MARCIA MORALES HOWARD, District Judge.
Plaintiff APR Energy, LLC (APR) develops and operates energy-generating plants and provides electrical power to retailers or end-consumers of electric power. See Services Agreement at 1 (Doc. 1-1; Services Agreement). Wishing to establish and operate a thermal power plant project in Libya, APR entered into the Services Agreement with Defendant First Investment Group Corporation (FIGCorp) and FIGCorp's subsidiary Defendant First Engineering Group (FEG) (collectively, FIG/FEG or Defendants) on January 30, 2013.
On March 31, 2014, Defendants' counsel wrote to APR regarding APR's alleged failure to pay Defendants in breach of the Services Agreement (Doc. 1-2; March 31, 2014 Letter). The letter states that Defendants instructed their counsel to commence arbitration proceedings in accordance with Clause
Id. at 6.
APR initiated the instant action on May 19, 2014, by filing a Complaint in which it alleges that Defendants breached the parties' Services Agreement through FEG's substandard and unsatisfactory performance of the agreed-upon consulting services. Complaint ¶ 14. APR acknowledges that Defendants advised APR they intended to commence arbitration proceedings as required by the Services Agreement due to APR's non-payment, but also complains that Defendants threatened to initiate litigation in Libya, seeking an order to prevent any further payment to APR by GECOL. Id. ¶ 16. Additionally, APR asserts that Defendants had not commenced arbitration proceedings, had no intent to do so, and instead intend to initiate legal proceedings in Libya, which APR alleges would be prohibited by the Services Agreement. Id. ¶¶ 17-20. In conjunction with the Complaint, APR filed the Motion in which it requests that the Court "(a) enter an Order compelling the Defendants to submit the dispute which Defendants have threatened to litigate in Libya to binding arbitration, as agreed upon in the Agreement, and (b) enjoin the Defendants from pursuing" legal proceedings in Libya. Motion ¶ 13; see also Complaint ¶ 22.
On May 22, 2014, the Court entered an order setting a briefing schedule and a hearing for consideration of the Motion for June 17, 2014 (Doc. 7). On or about May 22, 2014, Defendants initiated an ICC arbitration against APR, Response ¶ 10,
Defendants' June 2, 2014 Letter prompted APR to file APR's Emergency Motion for Temporary Restraining Order And/Or Preliminary Injunction with Notice to Defendants (Doc. 12; Motion for TRO). In the Motion for TRO, APR sought a temporary restraining order from this Court "to preclude the Defendants from taking any action pursuant to the Libyan proceedings,
On June 6, 2014, Defendants filed their Response to the Motion, and on June 11, 2014, APR filed the Reply. However, on June 16, 2014, APR and Defendants filed the Parties' Joint Stipulation and Agreed Motion for Postponement of Proceedings in Aid of Mediation (Doc. 17; Joint Stipulation), in which they informed the Court that they had agreed to mediate the dispute in London, England. Joint Stipulation at 1. As such, the parties requested that the Court postpone the June 17, 2014 hearing for thirty days. Id. at 2. Thereafter, the Court entered an Order staying the case until July 16, 2014 (Doc. 18).
On July 16, 2014, APR notified the Court that the parties' mediation was unsuccessful, and requested that the Court reset the previously-scheduled hearing. See APR's Request to Reset Previously-Scheduled Hearing on its Motion for Preliminary Injunction in Light of Mediation Impasse at 2 (Doc. 19; Request to Reset). In light of APR's request, the Court held a Telephonic Status Conference on July 22, 2014, during which the parties consented to the entry of a preliminary injunction order compelling arbitration pursuant to the terms of the Services Agreement (Doc. 22; 7/22/2014 Clerk's Minutes). Accordingly, the Court entered an order granting preliminary injunctive relief to the extent of the parties' consent and directing the parties to arbitrate all covered claims (Doc. 23; July 22, 2014 Order). The Court then took the remaining issues, whether the Libyan Proceeding falls within the exception to the parties' agreement to arbitrate and APR's request for an anti-suit injunction, under advisement and set the matter for a hearing to be held on August 21, 2014, at 2:00 p.m. (August 21st Hearing). Id. at 2. At the hearing held on August 21, 2014, the parties agreed that the Court should render final judgment in this case based on the record presented as of the date of the hearing.
