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Technologists, Inc. v. Mir's Limited

July 27, 2010

TECHNOLOGISTS, INC., PETITIONER,
v.
MIR'S LIMITED, RESPONDENT.



The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge

MEMORANDUM OPINION

This matter comes before the Court on review of an arbitration award pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-14. Petitioner Technologists, Inc. ("Technologists") and Respondent Mir's Limited ("Mir's") arbitrated a dispute before the International Chamber of Commerce International Court of Arbitration, and on May 4, 2010, the arbitrator issued an award to Mir's in the amount of $51,450 plus interest. On July 20, 2009, Technologists filed a Petition to Vacate Arbitration Award ("Petition to Vacate") in this Court. After Mir's failed to respond to the Petition to Vacate and an order to show cause, this Court entered a final order granting the Petition to Vacate as conceded. See Order (Sept. 18, 2009), Docket No. [7]. On October 30, 2009, Mir's entered an appearance and filed a [12] Motion to Vacate the September 18, 2009 Order of the District Court for Lack of Personal and Subject Matter Jurisdiction, Inter. Alia. Pursuant to F.R.C.P. 60 ("Rule 60(b) Motion"). On the same date, Mir's filed a [9] Cross-Petition to Confirm Arbitration Award ("Cross-Petition to Confirm"). Technologists filed an opposition to Mir's Rule 60(b) Motion, to which Mir's filed a reply, and Technologists filed a surreply. Mir's filed a [19] Motion to Strike Technologists' Surreply or, in the Alternative, to Allow Mir's Response to the Surreply, to which Technologists filed an opposition, and Mir's filed a reply. Technologists also filed a [14] Motion to Strike Mir's Cross-Petition to Confirm Arbitration Award, to which Mir's filed an opposition. The parties' motions are now ripe for decision. For the reasons explained below, the Court shall GRANT Mir's' Rule 60(b) Motion, DENY Mir's' Motion to Strike Technologists' Surreply, GRANT Mir's' Alternative Motion to Allow Mir's' Response to the Surreply, and DENY Technologists' Motion to Strike Mir's' Cross-Petition to Confirm. The Court shall HOLD IN ABEYANCE the Petition to Vacate and the Cross-Petition to Confirm pending further briefing from the parties.

I. BACKGROUND

Petitioner Technologists, Inc. is a company incorporated in Virginia with its headquarters in Rossyln, Virginia. See Petition to Vacate, Ex. F (Arbitral Award) at 2. Respondent Mir's Limited is incorporated under the laws of Afghanistan with its headquarters in Kabul, Afghanistan. Id. On May 19, 2005, the parties entered into a "Purchase Agreement for Bagrami Industrial Park Turnkey Powerplant and Accessories Between Technologists Inc. and Mir's Limited" (the "Purchase Agreement"). Id. at 6. Under the Purchase Agreement, Technologists purchased certain goods and services from Mir's for use in the design, engineering, installation, and commissioning of a turnkey power plant for the Bagrami Industrial Park project awarded by the U.S. Agency for International Development and Provincial Reconstruction Team CFC-A. Id. In or about May 2006, Mir's delivered the power plant, but Technologists failed to take delivery and possession of the power plant. Id. As a consequence, Mir's continued to maintain the power plant, particularly its diesel generators, so as to keep the power plant functional and not have its useful life reduced. Id. On April 4, 2007, Technologists expelled Mir's' personnel from the plant. Id. Mir's claims that it complied with all material aspects of the Purchase Agreement and that Technologists breached the Purchase Agreement by failing to take delivery of the plant and failing to pay for power, water, safe storage, and guarding of equipment during the construction period. Id. at 7. Technologists claims that it paid all of Mir's' invoices and that it had no duty under the Purchase Agreement to take over the power plant until April 2007, when the power plant was completed. Id.

Pursuant to the Purchase Agreement, the parties arbitrated their contract dispute before the International Chamber of Commerce's International Court of Arbitration in Washington, D.C. See Mir's Limited v. Technologists, Inc., Case No. 15208/JEM/GZ (Int'l Chamber of Commerce, Int'l Ct. of Arb.) On June 9, 2008, the parties agreed upon certain Terms of Reference that limited the scope of the arbitration. See Pet. to Vacate ¶ 4 & Ex. A ("Terms of Reference"). The parties filed pre-hearing briefs, and a hearing was held by the sole arbitrator on January 12 and 13, 2009. Id. ¶¶ 5-6. One issue that arose during the briefing and hearing was whether the parties had created a second contract governing the guarding, operation, and maintenance of the power plant. Id. ¶¶ 5, 7. In a post-hearing order, the arbitrator requested briefing on, inter alia, the issue of the arbitral tribunal's jurisdiction to hear a dispute based on a separate contract. Id. ¶ 8 & Ex. D (Post-Hearing Order). The parties submitted additional briefs, with Technologists arguing that the arbitral tribunal lacked jurisdiction over any purported second agreement. Id. ¶ 9 & Ex. E (Post-Hearing briefs).

