Opinion
CIVIL ACTION NO. H-01-495
July 16, 2002
MEMORANDUM AND OPINION
Lummus Global Amazonas, S.A. ("LGA") brought this suit to vacate, modify, or amend arbitration awards entered against it and in favor of Aguaytia Energy del Peru S.R. Ltda. ("Aguaytia"). Aguaytia moved to confirm and enforce the awards, as modified to include the parties' stipulation as to applicable credits and offsets, and for entry of final judgment. On June 13, 2002, this court entered a Memorandum and Order granting Aguaytia's motion for final judgment and ordering Aguaytia to submit a proposed form of final judgment by June 21, 2002. On June 21, 2002, this court adopted and entered Aguaytia's proposed form of final judgment, providing that:
In accordance with the Arbitration Awards of the Tribunal constituted by the International Court of Arbitration of the International Chamber of Commerce rendered in Arbitration No. 101 35/FMS/KGA, in favor of Aguaytia Del Peru S.R. LTDA ("Aguaytia"), and against Lummus Global Amazonas, S.A. ("LGA") ("the Awards"), the stipulations of the parties, and after allowing all proper credits and offsets, the Court ORDERS that:
1. The Awards are RECOGNIZED and CONFIRMED.
2. Aguaytia recover from LGA:
a. the total amount of US $9,265,089.00, consisting of US $7,821,539.00 in principal and US $1,443,550.00 in pre-award and postaward interest as of June 21, 2002;
b. Post-judgment interest calculated at an annual rate of 2.24% on the total judgment of US $9,265,089.00 from the day after entry of this Final Judgment until paid; and
c. Costs of Court.
All writs and processes for the enforcement and execution of this Final Judgment and costs shall issue as necessary.
This is a final judgment. The Court denies all relief not granted in this judgment.
LGA has objected to the form of the final judgment entered by this court. (Docket Entry No. 77). LGA asserts that the final judgment should be modified to make clear that this court recognized and confirmed the arbitration awards as modified to include the parties' stipulation as to applicable credits and offsets. LGA also objects to this court's award of costs of court. Aguaytia has responded. (Docket Entry No. 78). Aguaytia asserts that "the Court has taken into account the stipulations of the parties and has allowed for all proper credits and offsets; but the Court has not modified any of the Awards of the Tribunal. Therefore, LGA's first objection should be overruled." ( Id. at 1). Agnaytia asserts that "ral review of the parties' respective positions as set forth in their motions and other pleadings before the Court shows that Aguaytia is the prevailing party. Therefore, LGA's second objection should be overruled." ( Id.).
In the June 13, 2002 Memorandum and Order, this court stated: "[t]his court modifies the arbitration award by incorporating the parties' Stipulation, entering judgment in the amount of $9,253,891.00, consisting of $7,821,539.00 in principal and $1,432,352.00 in pre-award and post-award interest, in favor of Aguaytia." The form of final judgment Aguaytia proposed and this court entered makes clear that this court incorporated and gave effect to the parties' stipulated credits and offsets to the panel's awards. The final judgment reflected the full amount of the confirmed panel awards, modified only to give effect to the parties' stipulated credits and offsets. However, the form of final judgment did not make clear that this court confirmed the awards, but gave effect to the parties' stipulation by modifying the amount owing to Aguaytia from LGA resulting from the arbitration awards to offset the amounts the parties stipulated were owing and due from Aguaytia to LGA. This court GRANTS LGA's motion to modify the form of final judgment only to make clear that "the Awards are recognized and confirmed, as modified to incorporate the parties' stipulations." This court enters a revised form of final judgment by separate order.
In the Memorandum and Order, this court stated that the amounts were calculated as of June 10, 2002, with post-award interest accruing at $1,018 per day until entry of final judgment. The interest amount in the final judgment includes eleven days of post-award interest accrued between June 10, 2002 and entry of final judgment on June 21, 2002.
LGA also asserts that Aguaytia should not have been awarded costs of court. Section 24.02 of the parties' Agreement, which was expressly incorporated into the parties' Terms of Reference, provides that:
The arbitrators shall determine who is the prevailing party and shall award attorney fees and pre-award and postaward interest at commercial rates to the prevailing party, . . . . Fees and expenses associated with arbitration (including the cost of such arbitration) under this Section 24.02 will be paid by each party unless otherwise determined by the arbitrators. Fees and expenses associated with the enforcement of arbitral awards shall be paid by the party against whom that enforcement is sought.
(Docket Entry No. 21, Ex. 5, pp. 2-3).
The arbitration panel determined that Aguaytia was the prevailing party in the arbitration and awarded Aguaytia attorney fees incurred in the arbitration. The panel also determined that Aguaytia was entitled to $525,000.00 in costs and expenses incurred in the arbitration.
Rule 54(d) authorizes the award of costs to the prevailing party. FED. R. CIV. P. 54(d)(1); see Schlobohm v. Pepperidge Farm, Inc., 806 F.2d 578, 584 (5th Cir. 1986) (applying Rule 54(d) to action to enter judgment on arbitration award but denying costs where neither party "prevailed"); Matter of Arbitration Between Trans Chem. Ltd. and China Nat. Machinery Import Export Co., 978 F. Supp. 266, 314 (S.D.Tex. 1997) (awarding costs of court to prevailing party). The Fifth Circuit has recognized that in proceedings to confirm and enforce arbitration awards, district courts enjoy "wide discretion" in determining whether to award costs of court. See Executone Info. Sys., Inc. v. Davis, 26 F.3d 1314, 1330-31 (5th Cir. 1994).
LGA sought to vacate the entire award on a number of grounds. This court found many of those grounds without merit. This court found that one of the grounds LGA raised in challenging the arbitration award, relating to the award of IGV taxes, required remand of that discrete issue to the arbitration panel. Aguaytia subsequently withdrew its claim for IGV taxes. Aguaytia sought to modify the arbitration awards to incorporate the parties' stipulations and to confirm and enforce the awards as modified. In the alternative, Aguaytia sought to confirm and enforce the awards, without incorporating the amounts Aguaytia agreed it owed LGA by way of offset. After extensive analysis, this court agreed that the appropriate course under the arbitration statute and applicable cases was to confirm and enforce the arbitration awards in favor of Aguaytia, modified only to incorporate the parties' stipulations as to the offsets and credits Aguaytia owed LGA, and to enter final judgment in favor of Aguaytia for the amount of the arbitration awards offset by the stipulated amounts. In addition to being the prevailing party in the arbitration, Aguaytia is the prevailing party in this action to confirm and enter judgment enforcing the arbitration award.
In accordance with Rule 54(d) and section 24.02 of the Agreement, this court awards Aguaytia its costs of court incurred in this proceeding to enforce the award. LGA's objection to the award of costs is DENIED.