On September 29, 2014, the Court entered an order resolving the merits of this action and directing that judgment be entered in favor of Plaintiff and against Defendants. See September 29, 2014 Order at 38-39 (Doc. 33; September 29, 2014 Order). On October 16, 2014, Defendants filed the Motion for Reconsideration in which they requested that the Court reconsider the September 29, 2014 Order, or alternatively, stay the effect of the September 29, 2014 Order pending appeal. See Motion for Reconsideration at 11-12. The Court thereafter entered an order granting Defendants' Motion for Reconsideration to the extent that the Court determined it must reconsider Plaintiff's request for an anti-suit injunction but denying the Motion for Reconsideration in all other respects. See Order on Reconsideration at 32 (Doc. 56; February 20, 2015 Order). In the Order on Reconsideration, the Court determined that "the Court's prior analysis of APR's entitlement to an anti-suit injunction was based on a manifest error of fact which must be corrected." Id. at 32. Specifically,
APR contends that "the Libyan Proceeding constitutes a direct breach" of Clause 10 (the arbitration clause) of the Services Agreement. Motion ¶ 8; see also Reply at 2-8. As such, APR argues that the Court should enter an order compelling Defendants to arbitrate all of the parties' disputes, including Defendants' request for pre judgment relief, and "issue an anti-suit injunction requiring the Defendants to immediately cease, desist and abandon the Libyan Proceeding because the parties have agreed that any and all disputes arising from the Agreement should be resolved by way of binding arbitration." Motion ¶ 31; see also Reply 8-11.
APR argues that an anti-suit injunction is proper because both of the threshold requirements
According to Defendants' Response, APR is not entitled to an anti-suit injunction because APR's request rests on the "faulty premise that the Libyan action is intended to resolve this matter on the merits, in avoidance of arbitration" where, in actuality, "[t]he Libyan action was merely for an injunction to secure the funds that are due and payable" to Defendants under the Services Agreement. Response at 4-5. Defendants argue that APR's request for an anti-suit injunction should be denied because the Libyan Proceeding is "expressly authorized to be taken under Section 10(h) of the Service[s] Agreement." Id. at 1, 5, 6. Additionally,
Additionally, in the Supplemental Response, Defendants raise several affirmative defenses. Defendants contend that they have satisfied the prerequisites under Florida Statute section 77.031 to obtain a pre judgment writ of garnishment against APR in Libya, but argue that APR cannot establish the prerequisites to injunctive relief under Clause 10(h) of the Services Agreement because (1) APR has not demonstrated that it will be imminently damaged by the Libyan Proceeding in that APR's claims are tied to monetary relief, and (2) the relief APR seeks would effectively resolve the merits and substance of the Libyan Proceeding. Supplemental Response at 2-4. Next, Defendants contend that because APR has not initiated arbitration itself, APR has unclean hands, and thus "should be estopped from demanding the entry of an order to effectively compel the involuntary dismissal of the Libyan proceeding." Id. at 4-5. Further, Defendants argue that because FIGCorp and FEG have commenced arbitration, the Court's July 22, 2014 Order, which orders the parties to arbitrate, "should be vacated and the matter determined moot." Id. at 5. Defendants also assert that APR has admitted that it has received payments from GECOL but that APR has not remitted any money to Defendants, so APR has breached the Services Agreement and should not be allowed to pursue remedies under the Services Agreement. Id. at 5-6. Last, Defendants argue that if APR's request for an anti-suit injunction is granted, APR should be required to post a bond, despite the presence of a one-way bond waiver in APR's favor in the Services Agreement. Id. at 6-7.
Belatedly, in the Motion for Reconsideration, Defendants argue that APR has no right to payment from GECOL because another APR entity, not APR itself, is the true party to the GECOL contract. See Motion for Reconsideration at 2, 6. Thus, argue Defendants, APR suffers no harm, much less irreparable harm, by virtue of the Libyan Proceeding and is not entitled to an anti-suit injunction. See id. at 7-8. Also, because the record presents no evidence regarding the relationship between APR and the APR entity that actually holds the contract with GECOL, Defendants appear to suggest that APR cannot satisfy the identity of parties requirement. See id. at 6-7. In responding to the Motion for Reconsideration, APR states that GECOL contracted with a related APR entity, APR Energy Holdings, Ltd., which is the party enjoined in the Libyan Proceeding. See Reconsideration Response at 2. APR contends that it is entitled to an anti-suit injunction regardless of which APR entity is named in the GECOL contract and regardless of whether a different APR entity is named in the Libyan Proceeding. See id. at 2-4, 13-14. In making these arguments, both APR and Defendants appear to believe that because the sums withheld by GECOL were actually owed to another APR entity, that entity is a party to the Libyan Proceeding. Thus, in considering whether APR has satisfied the requirements for an anti-suit injunction, the Court will consider this possibility in addition to the arguments presented prior to the August 21st Hearing.
In Count 1 of the Complaint, APR seeks an order compelling Defendants "to submit (1) all disputes between the parties under the Agreement, and (2) all matters raised or asserted in the Libyan Proceeding[ to binding Arbitration in accordance with the terms of the Agreement, and also enter an Order enjoining the Defendants from pursuing the Libyan Proceeding[] or any similar proceeding, and providing Plaintiff all other relief deemed just, proper, and equitable." Complaint ¶ 28. At the Court's July 22, 2014 Telephonic Status Conference, the parties agreed to preliminary injunctive relief ordering the parties to arbitrate their dispute. As such, the Court's July 22, 2014 Order granted the Motion to the extent the parties were directed to submit all covered claims to arbitration. Indeed, Defendants have initiated an ICC arbitration against APR. Nevertheless, Defendants maintain that the claim asserted in the Libyan Proceeding is not subject to arbitration. As such, the Court must determine whether the Services Agreement requires the claim raised in the Libyan Proceeding to be submitted to arbitration.
