In Ballinasmalla Holdings Ltd. v. FCStone Merchant Services, LLC, petitioners Ballinasmalla Holdings Ltd. (BHL) and Corrib Oil Biofuels LLC (Corrib Oil) brought an action seeking vacatur of a final arbitration award (“Final Award”) issued in favor of the respondents for approximately $5 million. The respondents, FCStone Merchant Services LLC (FCStone) and INTL FCStone Markets LLC (INTL FCStone), counter-claimed for confirmation of the Final Award and an earlier Partial Final Award.

Corrib Oil is a company that distributes and manufactures oil and petrol products. Corrib Oil entered into a contract with FCStone to purchase soybean oil. BHL agreed to act as a guarantor for Corrib Oil on the contract. BHL also acted as a guarantor on payments owed by Corrib Oil Company Ltd. (Corrib Ltd.), who was not a party to the litigation, to INTL FCStone on swap transactions pursuant to an International Swap Dealers Association (ISDA) agreement. Both contracts had arbitration clauses. FCStone and INTL FCStone demanded arbitration after a dispute over soybean deliveries and payment on the ISDA agreement. INTL FCStone concurrently filed an action in New York state court against Corrib Ltd. seeking to collect on the debt from its ISDA agreement.

The arbitrator granted a partial award on the soybean contract dispute and dismissed the ISDA guaranty claim. FCStone and INTL FCStone asked the arbitrator to reinstate their ISDA guaranty claim and hold a hearing, and the arbitrator agreed. The arbitrator thereafter issued the Final Award, and the petitioners then filed their petition to vacate.

The court denied the petitioners’ motion to vacate the Final Award and granted the respondents’ motion to confirm. The court held that the arbitration award was final and definite. The court explained that for an arbitration award to be final and definite “the arbitrators must have decided not only the issue of liability … but also the issue of damages.” This was true here, despite the related case that was on appeal in the New York state court regarding a separate entity. The court also held that the arbitrator did not manifestly disregard the law governing stays. The court explained that a decision to stay the arbitration is a procedural matter governed under the procedural rules of the arbitration, i.e., the Commercial Rules of the AAA, and BHL did not make an argument that the arbitrator applied the wrong procedural rules or did so intentionally. Further, the court held that the petitioners did not demonstrate that the arbitrator acted in manifest disregard of the law on attorneys’ fees. There was no assertion that the arbitrator knew of a governing legal principle and refused to apply it or intentionally ignored it. Last, the court held that post-award statutory interest, costs, and fees were warranted.

Ballinasmalla Holdings Ltd. v. FCStone Merch. Servs., LLC, No. 1:18-cv-12254-PKC, 2019 WL 1569802 (S.D.N.Y. Apr. 11, 2019)