SDNY Denies Motion to Seal Petition to Confirm

On September 13, 2023, the Southern District of New York denied Petitioners Eletson Holdings, Inc. and Eletson Corporation's motion to file a redacted version of their petition to confirm an arbitration award that had previously been filed completely under seal. The Opinion explains the interests at stake when it comes to redacting information in award confirmation proceedings.

The Court emphasized that presumption of public access is of the highest in connection with petitions to confirm arbitration awards which are papers that "directly affect an adjudication," as they are treated like summary judgment motions in the Southern District. The Court explained that, as such, public access to the petition to confirm and supporting materials implicates "all of the interests that the Second Circuit has held justify the presumption of public access: 'the need for federal courts,' in the discharge of their substantive duties and 'particularly because they are independent,' 'to have a measure of accountability and for the public to have confidence in the administration of justice.'" Sealing a petition to confirm, explained the Court, "would leave the public unaware of the basis for the court's decision, frustrating the twin goals of 'educating the public about the operation of the courts ... and informing the public [about] matters of public concern.'"

The Court found no countervailing factors that would require it to depart from this reasoning. Most interestingly, the Court reminded the parties that, as to "information regarding the consideration to be paid," court have been "skeptical" to seal it, especially where it is highly relevant to the dispute and to the public's understanding of the decision.

The Court also explained that the arbitration award--the object and the "very heart" of such a dispute, cannot be filed under seal. The award is not "filed gratuitously," but the movant is required to include it with the petition.

The case is Eletson Holdings, Inc. et al. v. Levona Holdings Ltd., No. 23-cv-7331 (S.D.N.Y). The petitioners are represented by Colin Underwood and Louis Solomon of Reed Smith LLP, and there is no information yet as to the respondents' counsel.

The opinion can be downloaded below.

ABC v. DEF, 1_23-cv-07331, No. 10 (S.D.N.Y. Sep. 13, 2023).pdf

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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

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