The arbitration clause in the Services Agreement is subject to enforcement pursuant to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, opened for signature June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 3 (the "Convention"), and its implementing legislation, 9 U.S.C. §§ 202-208 (the "Convention Act"). In deciding a motion to compel arbitration under the Convention Act, a district court must order arbitration unless (1) the four jurisdictional prerequisites are not met, or (2) one of the Convention's affirmative defenses applies.
Bautista, 396 F.3d at 1294 n. 7. Here, there is no dispute that the jurisdictional prerequisites are met,
Defendants argue that the Libyan Proceeding is not subject to the arbitration obligation because it is "merely for an injunction to secure the funds that are due and payable to FIG/FEG under the Service Agreement." Response at 5. Indeed, they contend that that the Libyan Proceeding is "expressly authorized to be undertaken under Section 10(h) of the Service Agreement." Id. Additionally, Defendants cite to Florida law governing pre-judgment writs of garnishment
Paragraph 10 of the Services Agreement states in pertinent part, "any dispute which arises under this Agreement shall be resolved by submittal to binding arbitration..." Services Agreement ¶ 10 (emphasis supplied). Nevertheless, Clause 10(h) provides an exception to the arbitration obligation in that it permits either party to seek a preliminary injunction "if necessary to obtain legal measures intended to protect their rights prior to or during the arbitration" so long as "such judicial relief ... is limited to that which is required to prevent imminent damage to a party" and "does not resolve the merits or substance of such Dispute." Id. ¶ 10(h). This provision, like the remainder of the Services Agreement, is governed by, and must be interpreted in accordance with, Florida law. Id. ¶¶ 10(b), 24. Upon consideration of the record and the applicable authority, the Court concludes that the relief sought by Defendants in the Libyan Proceeding is not necessary to protect their rights under applicable law nor limited to that which is "required to prevent imminent damage."
Preliminarily, the Court observes that the Libyan Proceeding is not necessary to obtain legal measures intended to protect Defendants' rights prior to or during the arbitration. This is so because the arbitration agreement, which covers "any dispute which arises under [the Services] Agreement[,]" is broad enough to encompass the preliminary relief sought by Defendants in the Libyan Proceeding. See Telecom Italia, SpA v. Wholesale Telecom Corp., 248 F.3d 1109, 1114 (11th Cir.2001)
Moreover, it is settled Florida law that "[i]njunctive relief may not be used to enforce money damages, or to prevent any party from disposing of assets until an action at law for an alleged debt can be concluded." Hiles v. Auto Bahn Fed'n, Inc., 498 So.2d 997, 998 (Fla. 4th DCA 1986); see also Weinstein v. Aisenberg, 758 So.2d 705, 706 (Fla. 4th DCA 2000) (reversing trial court's grant of a temporary injunction to prevent defendants from withdrawing funds at two nonparty banks where the plaintiff had an adequate remedy at law in the form of money damages); Action Elec. & Repair, Inc. v. Batelli, 416 So.2d 888, 889 (Fla. 4th DCA 1982) (vacating trial court's grant of a temporary injunction because it amounted to use of injunctive relief as a substitute for a prejudgment attachment). Indeed, Florida's Third District Court of Appeal recited this "basic rule" in upholding a trial court's order dissolving a temporary injunction which prohibited the removal of funds from a bank pending the conclusion of the case. See Barbouti v. Lysandrou, 559 So.2d 648, 650 (Fla. 3d DCA 1990). In place of the temporary injunction, the trial court permitted the plaintiff to secure a "freeze" of the bank account pursuant to a pre judgment writ of garnishment under Florida Statute section 77.031. Id. at 649. In explaining the impropriety of the temporary injunction, the appellate court noted that "the relief attainable by the plaintiff through the use of the injunction ... was as a practical matter fully provided by the use of the writ of garnishment[.]" Id. at 650. Similarly, the Eleventh Circuit has emphasized that "preliminary injunctive relief freezing a defendant's assets in order to establish a fund with which to satisfy a potential judgment for money damages is simply not an appropriate exercise of a federal district court's authority." Rosen v. Cascade Ina, Inc., 21 F.3d 1520, 1530 (11th Cir.1994).
