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MED TRUST Handelsgesm.m.b.H. v. Intrinsyk Medical Devices, LLC

United States District Court, D. New Hampshire

September 13, 2019

MED TRUST Handelsges.m.b.H.
v.
Intrinsyk Medical Devices, LLC

          REPORT AND RECOMMENDATION

          Andrea K. Johnstone, United States Magistrate Judge.

         In April 2018, an arbitral tribunal in Vienna, Austria awarded Plaintiff over $110, 000, plus interest, costs and attorneys' fees, after finding that the defendant breached a contract between the parties. Plaintiff subsequently filed a petition (Doc. No. 1-5) to recognize and enforce the arbitral award in this court. See 9 U.S.C. § 201 (implementing Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958). The defendant has defaulted. Doc. No. 9. Plaintiff's unopposed motions for default judgment (Doc. No. 11) and attorneys' fees (Doc. Nos. 12 and 13) are before the undersigned magistrate judge for a report and recommendation. For the reasons that follow, the district judge should grant plaintiff's motion for default judgment.

         I. Standard of Review

         After default is entered and when, as here, the amount at issue is not a sum certain, “the party must apply to the court for a default judgment.” Fed.R.Civ.P. 55(b)(2); see also KPS & Assocs., Inc. v. Designs by FMC, Inc., 318 F.3d 1, 18-19 (1st Cir. 2003). “Although a defaulting party admits the factual basis of the claims asserted against it, the defaulting party does not admit the legal sufficiency of those claims.” 10 James Wm. Moore, Moore's Federal Practice § 55.32[1][b] (3d ed. 2013). Before entering default judgment, the court must determine whether “[t]he claimant [has] state[d] a legally valid claim for relief.” Id.; see also Ramos-Falcon v. Autoridad de Energia Electrica, 301 F.3d 1, 2 (1st Cir. 2002).

         II. Background

         By virtue of their default, defendants have admitted the following facts, as set forth in plaintiff's Petition. In September 2015, the parties entered into an International Distribution Agreement, (the “Agreement”) for defendant Intrinsyk's distribution of plaintiff Med Trust's diabetes management products within the United States and Canada. The Agreement included an arbitration clause pertaining to “all disputes arising out of” the Agreement. Any arbitration was to use the Rules of Arbitration and Conciliation of the International Arbitral Centre of the Austrian federal Economic Chamber in Vienna (the “Vienna Rules”).

         In December 2016, plaintiff's Austrian legal counsel requested, in writing, that the defendants pay outstanding bills $57, 660, stemming from an order in April 2016. The payment request included an annual interest charge of 8.58 percent, covering mid-September through mid-December 2016. The letter further informed defendant that Austrian legal counsel had been instructed by plaintiff to file a request for arbitration according to Agreement in the event defendant failed to comply.

         On January 24, 2017, having received no response to the previous month's latter, plaintiff's counsel filed a request for arbitration in the Vienna International Arbitral Center. The plaintiff sought an award of $110, 160. Counsel for the defendant timely responded to plaintiff's claim.

         The arbitration proceedings took place in January 2018. Both parties were represented by counsel. Each party had the opportunity to question every witness. The arbitrator issued a final award in plaintiff's favor in April 2018. The arbitrator found that the parties' actions formed a contract and that the defendant failed to pay for goods delivered by the plaintiff and accepted by defendant; and, that Defendant failed to perform its obligations under the Agreement. The arbitration award obligated the defendant to pay plaintiff $110, 160. The award consisted of two parts: 1) $57, 660 for the defendant's failure to pay for goods delivered as of November 12, 2016; and 2) $52, 500 for the defendant's failure to satisfy certain contractual obligations after January 13, 2017. Plaintiff was also awarded $20, 426.77 in costs and fees associated with the arbitration proceeding.[1] Despite two written requests from plaintiff's counsel, the defendant has not paid any part of the arbitration award.

         Plaintiff filed the instant action to enforce the arbitration award in March 2019. (Doc. No. 1). Although defendant was served, see Doc. Nos. 6-8, defendant did not answer or otherwise appear. The Clerk of Court entered default against the defendant on April 25, 2019. See Fed. R. Civ. P. 55(a); LR 55.1

         III. Discussion

         A. The Arbitration Award

         An arbitration provision in an international commercial contract such as the Agreement signed by the parties in this matter is governed by Chapter Two of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 201-208, which implemented the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“the Convention”), ratified by the United States, September 30, 1970, 21 U.S.T. 2517, T.I.A.S. No. 6997 (reprinted following 9 U.S.C. § 201). DiMercurio v. Sphere Drake Ins., PLC, 202 F.3d 71, 74 (1st Cir. 2000). The Convention is an international agreement designed “to encourage the recognition and enforcement of commercial arbitration agreements in international contracts and to unify the standards by which agreements to arbitrate are observed and arbitral awards are enforced.” Scherk v. Alberto-Culver Co., 417 U.S. 506, 520 n. 15 (1974). “A district court's duty to enforce arbitration clauses that so qualify cannot seriously be questioned.” InterGen v. Grina, 344 F.3d 134, 141 (1st Cir. 2003) (citing 9 U.S.C. § 201 (directing that the Convention “shall be enforced in United States courts”)).

         A proceeding to confirm an arbitration award “is intended to be summary.” Popular Sec., Inc. v. Colon,59 F.Supp.3d 316, 318 (D.P.R. 2014) (citing Taylor v. Nelson,788 F.2d 220, 225 (4th Cir. 1986)). “[R]eview of the arbitration award itself is ‘extremely narrow and exceedingly deferential.'” Bangor Gas Co., LLC v. H.Q. Energy Servs. (U.S.), Inc.,695 F.3d 181, 186 (1st Cir. 2012) (quoting Bull HN Info. Sys., Inc. v. Hutson,229 F.3d 321, 330 (1st Cir. 2000)). “The confirmation of an arbitration award finalizes the award and makes the award a judgment of the court.” Bacardi Int'l Ltd. v. Suarez & Co., Inc.,719 F.3d 1, 13 (1st Cir. 2013). “The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the ...


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