Summary
rejecting the argument that a foreign action brought pursuant to Cameroon law was insufficiently identical to the claims in a domestic action proceeding under United States federal law, because "the parties' dispute" over the validity of the underlying agreement was before the courts in both forums
Summary of this case from Bailey Shipping Ltd. v. Am. Bureau of ShippingOpinion
No. 05 Civ. 655 (LTS)(DFE).
June 7, 2005
MEMORANDUM ORDER AND INJUNCTION
This matter comes before the Court on the renewed motion of Petitioner SG Avipro Finance Ltd. ("SG Avipro") to compel arbitration, as well as the motion of SG Avipro for an anti-suit injunction enjoining Respondent Cameroon Airlines ("CA") from proceeding with a pending lawsuit filed in Cameroon (the "Cameroon Action") concerning the validity of the June 25, 2002, Finance Lease Agreement — an issue that is also raised in connection with the demand for arbitration. Petitioner filed its original verified petition to compel arbitration on January 19, 2005, and CA responded by filing a motion to dismiss the petition to compel arbitration on February 11, 2005. Invoking Federal Rules of Civil Procedure 12(b)(1) and 12(b)(2), CA argues in its motion to dismiss that the Court lacks both subject matter jurisdiction of the action and personal jurisdiction over CA. CA also seeks, in the event its motion to dismiss is denied, a jury trial pursuant to Section 4 of the Federal Arbitration Act ("FAA"), 9 U.S.C. § 4, on the issue of whether a contract exists between the parties. The Court issued an order on March 2, 2005, providing that the Court would treat CA's motion to dismiss as a motion for summary judgment pursuant to Fed.R.Civ.P. 56, and afforded the parties an opportunity to file supplemental submissions.
On April 8, 2005, the Court rendered an oral decision denying CA's motion for summary judgment to the extent CA sought dismissal of SG Avipro's petition for lack of subject matter jurisdiction and for lack of personal jurisdiction. The Court granted CA's application for a jury trial on the issue of whether the June 25, 2002, Finance Lease Agreement is a forgery, finding that CA had proffered evidence that, read in the light most favorable to CA, could support a finding of forgery, and therefore that there was a material issue of disputed fact as to the making of the agreement which warranted a jury trial. The Court denied CA's motion for summary judgment in all other respects, finding that CA failed to proffer evidence in support of its contention that the June 25, 2002, Finance Lease Agreement was the product of some unspecified form of fraud other than forgery, and that therefore CA had not demonstrated its entitlement to a jury trial as to that issue.
Familiarity with the Court's April 8, 2005, oral decision is presumed.
SG Avipro's Renewed Motion to Compel Arbitration
Subsequent to the Court's April 8, 2005, decision, and in support of its renewed motion to compel arbitration, SG Avipro proffered the Declaration of Yves Michel Fotso, dated April 16, 2005 ("Fotso Declaration"), in which Yves Michel Fotso ("Fotso") states under penalty of perjury that he did sign the June 25, 2002, Finance Lease Agreement in his capacity as Managing Director and CEO of CA. SG Avipro also proffered, as an exhibit to the Fotso Declaration, a letter, dated February 15, 2005, from Fotso to the current Managing Director of CA, Thomas Dakayi Kamga ("Kamga"), acknowledging that the June 2002 Finance Lease Agreement "has been regularly signed by CAMAIR," and describing the circumstances under which that Agreement was allegedly agreed upon and executed.
The Court finds that SG Avipro has proffered sworn, admissible evidence that Fotso signed the June 25, 2002, Finance Lease Agreement while he was an officer of CA. While CA contends that Fotso's explanation in his February 15, 2005, letter of the circumstances surrounding the signing of the June 25, 2002, Finance Lease Agreement is inconsistent with certain other correspondence related to the lease, CA has not proffered any evidence to contradict the sworn statement of Fotso that he signed the June 25, 2002, Finance Lease Agreement. Thus, the Court finds that there is no longer a disputed issue of material fact as to the one issue that was left outstanding by the Court's April 8, 2005, oral decision — whether the June 25, 2002, Finance Lease Agreement is a forgery — and that Petitioner is entitled as a matter of law to an order compelling arbitration.