To the extent Defendants wish to obtain pre-judgment remedies in order to protect their rights during the arbitration, Defendants must seek these remedies under Florida law in arbitration. See Services Agreement ¶ 10 ("Except as provided in Section 15[
The Court next addresses APR's request for an anti-suit injunction. "[F]ederal courts have some power to enjoin foreign suits by persons subject to federal court jurisdiction." Canon Latin Am., Inc. v. Lantech (CR), S.A., 508 F.3d 597, 601 (11th Cir.2007). However, a district court may issue an anti-suit injunction only if two "threshold requirements" are met: "(1) the parties are the same in both [the foreign and domestic lawsuits],' and (2) `resolution of the case before the enjoining court is dispositive of the action to be enjoined.'" Id. (quoting Paramedics Electromedicina Comercial, Ltda. v. GE Med. Sys. Info. Techs., Inc., 369 F.3d 645, 652 (2d Cir.2004) (alteration in original)); see also S.E.C. v. Pension Fund of Am., L.C., 396 Fed.Appx. 577, 580-82 (11th Cir. 2010) (vacating the district court's contempt order "[t]o the extent it rested upon [the] violation of the anti-suit injunction" because "neither of the threshold requirements for the issuance of an anti-suit injunction [had] been met"). Once this "gatekeeping inquiry" is satisfied, the Court can proceed to "consider additional factors to determine whether an injunction is appropriate." Canon Latin Am., 508 F.3d at 601; see also Paramedics, 369 F.3d at 654 ("Beyond the threshold criteria ..., other considerations include whether the foreign proceeding threatens a strong public policy or the jurisdiction of the domestic forum."); Quaak v. Klynveld Peat Marwick Goerdeler Bedriffsrevisoren, 361 F.3d 11, 18 (1st Cir.2004) (stating that in "consider[ing] all the facts and circumstances in order to decide whether an injunction is proper ... considerations of international comity must be given substantial weight").
Notably, "[t]he suitability of an anti-suit injunction involves different considerations from the suitability of other preliminary injunctions." E. & J. Gallo Winery v. Andina Licores S.A., 446 F.3d 984, 990 (9th Cir.2006); see also Karaha Bodas Co. v. Perusahaan Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 364 (5th Cir.2003) ("Although both the district court and the parties discussed all four prerequisites to the issuance of a traditional preliminary injunction, the suitability of such relief ultimately depends on considerations unique to anti[-]suit injunctions."); but see Barwie's Coffee & Tea Co., Inc. v. Am. Mattress Co., No. 6:07-cv-1664-Orl-19UAM, 2008 WL 191019, at *2 (M.D.Fla. Jan. 22, 2008) (discussing the four traditional prerequisites to granting a preliminary injunction in conjunction with the requirements for an anti-suit injunction). Indeed, the Fifth Circuit has stated that "[t]o the extent the traditional preliminary injunction test is appropriate," the court "only need address whether [the plaintiff] showed a significant likelihood of success on the merits" where the merits are "whether [the plaintiff] has demonstrated that the factors specific to an anti[-]suit injunction weigh in favor of granting that injunction here." Karaha Bodas Co., 335 F.3d at 364 n. 19. As such, the Court will not address the traditional elements for injunctive relief, but will instead consider the analysis unique to an anti-suit injunction. Nevertheless, the Court is mindful that because an anti-suit injunction effectively restricts the jurisdiction of a foreign court, such an injunction should be "used sparingly" and granted "only with care and great restraint." China Trade & Dev. Corp. v. M.V. Choong Yong, 837 F.2d 33, 35-36 (2d Cir.1987).
As the moving party, APR bears the burden of clearly establishing
With regard to the parties to the Libyan Proceeding, in the Response Defendants state "In the Libyan proceedings, APR, FEG, and GECOL are the parties. FIG is not party to the Libyan proceeding." Id. In addition, Defendants argue that APR cannot satisfy the identity of parties requirement because "GECOL is not a party to this case." Id. During the August 21st Hearing, counsel for APR expressed the belief that APR Energy PLC was the APR entity named in the Libyan Proceeding. Counsel explained that Defendants named a different APR entity because that entity was the one with the contract with GECOL. Nevertheless, he argued that APR and APR Energy PLC were essentially the same party sufficient to satisfy the identity of parties requirement. However, neither APR nor Defendants presented any evidence to support a finding that APR Energy PLC or any other APR entity was actually named in the Libyan Proceeding. Instead, in all of the briefing and evidence presented prior to the August 21st Hearing, both agreed that Plaintiff APR was named in both the Libyan and the instant proceeding. For the reasons explained at length in the Court's Order on Reconsideration, the Court has reviewed the record and concluded that the original contention of Defendants and APR was and continues to be correct and that the parties to the Libyan Proceeding are APR, FEG, and GECOL. Thus, the Court turns to Defendants' contention that APR is not entitled to an anti-suit injunction due to the absence of FIGCorp and the presence of GECOL in the Libyan Proceeding. Id. Additionally, the Court will address the significance of the fact that the Libyan court order has the effect of causing GECOL to withhold sums due to a separate APR entity.
