Sonera Holding B.V. v. Çukurova Holding A.Ş

895 F. Supp. 2d 513, 2012 WL 3925853
CourtDistrict Court, S.D. New York
DecidedSeptember 10, 2012
DocketNo. 11 Civ. 8909(DLC)
StatusPublished
Cited by4 cases

This text of 895 F. Supp. 2d 513 (Sonera Holding B.V. v. Çukurova Holding A.Ş) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sonera Holding B.V. v. Çukurova Holding A.Ş, 895 F. Supp. 2d 513, 2012 WL 3925853 (S.D.N.Y. 2012).

Opinion

OPINION AND ORDER

DENISE COTE, District Judge:

Petitioner Sonera Holding B.V. (“Son-era”) seeks confirmation of a foreign arbitral award. Respondent gukurova Holding A.§. (“gukurova”) resists confirmation, citing the absence of personal jurisdiction, forum non conveniens, and irregularities in the Swiss arbitration. For the following reasons, the petition for confirmation is granted.

BACKGROUND

Sonera is organized under the laws of the Netherlands; gukurova is a joint stock corporation organized under the laws of the Republic of Turkey. The parties entered into a letter agreement dated March 25, 2005 (“Letter Agreement”). Section 5.4 of the Letter Agreement contained an arbitration clause, which reads in relevant part:

Any dispute, controversy or claim arising out of or in connection with this Agreement ... shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce (the “ICC Rules”), except as such ICC Rules may be modified below.
(a) The place of arbitration shall be Geneva, Switzerland ....
[...]
(d) Any award of the arbitral tribunal shall be final and binding on the Parties. The Parties hereby waive any rights to appeal any arbitration award to, or seek determination of any question of law arising in the course of arbitration from, jurisdictional courts.
(e) Any award of the arbitral tribunal may be enforced by judgment or otherwise in any court having jurisdiction of the award or over the person or the assets of the owing Party or Parties. Applications may be made to such court for judicial recognition of the award and/or an order for enforcement, as the case may be.

(Emphasis supplied.)

Sonera commenced arbitration under the ICC Rules on May 27, 2005. The principal issue of the first phase of the arbitration concerned whether the parties had concluded a share purchase agreement requiring the delivery of shares by gukurova in Turkcell Holding A.§., a joint stock corporation that owns a controlling stake in Turkcell Iletisim Hizmetleri A.§. (“Turkcell”), the operator of the largest mobile telephone service in Turkey, or whether the Letter Agreement had lapsed. During this phase of the arbitration, the tribunal addressed several objections to jurisdiction interposed by gukurova.

On January 15, 2007, the tribunal rendered the First Partial Award, finding that it had jurisdiction and ordering gukurova to sell shares to Sonera. When gukurova failed to sell the shares to Sonera, the arbitration entered a second phase.

On July 29, 2009, the tribunal issued the Second Partial Award, ordering gukurova to deliver the shares to Sonera and determining that the value of the shares as of July 30, 2007, was $1.8 billion in excess of the original $3.1 billion purchase price.

By letter of November 19, 2009, Sonera advised the tribunal that it waived its claim for delivery of the shares and sought damages for non-delivery. After a hearing on September 13 and 14, 2010, the tribunal issued a Final Award on September 1, 2011. In the Final Award, gukurova was ordered to pay Sonera $932 million in dam[518]*518ages for its failure to deliver the shares, with interest and costs.

On October 4, 2011, Sonera demanded payment. Sonera also commenced proceedings to enforce the Final Award. On October 4, it filed an application for enforcement in the British Virgin Islands; on October 14, in Switzerland and the Netherlands; and on October 17 in the Netherlands Antilles. Qukurova has opposed all efforts to confirm the Final Award.

Qukurova acknowledges that it cannot apply to Swiss courts to set aside the Final Award because the parties waived such rights in the Agreement. Qukurova did initiate its own arbitration in Switzerland on April 10, 2012, however, to obtain a refund of any amount to be paid pursuant to the Final Award. Sonera represents that it will commence an action in Turkey to enforce the Final Award after those Swiss proceedings have concluded. To date, Sonera has not been able to obtain any recovery on the Final Award.

On December 6, 2011, Sonera initiated this action seeking confirmation of the Final Award in the Southern District of New York. Service was completed in accordance with the Hague Convention on March 13, 2012, and a March 16 Order set a briefing schedule for Sonera’s petition to confirm the Final Award. The petition was fully submitted on June 1.

DISCUSSION

This petition for confirmation invokes the provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”) as implemented by the Federal Arbitration Act (“FAA”), 9 U.S.C. § 201 et seq. The FAA provides that a court confronted with a motion to confirm an arbitral award governed by the New York Convention “shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention.” 9 U.S.C. § 207. “The party opposing enforcement of an arbitral award has the burden to prove that one of the seven defenses under the New York Convention applies.” Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica, Inc., 403 F.3d 85, 90 (2d Cir.2005). This is a heavy burden, as there is a strong public policy in favor of international arbitration. Id. Furthermore, the Court’s review of arbitral awards pursuant to the Convention is “very limited in order to avoid undermining the twin goals of arbitration, namely, settling disputes efficiently and avoiding long and expensive litigation.” Id. (citation omitted).

Qukurova resists enforcement of the Final Award with three arguments. It contends that this Court lacks personal jurisdiction over it; that there are two grounds under the Convention that prevent enforcement of the Final Award; and that the petition should be denied under the doctrine of forum non conveniens.

1. Personal Jurisdiction

Qukurova contends that there is no personal jurisdiction over Qukurova un_ der either New York’s long arm statute or pursuant to the Due Process Clause. To confirm a foreign arbitral award pursuant to the New York Convention, a court is required to have personal or quasi in rem jurisdiction over the parties. Frontera Resources Azerbaijan Corp. v. State Oil Company of the Azerbaijan Republic, 582 F.3d 393, 397 (2d Cir.2009). Because a petition to confirm an arbitral award is “treated as akin to a motion for summary judgment,” D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95, 109 (2d Cir.2006), Sonera must establish that the undisputed facts in the petition and the accompanying record support personal jurisdiction by a preponderance of the evidence. See Ball [519]*519v. Metallurgie Hoboken-Overpelt, S.A.,

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Bluebook (online)
895 F. Supp. 2d 513, 2012 WL 3925853, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sonera-holding-bv-v-cukurova-holding-as-nysd-2012.