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Ingeniera, Maquinaria Y Equipos De Colombia S.A. v. ATTS, Inc.

United States District Court, D. New Jersey

December 8, 2017

INGENIERIA, MAQUINARIA Y EQUIPOS DE COLOMBIA S.A., Petitioner,
v.
ATTS, INC., Respondent.

          George N. Styliades, Esq. LAW OFFICES OF GEORGE N. STYLIADES, Tiffany N. Compres, Esq. (pro hac vice) SANDLER, TRAVIS & ROSENBERG, P.A. Attorneys for Petitioner

          Jeffrey P. Resnick, Esq. SHERMAN, SILVERSTEIN, KOHL, ROSE & PODOLSKY, PC East Gate Corporate Center Attorney for Respondent

          OPINION

          JEROME B. SIMANDLE U.S. DISTRICT JUDGE

         I. INTRODUCTION

         This matter comes before the Court on Petitioner Ingenieria, Maquinaria Y Equipos de Colombia S.A.'s (“IMECOL”) motion to confirm an arbitration award. [Docket Item 3.] IMECOL and Respondent Aviation Technology & Turbine Service, Inc. (“ATTS”) were parties to a three-year exclusive agency agreement regarding the sale of commercial equipment in Colombia (the “Agency Agreement”). After ATTS failed to make commission payments to IMECOL, IMECOL initiated arbitration proceedings against ATTS before the Center for Mediation and Arbitration of the Chamber of Commerce of Cali (“CAC”) pursuant to Clause 14 of the Agency Agreement (the “Arbitration Clause”). ATTS conceded it was notified of the arbitration proceedings, but opted not to participate. Ultimately, CAC found in IMECOL's favor and determined that ATTS and a Colombian subsidiary, ATTS Energía, were jointly and severally liable to IMECOL for $289, 659.00. IMECOL now seeks to have this Court confirm the Colombian arbitration award.

         The principal issue presented by IMECOL's motion is whether the Arbitration Clause is enforceable against ATTS under the Inter-American Convention on International Commercial Arbitration (“the Convention”) and Federal Arbitration Act (“FAA”), in light of ATTS's allegations of breach of contract and fraudulent inducement. To that end, the Court must consider whether ATTS waived any potential defenses by choosing not to appear at the arbitration proceedings and whether Colombian bankruptcy proceedings against ATTS's subsidiary, ATTS Energía, affect this Court's ability to confirm the arbitration award in IMECOL's favor against ATTS alone. For the reasons that follow, the Court will grant IMECOL's motion.

         II. BACKGROUND

         A. Factual Background

         ATTS sources commercial equipment for engineering projects and, as is relevant to this lawsuit, is the exclusive agent of ISGEC John Thompson Ltd. (“IJT”), a global engineering company, for all of IJT's and its subsidiaries' projects in Latin America. (Declaration of Aseem Khan (“Khan Decl.”) at ¶¶ 2-5.) Some time before 2011, IMECOL contacted ATTS to express interest in selling IJT commercial boilers in Colombia. (Id. at ¶¶ 6-7.) According to ATTS, IMECOL “represented that all sales it made would be coordinated through ATTS and that IMECOL would have no contact with ITJ.” (Id. at ¶ 8.)

         On February 11, 2011, IMECOL and ATTS entered into the three-year Agency Agreement. (Id. at ¶ 10.) Under the Agency Agreement, the parties agreed that IMECOL would act as ATTS's sub-agent and would sell IJT products in Colombia. (Id.) The Agency Agreement provided, inter alia, that if a customer outside of Colombia came to IMECOL and wanted to purchase IJT products, IMECOL was to inform ATTS and await further instruction; that IMECOL was prohibited from having any direct contact with IJT; and that ATTS was to pay IMECOL commissions for sales contracts it secured. (Id. at ¶¶ 11-15; see generally Agency Agreement.) The Agency Agreement also included the mandatory Arbitration Clause:

If at any time a question, dispute, or difference arises between the parties in relation to or arising from this Agreement . . . the parties must submit the same to arbitration in accordance with the Commercial Code of Colombia. The adjudication of the arbitrators will be definitive and binding on the parties. The arbitration will take place at the Chamber of Commerce of Cali, Colombia.

(Id. at § 14.)

         According to ATTS, IMECOL made one sale of IJT products within Colombia, and ATTS made two of three commission payments to IMECOL. (Khan Decl. at ¶ 17.) ATTS further claims that, before it disbursed the third commission payment, it learned that IMECOL breached the terms of the Agency Agreement by contacting IJT directly and negotiating an agreement to be their agent in Latin America, and by contacting customers in Peru. (Id. at ¶¶ 17-20.) According to ATTS, IMECOL's conduct demonstrates it never intended to actually be ATTS's sub-agent and instead came to ATTS under false pretenses to obtain a connection to IJT. (Id. at ¶ 21.) ATTS subsequently “terminated” the Agency Agreement and refused to pay further commissions. (Id. at ¶ 26.)

         B. ...


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