Award Confirmed in Terra Towers

On September 6, 2023, the Southern District of New York confirmed the arbitration award held by Telecom Business Solutions, LLC, LATAM Towers, LLC, and AMLQ Holdings Ltd. against Terra Towers Corp., TBS Management S.A., and DT Holdings, Inc.

The respondents in this case sought to vacate the award on four bases: (1) the Tribunal acted in "manifest disregard of law," (2) the Tribunal denied the respondents a full and fair opportunity to be heard, (3) the Tribunal exceeded its authority, and (4) the Tribunal demonstrated "evident partiality." The Court found these arguments to be "without merit."

In rejecting respondents' arguments, the Southern District emphasized that the "manifest disregard of law" basis for vacating an award is a "doctrine of last resort" limited to "exceedingly rare instances where some egregious impropriety on the part of the arbitrators is apparent." Similarly, vacatur under FAA Section 10(a)(3) is limited to those "most egregious error[s] which adversely affect the rights of a party." The Court found that not to be the case here where "[r]espondents had ample opportunity to be heard during the proceedings ... including -- by [r]espondents' own estimation -- 'more than 80 (mostly signle spaced) pages of briefing,' 'more than 1,300 pages of exhibits,' and a three-hour hearing with arguments from both sides." The Court further found that the Tribunal had a "broad grant of authority" and that respondents' claim of bias fails, among other reasons, because they had agreed to abide by the AAA Commercial Arbitration Rules stating that decisions by the ICDR shall be conclusive.

The case is Telecom Business Solution, LLC v. Terra Towers Corp., No. 22-cv-1761 (S.D.N.Y.). Petitioners were represented by David Landman, Gregory Djordjevic, Karherine Michelle Poldneff, and Michael Ungar from Ulmer & Berne LLP, as well as Gregg Weiner, Andrew Simon Todres, Daniel Ward, Ethan Fitzgerald, and Katherine McDonald of Ropes & Gray LLP. Respondents were represented by George Kroup and John Baughman from the Law Offices of John F. Baughman, Jonathan Lupkin and Michael B. Smith of Lupkin PLLC, John Basinger of Saul Ewing Arnstein & Lehr LLP, as well as Luke Jacobs and Juan Jose Rodriguez of Carey Rodrigues Milian, LLP.

The opinion may be downloaded below.

Telecom Business Solutions v. Terra Towers Opinion .pdf

Download PDF • 821KB

Time to Vacate an Arbitration Award Starts to Run when Award Is Issued Under the FAA

The Southern District of New York issued an opinion and order on May 22, 2023, dismissing a parties' Petition to Vacate an arbitral award as untimely.

Although the petitioner argued that the time to move to vacate had not started to run because he had “neither received a copy of the Award by mail nor been personally served with a copy of the Award," the Court pointed out that the argument is based on overruled precedent.

The Court explained:

While it is true that this Court previously held that, per Rule 39(f), Section 12 of the FAA’s three-month service period for a petition to vacate an AAA award was not triggered until the petitioner received the AAA’s award by personal service or mail, Salus Cap. Partners, LLC v. Moser, 289 F. Supp. 3d 468, 476 (S.D.N.Y. 2018), that decision (and the other decisions cited by [Petitioner]) preceded the Second Circuit’s recent opinion in Dalla-Longa, 33 F.4th at 696. Dalla-Longa similarly involved a petition to a vacate an AAA employment arbitration award, and there, the Second Circuit clearly stated that the three-month service period under Section 12 of the FAA began to run when the AAA award was issued. See id. (providing that, because “the arbitration award was issued on September 9, 2019,” the petitioner “thus had until December 9, 2019, to properly serve notice of any motion or petition to vacate the award”). In accordance with that ruling, courts in this Circuit, including this Court, have subsequently held that Section 12 of the FAA’s three-month service clock starts when an award is issued, not when it is legally served upon the parties to the arbitration. See e.g., Moster v. Credit Suisse Sec. (USA) LLC, No. 22 Civ. 999 (NRB), 2022 WL 4467626, at *7 (S.D.N.Y. Sept. 25, 2022) (“[I]t is undisputed that the ‘clock’ for the three-month period for service of the petition began ticking the day the award was issued.”); Gross v. HSBC Bank USA, N.A., No. 21 Civ. 8636 (PAC), 2022 WL 2967630, at *2 (S.D.N.Y. July 27, 2022) (“Under the FAA, a losing party has three months following the issuance of an award to move to vacate or modify the award.”); Kaplan v. Merrill Lynch Lynch, Pierce, Fenner & Smith Inc., No. 22 Civ. 1333 (ER), 2022 WL 2110391 at *3 (S.D.N.Y. June 10, 2022) (noting that three-month service period under Section 12 of the FAA began to run on the date the award was issued).

The opinion can be dowloaded below.

Terwilliger v. Resource America, Inc. et al, 1_22-cv-09610, No. 36 (S.D.N.Y. May. 22, 2023

Download 22, 2023 • 248KB