In support of its request for injunctive relief, APR relies on the Second Circuit Court of Appeals' decision in Paramedics for the proposition that the first threshold factor does not require "absolute identity of the parties in both fora." Supplemental Memorandum at 4. In Paramedics, the Second Circuit affirmed a district court's order entering an anti-suit injunction despite the fact that the parties in the domestic suit and the foreign action were not identical. See Paramedics, 369 F.3d at 652. The parties to the domestic action were "Tecnimed" and "GEMS-IT," while the Brazilian lawsuit, which the district court enjoined, was brought by Tecnimed against GEMS-IT and a related company, GE Brasil. Id. at 648-49. In affirming the district court's order despite the addition of GE Brasil in the Brazilian lawsuit, the Second Circuit stated that "[t]he decisive point on this record is that GE Brasil is named in the Porto Alegre action chiefly on the basis of its aspects of identity with GEMS-IT." Id. at 652. Specifically, the court concluded that the facts that GEMSIT and GE Brasil were both part of the General Electric group of companies and that GEMS-IT held at least 70% of GE Brasil's capital supported the district court's "ruling that the parties to the two actions [were] thus sufficiently similar to satisfy the first threshold requirement[.]" Id.
The Eleventh Circuit Court of Appeals has not specifically addressed the question of whether parties who are not literally the same, nevertheless, may be sufficiently similar or effectively the same in order to satisfy the identity of parties requirement
In Pension Fund, the Eleventh Circuit considered the propriety of a district court's entry of an anti-suit injunction, and determined that the requirements for such an injunction had not been met. Id. at 582. With respect to the identity of parties, the court concluded that the record failed to show that the parties before the enjoining court were the same as those in the Costa Rican civil action. Id. at 580-81. In the case before the district court, the receivership estate claimant and the Pension Fund's court-appointed Receiver were the parties, but in the Costa Rican action, the receivership estate claimant and the Pension Fund's Regional Director were the parties. Id. at 581. The district court, relying on Paramedics, treated the Pension Fund's Receiver and the Pension Fund's Regional Director as one in the same based on its conclusion that the receivership claimant sued the Pension Fund's Regional Director as a representative of the Pension Fund, and that under Costa Rican law, the Pension Fund receivership assets would be liable for any damages determined to be owed by the Pension Fund's Regional Director. Id.; S.E.C. v. Pension Fund of Am., L.C., 613 F.Supp.2d 1341, 1345 (S.D.Fla.2009). On appeal, the Eleventh Circuit first observed that the Pension Fund's Receiver and the Pension Fund's Regional Director were "obviously not literally the same party." Pension Fund, 396 Fed.Appx. at 581. However, that did not conclude the court's analysis. Instead, the court next considered whether the evidence before the district court supported its conclusions that the parties were effectively the same. Ultimately the court determined that the record revealed no evidence that the receivership claimant sued the Pension Fund's Regional Director as a representative for the Pension Fund or that, under Costa Rican law, the receivership assets would be potentially liable for any damages ultimately awarded to the claimant against the Pension Fund's Regional Director. Id. As such, the court found that the district court's conclusions were not supported by the record and thus, the movant had failed to satisfy the identity of parties requirement.
It is noteworthy that in reaching its decision, the Eleventh Circuit did not reject or otherwise criticize the district court's reliance on Paramedics for the proposition that the identity of parties requirement could be satisfied even where the parties were not literally the same. Instead, the court specifically left open the question of whether the circumstances identified by the district court, "if supported by the record, would be enough to make the Receiver and [the Pension Fund's Regional Director] effectively the same party for the purpose of satisfying the first prerequisite to the issuance of an injunction barring foreign litigation." Id. Thus, the Pension Fund decision contemplates that even when parties to a domestic and foreign action are not "literally" the same, the parties still may be effectively the same for purposes of an anti-suit injunction. Indeed, the Court notes that in the earlier anti-suit injunction decision cited in Pension Fund, Canon Latin America, Inc., the Eleventh Circuit specifically relied on the Second Circuit's Paramedics decision in identifying the two threshold requirements for an anti-suit injunction. See Canon Latin Am., Inc., 508 F.3d at 601. As discussed above, in the Paramedics
Both FEG and FIGCorp are parties to the instant action but only FEG is named in the Libyan Proceeding. However, FIGCorp's absence from the Libyan Proceeding is not dispositive. FEG is a subsidiary of FIGCorp and both FEG and FIGCorp are parties to the Services Agreement. See Services Agreement at 1. Defendants conceded at the August 21st Hearing, that FEG and FIGCorp jointly serve as the Service Provider under the Services Agreement, and in their briefing before the Court, Defendants consistently refer to FEG and FIGCorp together as "FIG/FEG." See generally Response; Supplemental Response.
The injunction entered by the Libyan court has had the effect of causing GECOL to withhold payments due not directly to APR, but to the APR entity that entered into the contract with GECOL. While the Court does not view this result as altering the parties FEG actually named in the Libyan Proceeding, the parties appear to believe that it might. Thus, in an abundance of caution, and desiring to provide the parties with a complete resolution of all potential claims, the Court will assume that because GECOL withheld the sums due under the GECOL contract to some other APR entity, that entity is considered to be either the APR entity named by FEG or an additional APR entity that becomes a party to the Libyan Proceeding.
