The opinion of the court was delivered by: Judge Joan H. Lefkow
Shabbir Nomanbhoy filed a petition to confirm an arbitration award under the United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards (the "New York Convention") and its enabling statute, 9 U.S.C. §§ 201--08. Before the court are Nomanbhoy's motion to confirm the award and respondents' motion to dismiss the petition for lack of subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1). For the reasons set forth below, respondents' motion to dismiss the petition [#22] will be granted and Nomanbhoy's motion [#16] will be denied.
A motion to dismiss under Federal Rule of Civil Procedure 12(b)(1)
challenges the court's subject matter jurisdiction. The standard of
review for a Rule 12(b)(1) motion to dismiss depends on the purpose of
the motion. See United Phosphorous, Ltd. v.
Angus Chem. Co. , 322 F.3d 942, 946 (7th Cir. 2003)
( en banc ). If subject matter jurisdiction is not
evident from the face of the complaint, the court analyzes the motion
to dismiss under Rule 12(b)(1) as any other motion to dismiss and
assumes for purposes of the motion that the allegations in the
complaint are true. Id. Where, as here, "the
complaint is formally sufficient but the contention
is that there is in fact no subject matter jurisdiction, the
movant may use affidavits and other materials to support the motion."
Id .; Sapperstein v.
Hager , 188 F.3d 852, 855--56 (7th Cir. 1999);
Long v. Shorebank Dev. Corp. , 182
F.3d 548, 554 (7th Cir. 1999). The court may weigh the evidence to
determine whether jurisdiction has been established. United
Phosphorous , 322 F.3d at 946. The burden
of proof is on the party asserting jurisdiction. Id.
This dispute arises from Shabbir Nomanbhoy's management of and ownership in Dyna Care Health Ventures ("Dyna Care"), a company that provided home nursing services in Illinois, Michigan, Texas, Arizona, and Indiana. Dyna Care was founded in 1984 and its principal place of business was in Tinley Park, Illinois. Dyna Care did not provide any services outside the United States, had no operations outside the United States, and owned no property outside the United States.
Shabbir Nomanbhoy owned and operated Dyna Care with respondents, who are his family members. Respondents Aymen Tyebjee, Nafeesa Moosabhoy, and Yunus Nomanbhoy are his siblings. Zehra Vahanvaty is his niece. All of the parties to this dispute are U.S. citizens.
In 2004, Shabbir Nomanbhoy was a shareholder in Dyna Care as well as its CEO. A dispute arose regarding his management of the company and he was terminated from his management position. Subsequently, in 2005, Shabbir Nomanbhoy met with Tyebjee and one of their religious leaders, Shehzada Qaid Johar Bhaisaheb ("Shehzada Qaid"), in an attempt to work out an agreement. *fn2 The meeting took place in California and was not successful.
In 2006, Shehzada Qaid asked the parties to come to London to attempt to resolve their dispute. *fn3 While the parties were in London, Moosabhoy approached Shehzada Qaid's younger brother, Shehzada Mufaddal BS Saifuddin Saheb ("Shehzada Mufaddal") and asked for assistance in resolving the dispute. With Shehzada Mufaddal's help, the parties negotiated a settlement agreement in London over the course of several days.
On May 28, 2006, Shabbir Nomanbhoy, Yunus Nomanbhoy, Tyebjee, and Moosabhoy entered into a written settlement agreement (the "Settlement Agreement" or the "Agreement") "under the guidance and mediation of Shehzada Mufaddal." (Petition Ex. A at 1). The Settlement Agreement provided, inter alia , that Shabbir Nomanbhoy's ownership in Dyna Care would increase from 31.8% to 38.25% effective July 1, 2004, that Dyna Care would pay him $1 million by June 28, 2006, that Dyna Care's accountant, Kambiz Fallah, would perform a settlement of past accounts due (referred to in the Agreement as " hisab ") by July 9, 2006, and that Yunus Nomanbhoy and Tyebjee would attempt to sell Dyna Care within two years for a minimum sale price of $18 million. The Settlement Agreement includes a non-exhaustive list of financial issues that were to be considered as part of the hisab and provides that Shehzada Mufaddal would "arbitrate in amount and time needed for payments" if the hisab cannot be resolved. The final paragraph of the Settlement Agreement provides: "If there is any disagreement about this 'Settlement Agreement' issues [sic] will be resolved by arbitration of Shehzada Mufaddal BS Saifuddin Saheb." ( Id. at 3.)
The parties continued to have disagreements relating to Dyna Care, particularly concerning the hisab . On February 8, 2007, Shehzada Mufaddal circulated a document titled "Decisions taken by Shahzada Mufaddal Bhaysaheb Saiffudin Saheb on February 8, 2007 . . . in Colombo, Sri Lanka regarding Settlement Agreement done between Nomanbhoy family members on 28th May 2006 in London." (S. Nomanbhoy Supp. Aff. Ex. B.) The document lists additional issues that must be settled as part of the hisab and directs the parties to settle and pay the hisab no later than March 30, 2007. It further provides that " Hisab meetings will be held in Cairo or London . . . for 9 days starting no later than March 17, 2007 and all parties must attend with all documents. . . . If agreement on any issue is not reached by the end of these meetings, I . . . will make decisions on these issues . . . by March 30, 07." ( Id. at 1.)
In May 2007, the parties traveled to London and met with Shehzada Mufaddal, his assistants, and Dyna Care's accountant and attempted to come to an agreement as to the hisab . The accountant prepared a draft hisab that was circulated to the parties for comments. The process lasted for "several days" but failed to resolve the parties' dispute. (S. Nomanbhoy Supp. Aff. ¶ 17.)
In January 2008, the parties commenced arbitration before Shehzada Mufaddal in Colombo, Sri Lanka, where he was then residing. Shabbir Nomanbhoy, Tyebjee, and Moosabhoy were present at the five-day arbitration hearing. Yunus Nomanbhoy did not attend the arbitration. *fn4
On February 3, 2008, Shehzada Mufaddal issued a written arbitration award (the "Award") that names Shabbir Nomanbhoy, Yunus Nomanbhoy, Vahanvaty, Tyebjee, and Moosabhoy as parties. (Petition Ex. B.) The introductory paragraphs of the Award state that the parties were unable to agree on the hisab as to Dyna Care and that, "in accordance with the terms of the Settlement Agreement, the Parties referred their disputes to [Shehzada Mufaddal] for settlement in any manner which [he] consider[s] just and equitable." ( Id. at 1.) The introduction notes that the Settlement Agreement lacks a choice of law provision but concludes that the hisab can be resolved based on "just and equitable principles" and that "the question of applicable law does not arise in this case." ( Id. at 2.) The introduction further provides that Shehzada Mufaddal, "with the consent of all the Parties . . . hereby make[s] the following binding and final Award ...