Seaport Global Holdings LLC v. Petaquilla Minerals Ltd.

At a glance

Parties

Seaport Global Holdings LLC (United States) v. Petaquilla Minerals Ltd. (British Columbia, Canada)

Case no.

U.S. District Court, S.D.N.Y., No. 19 Civ. 9347 (ER)

Court

U.S. District Court for the Southern District of New York (Edgardo Ramos, U.S.D.J.)

Underlying award(s)

ICDR partial final award of 4 January 2019 and final award of 22 April 2019 (sole arbitrator Steven Skulnik, New York)

Forum and rules

Confirmation under FAA § 9, FAA Chapter 2 and the New York Convention; arbitration under the AAA Commercial Arbitration Rules administered by the ICDR

Treaty

Arbitration clause (Section 11) of the 28 March 2013 Engagement Agreement; New York Convention

Sector

Investment banking; mining bond offering

Outcome

Award confirmed on an unopposed petition (27 May 2020). Prejudgment interest and attorney's fees granted later (23 June 2020).

Amount

Judgment of USD 2,972,833.31 under the final award, plus prejudgment interest at 9% per annum from 22 April 2019 to 27 May 2020 (requested at USD 293,943.98), USD 5,010.35 in attorney's fees and costs, and post-judgment interest under 28 U.S.C. § 1961

The dispute

Seaport is a Delaware investment banking firm. Its predecessor, Global Hunter Securities LLC, agreed to act as adviser and placement agent for Petaquilla Minerals (PTQ), a British Columbia mining company with operations in Panama, to raise USD 150 million through a bond offering. Under the agreements of March 2012 and 28 March 2013, PTQ had to reimburse Seaport's expenses whether or not the bonds were sold. The offering failed. On 31 March 2015 Seaport brought an ICDR arbitration to recover its unreimbursed expenses, and PTQ filed counterclaims. The arbitrator found for Seaport. Seaport then asked the S.D.N.Y. to confirm the award. PTQ was served but never answered the petition.

Key holdings

1. The New York Convention applies because PTQ is a British Columbia corporation. Because the award was made in the United States, the Federal Arbitration Act (FAA) governs review, and that review is very limited. Order of 27 May 2020, p. 4
2. An unanswered petition to confirm is treated as an unopposed motion for summary judgment. The Court found nothing to suggest that the arbitrator acted arbitrarily, exceeded his jurisdiction or ruled contrary to law. It confirmed the award and entered judgment for USD 2,972,833.31, a figure that includes the CAD 64,263 converted at the rate on the filing date. Order of 27 May 2020, pp. 7–9
3. Attorney's fees are warranted when a party refuses to comply with an award without challenging it. However, Seaport's first request for USD 5,010.35 was denied without prejudice because it came with no billing records. Its request for prejudgment interest was also denied without prejudice, because Seaport gave no authority and no rate. Post-judgment interest under 28 U.S.C. § 1961 is mandatory and was granted. Order of 27 May 2020, pp. 8–9
4. In the Second Circuit there is a presumption in favour of prejudgment interest. Courts usually apply New York's statutory rate of 9% per annum from the date of the award to the date of confirmation. The Court granted interest at that rate from 22 April 2019 to 27 May 2020. Order of 23 June 2020, p. 3
5. The Court reviewed the billing records: 25.3 hours of attorney work at hourly rates from USD 110 to USD 325. It found the fees and costs reasonable and awarded the USD 5,010.35 requested. It also granted Seaport's motion to seal the billing records. Order of 23 June 2020, pp. 1, 4

Procedural history

1. 28 March 2013Engagement Agreement signed. Its Section 11 provides for arbitration in New York City before a single arbitrator under the AAA Commercial Arbitration Rules.
2. 31 March 2015Seaport files a Demand for Arbitration with the ICDR. PTQ answers and files counterclaims.
3. 4 January 2019Partial final award: all of PTQ's counterclaims are denied, and Seaport is awarded USD 759,956.28 and CAD 64,263.
4. 22 April 2019Final award in New York: Seaport is awarded a further USD 2,103,356.60 in attorney's fees and expenses and USD 61,269.20 in administrative fees and expenses.
5. 9 October 2019Seaport files its petition to confirm in the S.D.N.Y. PTQ is served on 23 December 2019 and does not answer.
6. 27 May 2020Order confirming the award. Requests for fees and prejudgment interest are denied without prejudice.
7. 23 June 2020Order granting prejudgment interest at 9% and USD 5,010.35 in fees and costs. The case is closed.

Tribunal, counsel and experts

Decided by

• Edgardo Ramos Judge, U.S. District Court for the Southern District of New York

For the claimant

Casey & Barnett LLC · Scialdone Law Firm, PLLC

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Keywords

• New York Convention
• confirmation of award
• Federal Arbitration Act
• 9 U.S.C. § 9
• unopposed petition
• summary judgment
• prejudgment interest
• nine percent CPLR rate
• post-judgment interest
• attorney's fees
• ICDR
• AAA Commercial Rules
• bond offering
• expense reimbursement
• mining
• Panama
• Petaquilla

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