Regardless of whether the unidentified APR entity is considered the party named in the Libyan Proceeding or an additional party to the Libyan Proceeding, its presence in the Libyan Proceeding presents no barrier to APR's ability to satisfy the identity of parties requirement for obtaining an anti-suit injunction. While it is true that the record contains no evidence regarding the relationship between APR and the APR entity that contracted with GECOL, no such evidence is necessary for the Court to determine that APR and the APR entity in privity with GECOL are essentially the same for purposes of the anti-suit injunction analysis. FEG has a contract, the Services Agreement, with APR. FEG has no contract or other relationship with the unnamed APR entity. In the Libyan Application, FEG treats the party it has sued as being the same party indebted to
Dallas Aff. 113. She also acknowledges that the other APR entity contracted with GECOL and expresses concern over whether that entity will remit the money to APR and whether APR will still have money to pay Defendants upon entry of any judgment. See id. ¶ 9. The entire legal and factual basis for the relief requested in the Libyan Proceeding is the monetary obligation owed by APR to FEG under the Services Agreement. Thus, the evidence clearly establishes that if the unnamed APR entity is a party to the Libyan Proceeding by virtue of the fact that sums due it under the GECOL contract have been withheld, it is a party solely because Defendants treat it as one in the same as APR. In other words, if the unnamed APR entity against whom Defendants have no independent right is a party to the Libyan Proceeding, it is so based solely on its identity with APR and for purposes of the anti-suit injunction analysis, is essentially the same as APR.
The presence of GECOL in the Libyan Proceeding presents a different issue. APR contends that GECOL's presence in the Libyan Proceeding does not preclude the issuance of an anti-suit injunction because it is a "nominal, non-interested party." Supplemental Memorandum at 7-8.
Here, APR and FEG/FIGCorp are the primary parties to both the instant action and the Libyan Proceeding because they are the only parties to the underlying dispute which arises from the Services Agreement. Neither FEG nor APR have asserted substantive claims against GECOL in the Libyan Proceeding, and GECOL has not raised any substantive claims against any of the parties in this case. Instead, as noted by APR's Libyan counsel, "GE COL's presence is simply to facilitate payment to FEG should it prevail against APR." 6/10/2014 Shariha Decl. ¶ 4. By mandating that the parties in both the domestic and foreign actions be effectively the same, the first threshold requirement for an anti-suit injunction insures that a party to a foreign action is not unjustly barred from either defending a claim or obtaining relief. Here, as GECOL asserts no claim and defends no claim in the Libyan Proceeding, the issuance of an anti-suit injunction despite its presence threatens no injury to GECOL. To allow the presence of an additional party such as GECOL that neither adds nor detracts from the substance of the case to defeat an anti-suit injunction would elevate form over substance. Indeed, if the identity of parties requirement were interpreted so narrowly, a litigant could easily preempt an anti-suit injunction by the addition of any nonessential party. See Maroc Fruit Bd. S.A. v. M/V Almeda Star, 961 F.Supp.2d 362, 365 (D.Mass.2013) (finding that the "parties at the crux of this dispute" were parties to both proceedings and that "[t]o allow [the defendant] to avoid an injunction simply by adding an extra party would undermine the flexible approach [to the threshold requirements] taken by the First Circuit"); Storm LLC v. Telenor Mobile Commc'ns AS, No. 06 Civ. 13157(GEL), 2006 WL 3735657, at *5-6 (S.D.N.Y. Dec. 15, 2006) (finding sufficient similarity among the parties where the party seeking the anti-suit injunction was deliberately left out of the foreign actions).
In this action, since the real parties in interest here and in the Libyan Proceeding are effectively the same, APR and FEG/ FIGCorp, the undersigned concludes that APR has satisfied the first threshold requirement for an anti-suit injunction. See
APR has also satisfied the second threshold requirement for issuance of an anti-suit injunction — that the case before the enjoining court be dispositive of the action to be enjoined. For purposes of granting an anti-suit injunction "dispositive" means "to settle or finish the dispute." Canon Latin Am., 508 F.3d at 601 n. 8. APR argues that Defendants' legal action seeking pre judgment remedies in the Libyan Proceeding involves "issues that must be arbitrated and an action that determines the arbitrability of a claim/remedy/issue sought to be pursued in a foreign tribunal is the quintessential dispute where courts have consistently found that a determination of arbitrability is dispositive of the action to be enjoined." Supplemental Memorandum at 10. Defendants present no contrary argument with regard to this contention.
