Major League Baseball Properties, Inc. v. Corporación de Televisión y Microonda Rafa, S.A.

At a glance

Parties

Major League Baseball Properties, Inc. (MLB) v. Corporación de Televisión y Microonda Rafa, S.A. (Telemicro)

Case no.

No. 1:19-cv-08669-MKV (S.D.N.Y.)

Court

U.S. District Court, Southern District of New York (Judge Mary Kay Vyskocil)

Underlying award(s)

Partial Final Award and Final Award, AAA Case Number 01-17-0007-5412 (sole arbitrator Stephen Strick)

Forum and rules

Petition to confirm under 9 U.S.C. § 207 and the New York Convention; underlying arbitration administered by the AAA under its Commercial Arbitration Rules

Treaty

New York Convention (Articles III, V(1)(d))

Sector

Sports broadcasting rights

Outcome

Summary judgment granted to MLB and the Final Award confirmed (14 September 2020).

The dispute

MLB licensed Telemicro, a media broadcast company, to broadcast MLB content in the Dominican Republic for the 2016–2018 seasons. Telemicro missed payments for its broadcast rights, and MLB terminated the contract in 2017. MLB then started AAA arbitration and won a Partial Final Award and a Final Award, which Telemicro had not paid. MLB petitioned the court to confirm the Final Award. Telemicro opposed on two grounds: the tribunal was not properly constituted because the arbitrator was appointed without its input (New York Convention Article V(1)(d)), and the arbitrator showed manifest disregard of the law in awarding attorneys' fees.

Key holdings

1. Summary judgment was appropriate because no material fact was in dispute. Whether the tribunal was properly constituted is a legal conclusion drawn from undisputed facts. Telemicro identified no disputed fact about the fee award. p. 5
2. The arbitrator was appointed in accordance with the parties' agreement. The contract adopted the AAA Commercial Arbitration Rules, and under those Rules a party that fails to return the ranking list is deemed to accept every name on it. Telemicro did not return its list, and the AAA appointed the arbitrator. p. 5
3. The due process objection failed and came too late. Telemicro waited until the day the list was due to seek a stay. It ignored the AAA's notice that the deadline still stood. After the stay was denied, it never objected to the appointment within the arbitration, and failing to object in time bars a later challenge to how the arbitrator was chosen. p. 6
4. The fee award did not manifestly disregard the law. It rested on a contract clause obliging Telemicro to reimburse any attorneys' fees and all costs MLB incurred in connection with the breach, not on a prevailing-party clause. Telemicro's success in defending one claim therefore did not bar an award of all fees. p. 7
5. The arbitrator was entitled to review MLB's unredacted invoices in camera because of attorney-client privilege concerns. Courts often review billing records in camera when they fix fee awards. pp. 7–8

Procedural history

1. 2017MLB terminates the broadcast contract after Telemicro fails to make payments.
2. 18 December 2017MLB files its demand for arbitration with the AAA.
3. 23 April 2018Telemicro writes to the AAA and asks a New York state court for a stay. It does not submit its arbitrator ranking list, which is due that day.
4. 24 April 2018The AAA refuses the stay request and treats Telemicro's failure to return a list as acceptance of every name on it.
5. 26 April 2018The AAA appoints Stephen Strick as arbitrator. The New York Supreme Court later denies Telemicro's request for a stay.
6. After more than six months of proceedings, the arbitrator issues a Partial Final Award and then a Final Award in favour of MLB.
7. 17 January 2020MLB moves for summary judgment confirming the award.
8. 14 September 2020The court grants summary judgment and confirms the Final Award.

Tribunal, counsel and experts

Decided by

• Mary Kay Vyskocil Judge, U.S. District Court, Southern District of New York

For the claimant

Steven G. Kobre

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Keywords

• New York Convention
• Article V(1)(d)
• confirmation of award
• enforcement
• Major League Baseball
• MLB
• Telemicro
• broadcasting rights
• Dominican Republic
• AAA Commercial Arbitration Rules
• arbitrator appointment
• composition of tribunal
• waiver of objection
• manifest disregard of the law
• attorneys' fees
• in camera review
• Federal Arbitration Act § 207
• summary judgment

Summary generated with AI from the published documents — refer to the award for the authoritative text.