Accordingly, Petitioner's renewed motion to compel arbitration is granted. The parties are directed to proceed with arbitration forthwith.
SG Avipro's Motion for an Anti-Suit Injunction
An anti-suit injunction enjoining a party from pursuing a parallel litigation in a foreign forum "may be imposed only if: (A) the parties are the same in both matters, and (B) resolution of the case before the enjoining court is dispositive of the action to be enjoined." Paramedics Electromedicina Comercial, Ltda. v. GE Medical Sys. Info. Techs., Inc., 369 F.3d 645, 652 (2d Cir. 2004) (citing China Trade Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33 (2d Cir. 1987)). If both threshold requirements are met, "then the party seeking the injunction must show either that the `foreign action threatens the jurisdiction of the enjoining forum' or that `the strong public policies of the enjoining forum are threatened by the foreign action.'"Smoothline Ltd. and Greatsino Electronic Ltd. v. North American Foreign Trading Corp., No. 00 Civ. 2798(DLC), 2002 WL 273301, at *6 (S.D.N.Y. Feb. 27, 2002) (quoting China Trade, 837 F.2d at 36.) Courts have also concluded that a more lenient standard should be applied in cases like this one, where the domestic court has already decided the merits, reasoning that in such cases "comity considerations are less strong." Farrell Lines Inc. v. Columbus Cello-Poly Corp., 32 F. Supp. 2d 118, 131 (S.D.N.Y. 1997) (citing Laker Airways Ltd. v. Sabena, Belgian World Airlines, 731 F.2d 909 (D.C. Cir. 1984)).
The Court finds that, although the more lenient standard may be applied here because the Court has already decided the merits, SG Avipro has demonstrated that the requirements for enjoining the parties from proceeding in the Cameroon Action are satisfied even under the stricter standard that applies before the merits have been decided. Although the parties named in both actions are not identical, they are sufficiently similar to satisfy the first threshold requirement because the uncontroverted evidence of record demonstrates that the real parties in interest are the same in both actions. See Paramedics, 369 F.3d at 652-53;Motorola Credit Corp. v. Uzan, No. 02 Civ. 666 (JSR), 2003 WL 56998, at *2 (S.D.N.Y. Jan. 7, 2003).
The second threshold requirement is satisfied because resolution of the issues brought before the Court in the instant action (whether the June 25, 2002, Finance Lease Agreement that includes the arbitration clause is a validly executed agreement requiring the parties to arbitrate their underlying disputes or whether the agreement is void because it is a forgery or the product of some other type of fraud, and whether CA is obliged to arbitrate any other issues concerning the contract) is dispositive of the Cameroon Action in which CA seeks a decree that the June 25, 2002, Finance Lease Agreement is void. In the Cameroon Action, CA makes similar, if not identical, arguments to those it makes in the instant case. (See Writ of Summons in Cameroon Action, Exh. to Supplemental Declaration of Richard J. Cairns in Opposition to Motion for Anti-Suit Injunction, dated May 17, 2005.)
The Court finds unpersuasive CA's argument that resolution of the instant action is not dispositive of the Cameroon Action because the issues to be decided in the two actions are not precisely the same given that CA seeks a decree in the Cameroon Action that the agreement is void under Cameroon law, while the issue of the validity of the agreement turns on federal substantive law in the instant action. Irrespective of choice of law, the parties' dispute as to the validity of the June 25, 2002, Finance Lease Agreement has been placed before the courts in both the domestic and foreign forums.
Finally, the Court finds that the enjoining forum's strong public policy in favor of arbitration, particularly in international disputes, see Smith/Enron Cogeneration Ltd. P'ship, Inc. v. Smith Cogeneration Int'l, Inc., 198 F.3d 88, 92 (2d Cir. 1999), would be threatened if CA were permitted to continue to pursue the Cameroon Action, particularly in light of the Court's decision herein granting SG Avipro's motion to compel arbitration.
Accordingly, for the foregoing reasons, SG Avipro's motion for an anti-suit injunction is granted. CA and all those working in concert with it are hereby permanently enjoined from maintaining or further pursuing the Cameroon Action.
The Clerk of Court is respectfully requested to close this matter.
SO ORDERED.