The Second Circuit considered the question of whether an order compelling arbitration would be dispositive of a parallel foreign `action in the Paramedics case. See 369 F.3d at 653. The court noted that "[t]he case before the enjoining court ... concern[ed] the arbitrability of the parties' claims," and as such, recognized that the question was "whether the ruling on arbitrability is dispositive of the [foreign] litigation, even though the underlying disputes are confided to the arbitral panel and will not be decided by the enjoining court." Id. The court determined that "the district court's judgment disposes of the [foreign] action because the [foreign] litigation concerns issues that, by virtue of the district court's judgment, are reserved to arbitration." Id.; see also Alstom Chile S.A. v. Mapfre Compania De Seguros Generales Chile S.A., No. 13 Civ. 2416(LTS)(DCF), 2013 WL 5863547, at *3 (S.D.N.Y. Oct. 31, 2013) ("As to the second threshold factor, `although this Court will not determine the outcome of the underlying dispute, an order by this Court compelling arbitration will result in a determination of the dispute in the arbitration.'").
In re Vivendi, 2009 WL 3859066, at *5 n. 10.
As discussed above, FEG's claim in the Libyan Proceeding is not a claim for preliminary injunctive relief which falls within the exception to the parties' arbitration agreement in Clause 10(h) of the Services Agreement. As such, FEG's claim for pre judgment remedies must be resolved, if at all, in arbitration. Because the Court has granted APR's motion to compel arbitration and has determined that the FEG's claim asserted in the Libyan Proceeding is arbitrable, disposition of this action will dispose of the Libyan Proceeding. See Paramedics, 369 F.3d at 653. Thus, APR has satisfied the second threshold requirement for obtaining an anti-suit injunction.
As APR has met its burden of satisfying the threshold requirements for issuance of an anti-suit injunction, the Court next considers whether additional, discretionary factors warrant such an injunction. See Canon Latin Am., Inc., 508 F.3d at 601. The Eleventh Circuit has not addressed what factors a district court should consider once the party seeking an anti-suit injunction has satisfied the gatekeeping inquiry. The First Circuit has described both a "liberal" and a "conservative" approach to this portion of a court's analysis. See Quaak, 361 F.3d at 17 (collecting cases). The Fifth and Ninth, and likely the Seventh, Circuits follow the liberal approach, under which "an international antiHsuit injunction is appropriate whenever there is a duplication of parties and issues and the court determines that the prosecution of simultaneous proceedings would frustrate the speedy and efficient determination of the case." Id. These courts "tend to define [the interest in considerations of international comity] in a relatively narrow manner" and "assign it only modest weight." Id. In contrast, the Second, Third, Sixth, and D.C. Circuits apply a "conservative approach" under which "critical questions anent the issuance of an international anti[-]suit injunction are whether the foreign action either imperils the jurisdiction of the forum court or threatens some strong national policy." Id. The First Circuit opined that the conservative approach "affords appreciably greater weight to considerations of international comity." Id. Nevertheless, that court, although rejecting the liberal approach, declined to adopt the precise restrictive construction of the conservative approach. See id. at 18. Instead, the court instructed that courts consider not only preservation of jurisdiction and protection of important national policies, but also any other equitable considerations surrounding a particular request for an anti-suit injunction. Id. at 18-19.
Under any of these approaches, discretionary considerations favor the issuance of an anti-suit injunction in the instant case. Under the most restrictive, the conservative approach, "`an anti-suit injunction will issue to preclude participation in the litigation only when the strongest equitable factors favor its use,' and the granting of an injunction depends
Here, Defendants' claim asserted in the Libyan Proceeding does not simply preserve the status quo but actually sidesteps the requirement that FEG/FIGCorp arbitrate any request for pre-judgment relief. Importantly, under the Services Agreement and the Convention Act, if Defendants wish to pursue pre-judgment remedies against APR, Defendants are required to seek this relief in an arbitration in Florida and applying Florida law. Thus, although Defendants have filed an application for arbitration with the ICC, their refusal to arbitrate the claim for pre-judgment relief brought in the Libyan Proceeding threatens a strong public policy of this forum.
