Iraq Telecom Ltd. v. Mustafa

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IRAQ TELECOM LIMITED v. SIRWIN SABER MUSTAFA, KOREK TELECOM COMPANY LLC, and KOREK INTERNATIONAL MANAGEMENT LIMITED

Civil Action No. 24-3728

United States District Court, E.D. Pennsylvania

August 22, 2024

MEMORANDUM

R BARCLAY SURRICK, J.

Presently before the Court is Iraq Telecom Limited's (“Iraq Telecom”) Motion to Confirm Foreign Arbitration Award (“Motion to Confirm”). (ECF No. 2.) This Motion was originally filed in the miscellaneous action captioned In re: Ex Parte Application of Iraq Telecom For an Order to Obtain Discovery for Use in Foreign Proceedings Pursuant to 28 U.S.C. § 1782, 19-mc-175-RBS (“Section 1782 Action”).^[1](ECF No. 115.) Iraq Telecom seeks confirmation of the arbitration award pursuant to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 21 U.S.T. 2517, June 10, 1958, as implemented, 9 U.S.C. §§ 201-208 (“New York Convention”), and the Federal Arbitration Act, 9 U.S.C §§ 1-14 (“FAA”). For the following reasons, the Motion to Confirm will be granted.

I. BACKGROUND^[2]

A. The Section 1782 Action

On November 5, 2019, Iraq Telecom Limited filed the ex parte Section 1782 Action seeking an Order to take discovery from Dechert LLP for use in a then-pending foreign arbitration proceeding administered by the International Chamber of Commerce (the “ICC”) and in a contemplated proceeding in the United Kingdom. (Section 1782 Mem., ECF No. 1-1, at 1.) Iraq Telecom instituted the ICC Arbitration against Sirwan Saber Mustafa (“Mustafa”), Korek International (Management) Limited (“CS Ltd.”), and Korek Telecom Company LLC (“Korek”) (collectively, “Intervenors”) alleging various breaches and malfeasance in connection with the parties' business transactions. (Id. at 19-20.) Iraq Telecom sought the requested Section 1782 discovery in this Court because Dechert resides in this district. (ECF No. 1-1 at 23.) We granted Iraq Telecom's § 1782 Application on December 5, 2019. (ECF No. 11.)

On July 1, 2022, Mustafa, CS Ltd., and Korek moved to intervene in the Section 1782 Action as of right and/or permissively pursuant to Federal Rule of Civil Procedure 24. (ECF No. 82.) They separately filed an Application Pursuant to 28 U.S.C. § 1782 For an Order to Take Discovery From Dechert LLP For Use In a Foreign Proceeding and Motion for Expedited Discovery. (ECF No. 83.) Intervenors argued that because Iraq Telecom intended to use the discovery obtained from Dechert against them in the ICC Arbitration, they had a right to intervene and submit an application pursuant to 28 U.S.C. 1782 to obtain that discovery. (ECF No. 82 at 1-2; ECF No. 83 at 1-6.) Intervenors' Motion and § 1782 Application were granted on March 8, 2023. (ECF Nos. 101, 102.)

B. The Arbitration Award and Motion to Confirm

On April 7, 2023, Iraq Telecom filed a letter advising the Court that the ICC Arbitration tribunal had issued a Final Award in favor of Iraq Telecom and against Intervenors in the total amount of $1.65 billion. (ECF No. 105.) On July 3, 2023, Iraq Telecom filed the instant Motion to Confirm and supporting Memorandum of Law (ECF Nos. 115, 115-1), with attached copies of the Final Award and the parties' agreements, including agreements to arbitrate, referenced therein. (ECF Nos. 115-3-115-6.) Also accompanying the Motion to Confirm was a Certificate of Service stating that on July 3, 2023, true and correct copies of Iraq Telecom Limited's Motion and all papers submitted in support thereof were electronically filed and may be viewed and downloaded from ECF. (ECF No. 115-9.) Intervenors did not file a response to the Motion or request an extension of time in which to respond. (See ECF No. 118.) On August 24, 2023, Iraq Telecom, on behalf of itself and International Holdings Limited, requested the entry of default against the Intervenors for failure to defend. (ECF No. 119.)

On September 22, 2023, more than two months after Iraq Telecom filed its Motion to Confirm, counsel for the Intervenors moved to withdraw from the Section 1782 Action, with their clients' consent. Counsel asserted that the action was adjudicated when the discovery applications were granted and claimed that their withdrawal would not prejudice any party, interfere with the administration of justice, or “delay this § 1782 action.” (Mot. to Withdraw, ECF No. 121 at 1-2) (emphasis added). In moving to withdraw, counsel did not directly reference Iraq Telecom's Motion to Confirm. Instead, they contended that Intervenors had discharged counsel because the “limited purpose” of their engagement “was achieved when [they obtained] the March 8, 2023 Order” granting Interveners' Motion to Intervene and § 1782 Application, and that “Interveners did not authorize [counsel] to accept service or otherwise consent to the jurisdiction of this Court over Interveners under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 21 U.S.T. 2517, June 10, 1958, as implemented, 9 U.S.C. §§ 201-208, . . . and the Federal Arbitration Act, 9 U.S.C. §§ 1-14, . . ., as related to confirmation of the Final Award.” (Mot. to Withdraw at 4, n.2; see also Sullivan Decl., ECF No. 121-1, ¶ 8.) Iraq Telecom filed a Response in opposition to the Motion to Withdraw, Intervenors filed a Reply, and Iraq Telecom filed a Surreply. (ECF Nos. 123, 124, 125.) The Motion to Withdraw is pending.