On May 4, 2009, the arbitral tribunal issued its final award ("Arbitral Award"). See Pet. to Vacate ¶ 10 & Ex. F (Arbitral Award). The arbitrator found that Technologists did not breach any obligation under the Purchase Agreement to pay for water, power, storage, and related items during the construction of the power plant. See Pet. ¶ 11; Arbitral Award at 13-15. However, the arbitrator found that Technologists had entered into a new agreement with Mir's to operate, maintain, and guard the plant after delivery and that Technologists owed Mir's money pursuant to this new contract. See Pet. ¶¶ 12, 14; Arbitral Award at 21-26. The arbitrator also found that it had jurisdiction to adjudicate the claim pertaining to the new contract because it was interrelated with the Purchase Agreement. Pet. ¶ 13; Arbitral Award at 16-18. The arbitrator awarded Mir's $51,450, with post-judgment interest at a rate of three percent per year. See Arbitral Award at 28-29.

Technologists filed its Petition to Vacate Arbitration Award in this Court on July 20, 2009. See Docket No. [1]. In its Petition to Vacate, Technologists argues that the parties never agreed to arbitrate the purported "second contract" and therefore the arbitrator lacked jurisdiction to enter its award. On August 13, 2009, Technologists filed a Certificate of Service indicating that a copy of the Petition to Vacate, the Notice of Petition to Vacate, the corporate disclosure form required by Local Civil Rule 7.1, and all accompanying exhibits were served by certified mail, return receipt requested, on Geoffrey J. Hill, Esq., Mir's' counsel of record in the arbitration proceeding, at his address in New Jersey. See Certificate of Service (Aug. 13, 2009), Docket No. [5]. The Certificate of Service indicated that a copy of the return receipt, dated July 25, 2009, was signed and return to counsel for Technologists on or about July 29, 2009.

On August 21, 2009, Mr. Hill sent an email to counsel for Technologists confirming that he had received the Petition to Vacate and accompanying documents. See Pet'r's Opp'n to Rule 60(b) Mot., Ex. A (Aff. of Matthew J. Pavlides, Esq.) ¶ 4. Mr. Hill inquired about the absence of a waiver of service form. Id. ¶ 5. On August 24, 2009, counsel for Technologists, Mr. Sean T. Morris, Esq., responded to Mr. Hill by email indicating that although he did not believe a waiver of service was necessary, he attached a draft waiver form as a courtesy. See Pet'r's Opp'n to Rule 60(b) Mot., Ex. B. (Aff. of Sean T. Morris, Esq.) ¶ 7. On August 28, 2009, Mr. Morris sent a letter to Mr. Hill with a waiver of service form and requested that he execute and return the waiver so that Mr. Morris could file it with the Court. See id. ¶ 8 & Ex. B-4 (Aug. 28, 2009 Letter).

On September 3, 2009, the Court issued an Order to Mir's to show cause why it had failed to respond to Technologists' Petition to Vacate, informing Mir's that it would treat the Petition as conceded if no response was filed by September 14, 2009. See Order (Sept. 3, 2009), Docket No. [6]. The Court directed that the Order be mailed to Mr. Hill. No response was filed by Mir's. Accordingly, on September 18, 2009, the Court issued a final order granting the Petition to Vacate as conceded, vacating the Arbitral Award and dismissing the case. See Order (Sept. 18, 2009), Docket No. [7]. Mr. Hill contends that he did not receive a copy of the Court's order of September 3, 2009. See Resp.'s Br. Supp. Rule 60(b) Mot., Aff. of Geoffrey J. Hill, Esq. ¶¶ 18-19.

On September 28, 2009, Mr. Hill returned the executed waiver of service form to Mr. Morris, noting that the deadline to respond to the Petition to Vacate would be October 30, 2009. See Resp.'s Br. Supp. Rule 60(b) Mot., Aff. of Geoffrey J. Hill, Esq., Ex. 1 (Sept. 28, 2009 Letter). Technologists did not file the waiver of service form with the Court, which had already closed the case after the final order of dismissal. On October 30, 2009, Mir's filed its Rule 60(b) Motion to vacate the Court's final order for lack of jurisdiction and its Cross-Petition to Confirm.

II. LEGAL BACKGROUND

The Federal Arbitration Act provides that "[a] written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. In Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983), the Supreme Court recognized the FAA as "a congressional declaration of a liberal federal policy favoring arbitration agreements." Id. at 24. Accordingly, the FAA provides for limited judicial review of arbitration awards. Pursuant to § 9 of the FAA, any party to an arbitration may apply to a federal district court for an order confirming the award, and "the court must grant such an order unless the award is vacated, modified, or corrected as prescribed in sections 10 and 11 of [the FAA]." 9 U.S.C. § 9. Section 10 provides that a district court may, upon application by any party, make an order vacating an arbitration award in the following circumstances:

(1) where the award was procured by corruption, fraud, or undue means;

(2) where there was evidence partiality or corruption in the ...


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