After the Southern District of New York confirmed an arbitration award in January 2023, petitioners and judgment creditors Telecom Business Solution and Latam Towers (represented by Michael N. Ungar, David A. Landman, Katherine M. Poldneff and Gregory C. Djordjevic of Ulmer & Berne LLP) and AMLQ (represented by Gregg L. Weiner, Ethan Fitzgerald, Daniel V. Ward and Katherine M. McDonald of Ropes & Gray LLP) asked the court on March 15, 2023, to impose sanctions on respondents and judgment debtors Terra, TBS and DT Holdings Inc. (represented by Jonathan D. Lupkin and Michael B. Smith of Lupkin PLLC and by Juan J. Rodriguez of Carey Rodriguez Milian LLP) for failing to pay the amounts owed under the judgment and the confirmed arbitration award. Petitioners' motion can be downloaded below.
Petitioners creatively argued that the judgment debtors are violating the court's order because the confirmed arbitration award orders payment "within thirty (30) days from the date of" the award and thus the judgment debtors were required to remit payment, with interest, within 30 days, by February 17, 2023. Petitioners asked the court to impose "contempt sanctions in the amount of a per diem fine for [the judgment debtors'] failure to comply" with the order confirming the award.
Petitioners suggested a fine in the amount of $2,500 per day to compel compliance with this and "further request[ed] that such daily fine increase by $1,000 per day (to a total of $3,500 per day, and then $4,500/day, etc.), following every subsequent ten calendar day period of non-compliance."
The judgment debtors responded, arguing that petitioners' motion is inapposite and premature because money judgments are enforced through writs and not civil contempt proceedings. The judgment debtors pointed out that petitioners have not "initiat[ed] enforcement proceedings in any jurisdiction and [have] not propound[ed] a single discovery request in aid of execution." They criticized petitioners for not addressing whether the confirmed award is "an equitable judgment for performance of a specific act or ... simply a judgment for the payment of money," noting that "[i]f the substance of the award renders it a money judgment, then it is governed by the enforcement mechanisms set forth in Federal Rule of Civil Procedure 69, and it should not be the subject of contempt proceedings."
The judgment debtors further argued that "both the Second Circuit and [the Southern District] have expressly recognized that judgments ... which confirm arbitral awards requiring the payment of money are money judgments," quoting Carte Blanche (Singapore) Pte., Ltd. v. Carte Blanche Int’l, Ltd., 888 F.2d 260 (2d Cir. 1989) and Nykcool A.B. v. Pac. Fruit Inc., No. 10 CIV. 3867 LAK AJP, 2012 WL 1255019, at *8 (S.D.N.Y. Apr. 16, 2012). The judgment debtors further relied on precedent from the Eleventh and Ninth Circuit to support their main argument, that “[t]he proper means ... to secure compliance with a money judgment is to seek a writ of execution, not to obtain a fine of contempt for the period of non-payment.”
The opposition may be found below.
The case is Telecom Business Solution LLC et al. v. Terra Towers Corp. et al., No. 1:22-cv-01761, in the U.S. District Court for the Southern District of New York.
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