such sum being the “net difference between the amount payable by Satyam to VGE for the book value of the shares of SVES (plus interest) and the amount payable by VGE to Satyam for the disgorgement of royalties paid to VGE by Satyam (plus interest).” The Award also provided that VGE pay to Satyam the following: the costs of the arbitration, £48,777.48; Satyam’s additional costs, U.S. $1,488,454.11; and five percent annual interest compounded annually on the unpaid balance of the awarded sums until payment has been made. Finally, the Award released Sa-tyam from its obligations under a Non-compete Agreement with VGE.

Satyam Computer Servs., Ltd. v. Venture Global Eng’g, LLC, No. 06-CV-50351-DT, slip op. at 2-3 (E.D.Mich. July 13, 2006). Satyam filed a Petition for Recognition and Enforcement of the Arbitration Award on April 14, 2006, in the United States District Court for the Eastern District of Michigan, and VGE filed a Response and a Cross-Petition to Refuse and Deny Recognition and Enforcement on April 28, 2006. On that same day, VGE filed suit against Satyam in India in the Secunderabad City Civil Court (the “Civil Court”). VGE sought a declaration from the Indian courts that the arbitration award was invalid, an order vacating the award, and an injunction prohibiting the transfer of VGE’s SVES shares to Satyam. VGE obtained a temporary injunction from the Indian courts on June 15, 2006, maintaining the status quo and preventing the transfer of VGE’s SVES shares to Satyam. VGE also sought to hold Satyam in contempt in the Indian courts on the basis that Satyam’s actions in continuing proceedings in the United States to enforce the arbitration award constituted contempt of the Indian court’s order that the parties maintain the status quo with respect to the SVES shares while the Indian litigation proceeded. The High Court of Andhra Pradesh rejected VGE’s contempt motion on November 29, 2006. The Civil Court in India issued an oral ruling vacating the temporary injunction on December 28, 2006, and issued its written decision denying VGE’s contempt action and vacating the temporary injunction on January 25, 2007.

On July 31, 2006, the district court granted Satyam’s petition to enforce the arbitration award and issued a judgment ordering VGE to “deliver to Satyam ... [VGE’s SVES] share certificates in a form suitable for immediate transfer to Satyam” and to “do all that may otherwise be necessary to effect the transfer of its ownership interest in SVES to Satyam” upon concurrent payment of $622,656 from Satyam to VGE. A prior panel of this court affirmed the order of the district court enforcing the arbitration award on May 25, 2007. Venture Global Eng’g, LLC v. Satyam *425 Computer Servs., Ltd., 233 Fed.Appx. 517 (6th Cir.2007) (“Venture I”).

After the district court granted Sa-tyam’s petition to enforce the arbitration award, VGE filed a motion for a stay pending its appeal to this court on August 2, 2006. The district court granted the stay in part with respect to the monetary obligations of the parties but denied a stay as to the specific performance required of the parties. The district court ordered VGE to deliver its share certificates in SVES to Satyam for concurrent payment by Satyam of $622,656 within fourteen days of September 5, 2006. The Sixth Circuit also denied VGE’s motion for a stay pending appeal, finding that VGE had failed to demonstrate sufficient likelihood of success on the merits. VGE did not fulfill its obligation to deliver the share certificates to Satyam within fourteen days, and Satyam filed a motion for an order of civil contempt against VGE on February 6, 2007. Although there had been temporary injunctions in the Indian courts prohibiting transfer of the SVES shares in place during most of the fall of 2006, there were no such temporary injunctions in place on February 6 when Satyam filed its motion for contempt.

VGE opposed Satyam’s motion for an order of civil contempt, claiming on February 20, 2007, that it had been making a good faith effort to take the steps necessary to transfer the SVES stock without violating Indian law.

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