II. DISCUSSION

A. The Motion to Confirm Should Be Addressed in a Civil Action and Is Properly Before This Court.

Federal district courts have subject matter jurisdiction over motions to confirm arbitration awards under the New York Convention, as implemented by Chapter 2 of the FAA. See, e.g., Jiangsu Beier Decoration Materials Co., Ltd. v. Angle World LLC, 52 F.4th 554, 559 (3d Cir. 2022) (citing 28 U.S.C. § 1331 and 9 U.S.C § 203 and noting that a recipient of foreign arbitration award may petition a district court to enforce it). However, as noted above, we determined that the Motion to Confirm should be addressed in a civil action, rather than in the miscellaneous Section 1782 Action in which it was initially filed. Although on-point authority on this issue is limited, our conclusion is consistent with available guidance and the rulings of other courts.

Initially, we and other courts have looked to the District Clerks' Manual, which is published by the Administrative Office of the United States Courts and sets forth the nationwide guidelines for prescribed uses of the miscellaneous docket. See https://jnet.ao.dcn/policy-guidance/district-clerks-manual/chapter-3-case-management (last visited August 12, 2024). At the time of filing, civil matters are classified “as either civil or miscellaneous cases depending on the nature of the relief sought in the initiating document. At a later point, a miscellaneous case may become a contested proceeding, and will then be assigned a civil case number for statistical purposes.” Id. § 3.02.a. The Manual explains that, in general, “[a] miscellaneous number is assigned to ancillary and supplementary proceedings not defined as civil actions.” Id. § 4.03.a.1. (i). The Manual further provides:

Miscellaneous numbers are assigned to a variety of matters filed with the court which are not properly considered civil or criminal cases. These matters, however, may be directly or indirectly related to civil or criminal cases pending within the district or another district. In general, miscellaneous actions are used for administrative matters that require resolution through the judicial system.

Id. As the Third Circuit has noted, motions to confirm arbitral awards are “not listed among the 15 types of miscellaneous filings identified” in the Manual. Pieczynski v. Commonwealth of Pennsylvania, No. 21-1960, 2021 WL 5745694, at *1 (3d Cir. Dec. 2, 2021) (citing District Clerk's Manual § 4.03(a)(1) and affirming district court dismissal of confirmation motion filed in miscellaneous action after movant failed to pay civil action filing fee as ordered).

Moreover, the Third Circuit observed, “[t]he few District Courts to have addressed the issue have concluded that an application to confirm an arbitration award is not a miscellaneous filing.” Id. (citing Rodrick v. Kauffman, 455 F.Supp.3d 546, 548 (M.D. Tenn. 2020)); see also Rushotel Liab. Co. v. Eagles of USA, Inc., No. 11-267, 2011 WL 1630069, at *1 (E.D.N.Y. Mar. 25, 2011) (noting that after petitioner initially filed a miscellaneous action seeking confirmation of a foreign arbitral award, the clerk of court was directed to open a civil action, docket all future filings therein, and close the miscellaneous action), report and recommendation adopted as modified, No. 11-267, 2011 WL 1628034 (E.D.N.Y. Apr. 28, 2011). Finally, the Third Circuit expressly stated in Pieczynski:

We have recently characterized an application to confirm an arbitration award as a “summary proceeding.” Teamsters Local 177 v. United Parcel Serv., 966 F.3d 245, 252 (3d Cir. 2020). We are satisfied that a “summary proceeding” qualifies as a “proceeding” under § 1914(a).

Id.

While procedurally we rule on this Motion in a separate civil action, the parties are not required to satisfy the requirements of formal pleadings, such as the filing and service of a summons and complaint. See Teamsters Local 177, 966 F.3d at 254; see also Jiangsu, 52 F.4th at 560 (“[B]ecause, by statute, an application to confirm a foreign arbitration award must ‘be made and heard in the manner provided by law for the making and hearing of motions,'” many of the procedural rules of civil litigation are inapplicable to petitions under the New York Convention (citing 9 U.S.C. § 6)); TermoRio S.A. E.S.P. v. Electranta S.P., 487 F.3d 928, 940 (D.C Cir. 2007) (“[M]otions to enforce arbitral awards should proceed under...