Al Maya Trading Establishment v. Global Export Marketing Co., Ltd, No. 16-CV-2140 (S.D.N.Y. Mar. 17, 2017) [click for opinion]
Al Maya Trading Establishment ("Al Maya"), a distributor of food products in the United Arab Emirates, petitioned the Southern District of New York to confirm an arbitral award in its favor against Global Export Marketing Co., Ltd ("GEMCO"), a New York-based exporter of foodstuffs and related products, pursuant to the Federal Arbitration Act (9. U.S.C. § 1 et seq.) and the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (9 U.S.C. § 201 et seq.). GEMCO, in turn, moved to vacate the award, prompting Al Maya to move for sanctions under Federal Rule of Civil Procedure 11. The court confirmed the award and denied both GEMCO's motion to vacate and Al Maya's motion for sanctions.
At issue was the scope of discovery. At the beginning of the arbitration proceedings, the parties agreed to focused disclosure of documents in order to reach a speedy and efficient resolution of their dispute. Nevertheless, when Al Maya produced profit and loss statements after being compelled to do so by the arbitration panel, GEMCO sought to obtain additional information. GEMCO argued that it did not have the ability to verify the accuracy or completeness of the allocations contained in the profit and loss statements and thus requested supporting documentation. The panel denied GEMCO's request.
According to GEMCO, in making that decision, the panel refused to hear evidence that was pertinent to the controversy, which is ground for vacatur. The court rejected GEMCO's arguments, finding that procedural questions are left to the discretion of the arbitrator. The court further reasoned that there was no fundamental unfairness since the parties had agreed to limited discovery at the beginning of the arbitration.
While the court disagreed with GEMCO's position, it did not find that the motion to vacate was frivolous or was made for an improper purpose. The court thus declined to issue sanctions.