Opinion
No. 04 Civ. 5997 (DAB).
February 7, 2005
MEMORANDUM AND ORDER
Petitioner Paulson Investment Company petitions the Court pursuant to Section 9 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 9, to confirm an arbitration award issued on June 21, 2004. To date, Respondents have neither responded to Petitioner's confirmation action nor otherwise sought relief from the arbitration award. For the reasons stated below, the arbitration award is CONFIRMED.
I. BACKGROUND
In March, 2001, Petitioner and Respondents entered into an agreement, upon which Petitioner advanced $75,000 to Respondents. The advance was secured by a Promissory Note, dated March 16, 2001, which provides that Respondents Epifanio Almodovar, Wossen Belay, Nicholas Ferrer and Noel Yulfo jointly and severally promise to repay the sum advanced, and also provides that interest at the rate of 7% per annum is to begin accruing from the date the sum was advanced until paid. (Pet. ¶ 6; id. at Ex. 1.) The Promissory Note further provides that "In the event any claim or controversy arises concerning the amount of any particular minimum monthly payment . . ., the parties wish to first attempt to mediate the dispute. . . . Should the parties be unable to resolve any such dispute, Paulson shall have the right to pursue any and all remedies provided herein or otherwise as provided by law." (Id. at Ex. 1.) Respondents defaulted on the Note.
On April 23, 2003, Petitioner filed its Statement of Claim with the National Association of Securities Dealers, Inc. ("NASD"), for recovery of the amount due on the Note. (Id. at Ex. 2.) Respondents filed a Joint Statement of Answer and Counterclaims on July 21, 2003. (Id. at Ex. 3.) Respondents did not dispute NASD's jurisdiction over the matter. Further, the panel of arbitrators appointed by the NASD ("Panel") determined that Respondents were bound by the determination of the Panel on all issues before it since Respondents were members of the NASD and had answered the claim. (Id. ¶ 8.)
On June 21, 2004, after a hearing, the Panel issued an award to Petitioner, in the amount of $75,000, plus interest at the rate of 7% per annum from March 22, 2001, until the award is paid in full. (Id. at Ex. 4.)
Petitioner filed this confirmation action in the Southern District of New York on August 3, 2004. Petitioner served Respondents on August 13 and 14, 2004. Respondents have neither responded to the Petition nor separately brought a motion to vacate, modify or correct the arbitration award.
II. DISCUSSION
Confirmation of an arbitration award under Section 9 of the FAA, 9 U.S.C. § 9, is "a summary proceeding that merely makes what is already a final arbitration award a judgment of the Court." Florasynth, Inc. v. Pickholz, 750 F.2d 171, 176 (2d Cir. 1984). Section 9 also requires that a court, upon timely application by any party, must grant an order confirming the arbitration award, unless the award is vacated, modified or corrected as set forth in sections 10 and 11 of the FAA. See 9 U.S.C. § 9; Marsillo v. Geniton, No. 03 Civ. 2117, 2004 WL 12097925, at *4 (S.D.N.Y. June 1, 2004). A district court's review of an arbitration award is very limited "in order to avoid undermining the twin goals of arbitration, namely, settling disputes efficiently and avoiding long and expensive litigation."Willemijn Houdstermaatschappij, BV v. Standard Microsystems Corp., 103 F.3d 9, 12 (2d Cir. 1997) (quoting Folkways Music Publishers v. Weiss, 989 F.2d 108, 111 (2d Cir. 1993)). In its review, the district court is limited to examining whether "the arbitrator's award falls within the four corners of the dispute as submitted to him." Fiat v. Ministry of Fin. And Planning of Republic of Suriname, No. 88 Civ. 6639, 1989 WL 122891, at *4 (S.D.N.Y. Oct. 12, 1989) (quoting Orion Shipping and Trading Co. v. Eastern States Petroleum Corp., 312 F.2d 299, 300 (2d Cir. 1963)).
Indeed, none of the statutory grounds for vacation, modification or correction included in the FAA relate to the underlying merits of an arbitration award. See 9 U.S.C. §§ 10, 11; Florasynth, 750 F.2d at 176 ("The grounds for vacation are narrow. Courts may not question provisions of the award itself; rather, they may vacate only for conduct that has prejudiced the rights of the parties."). Moreover, "the showing required to avoid summary confirmation is high." Ottley v. Schwartzberg, 819 F.2d 373, 376 (2d Cir. 1987); see also National Bulk Carriers, Inc. v. Princess Management Co., 597 F.2d 819, 825 (2d Cir. 1979) ("only clear evidence of impropriety justifies a denial of summary confirmation.") (internal quotations omitted).
Applying this deferential standard of review, the Court finds nothing improper about the arbitration award granted to Petitioner. Respondents have made no showing as to any of the statutory grounds for vacation, correction or modification. Accordingly, the Court finds no reason why the arbitration award should not be confirmed.
Because Respondents have neither responded to Petitioner's application for confirmation nor filed their own motion for vacation, correction or modification within three months of the issuance of the award, they have waived their right to contest confirmation. See 9 U.S.C. § 12 ((requiring that a notice of motion to vacate, correct or modify an arbitration award be served on the opposing party within three months after the award is filed or delivered); Florasynth, 750 F.2d at 174 (holding that defendant's failure to move to vacate within the FAA's three-month time limit also precluded him from later opposing a motion to confirm the arbitration award).
III. CONCLUSION
For the reasons stated above, Petitioner's June 21, 2004 arbitration award is hereby CONFIRMED. The Clerk of the Court is DIRECTED to enter judgment accordingly and close the docket in the above-captioned case.
SO ORDERED.