Additionally, "[c]ourts have a duty to protect their legitimately conferred jurisdiction to the extent necessary to provide full justice to litigants." Laker Airways, 731 F.2d at 927. While anti-suit injunctions ordinarily "are not properly invoked to preempt parallel proceedings on the same in personam claim in foreign tribunals," id. at 915, "[t]he logical reciprocal of the parallel proceeding rule proves that there must be circumstances in which an anti[-]suit injunction is necessary to conserve the court's ability to reach a judgment." Id. at 929. As such, "where the foreign proceeding is not following a parallel track but attempts to carve out exclusive jurisdiction over concurrent actions, an injunction may be necessary to avoid the possibility of losing validly invoked jurisdiction." Id. at 930; see also Quaak, 361 F.3d at 19 (rebutting the presumption against the issuance of anti-suit injunctions involves, among other things, consideration of "whether [the two actions] are merely parallel or whether the foreign action is more properly classified as interdictory"). In the instant action, the Libyan Proceeding is not following a parallel track but is instead an attempt by
Pursuant to Rule 65(c), a court may issue a preliminary injunction "only if the movant gives security in an amount that the court considers proper to pay the costs and damages sustained by any party found to have been wrongfully enjoined or
Services Agreement ¶ 10(h). Nevertheless, Defendants argue that some Florida courts have declined to enforce such waivers
An injunction bond "is intended to afford security only for those damages, if any, that might be `proximately caused by the [wrongful] issuance of [an] injunction.'" Int'l Equity Invs., Inc. v. Opportunity Equity Partners Ltd., 441 F.Supp.2d 552, 565-66 (S.D.N.Y.2006) (alteration in original). Typically, a security bond is required when a court enters an injunction which prevents commercial, money-making activities. See Black Warrior Riverkeeper, Inc. v. U.S. Army Corps of Engineers, 297 F.R.D. 633, 634 (N.D.Ala.2014) (citing Zambelli Fireworks Mfg. Co. v. Wood, 592 F.3d 412, 426 (3d Cir.2010)). Here, the only damage the Defendants may suffer if the anti-suit injunction is wrongfully issued is that GECOL will have released to an APR entity funds Defendants seek to recover from APR. But if the Defendants prevail in the arbitration, they will still be entitled to recover funds from APR. Thus, the only potential for damages to Defendants would be if the arbitration judgment were ultimately uncollectible. Even if the Services Agreement did not include a bond waiver in favor of APR, under these circumstances, the Court would decline to require a bond. Indeed the Court sees no need to require APR to post an injunction bond solely to address Defendants' conclusory fears regarding the collectability of a future judgment against APR.
In light of the foregoing, the Court finds that APR's requests for an order compelling arbitration and for an anti-suit injunction are due to be granted. The claim asserted by Defendants in the Libyan Proceeding is subject to arbitration under the Services Agreement, and does not fall within the narrow exception of Section 10(h). Thus, to the extent Defendants wish to seek pre-judgment relief, they must seek that relief in arbitration, and APR's request to compel arbitration of this and all disputes arising from the Services Agreement is due to be granted. Further, although the parties to the instant action and the Libyan Proceeding are not literally identical, they are effectively the same for purposes of the first threshold requirement for an anti-suit injunction. And, because Defendants' claim in the Libyan Proceeding is subject to arbitration, and the Court is granting APR's request to compel arbitration, resolution of this case is dispositive of the Libyan Proceeding. Additionally, discretionary factors warrant entry of an anti-suit injunction, particularly given Defendants' attempt to evade arbitration by seeking pre judgment remedies in a foreign tribunal. Therefore, the Court will direct Defendants, their officers, agents, servants, employees, attorneys, and all others acting in concert with Defendants, to take all steps necessary to withdraw and cause to be dissolved the precautionary hold entered by the Libyan court on June 2, 2014, and the action on which it is premised, and enjoin Defendants from initiating any similar proceeding.
As noted above, with the consent of the parties, the Court consolidated the preliminary injunction hearing with the trial on the merits in this case, see supra n. 14, and at the hearing, the parties specifically agreed that the Court should enter judgment based on the current record. Accordingly, having found that Defendants are required to arbitrate all disputes arising under the Services Agreement, including the claim asserted in the Libyan Proceeding, and that an anti-suit injunction is warranted, the Court concludes that APR is entitled to the entry of Judgment in its favor as to Counts 1 and 3, and a permanent injunction. Pursuant to the foregoing, it is
FLA. STAT. § 77.031(2)-(3). FEG's Libyan Proceeding fails to satisfy the safeguards required by section 77.031: 1) FEG filed the action in Libya, not in the Middle District of Florida "where the action is pending"; 2) nothing was submitted to the Libyan court under oath; 3) FEG made no assertion that the Libyan Proceeding was not sought to injure APR or GECOL; 4) FEG failed to submit a sworn statement setting forth its belief that APR would not have property with which to satisfy an arbitration award or judgment; and 5) the Libyan court did not require FEG to post a bond.
Defendants also argue that because APR has not attempted to initiate arbitration, APR has unclean hands and should be estopped from demanding entry of an anti-suit injunction compelling dismissal of the Libyan Proceeding. Supplemental Response at 4-5.
Calloway v. Partners Nat'l Health Plans, 986 F.2d 446, 450-51 (11th Cir.1993) (internal citations omitted). Here, the fact that APR has not initiated arbitration is not directly related to APR's request for an anti-suit injunction because APR has not, itself, attempted to litigate an arbitrable claim in a foreign jurisdiction. Moreover, Defendants have failed to show any personal injury as a result of APR's failure to initiate arbitration.
Last, Defendants assert that because APR has admitted that it has been paid by GECOL, and APR has not remitted any of this money to FEG or FIGCorp, APR has breached the Services Agreement. Supplemental Response at 5-6. As such, Defendants contend that APR is not entitled to pursue remedies under the Services Agreement. Id. This argument reaches the merits of the parties' underlying breach of contract dispute and as such is reserved for arbitration. Thus, the Court declines to consider this defense.
