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Universal Forum of Cultures Barcelona 2004, S.L., In Liquidation v. Council For A Parliament of the World's Religions

March 21, 2012

UNIVERSAL FORUM OF CULTURES BARCELONA 2004, S.L., IN LIQUIDATION, PETITIONER,
v.
COUNCIL FOR A PARLIAMENT OF THE WORLD'S RELIGIONS,
RESPONDENT.



The opinion of the court was delivered by: Judge John W. Darrah

MEMORANDUM OPINION AND ORDER

Petitioner Universal Forum of Cultures Barcelona 2004, S.L., in liquidation (the "Forum") has filed a petition to confirm a foreign arbitral award in its favor and against Respondent Council for a Parliament of the World's Religions (the "Council"). The Council has moved to dismiss that petition pursuant to Federal Rule of Civil Procedure 12(b)(1) or, in the alternative, to refuse to confirm the foreign arbitral award. The Forum has filed a cross-motion to confirm the foreign arbitral award. For the reasons discussed below, the Council's motions are denied; and the foreign arbitral award in the Forum's favor is confirmed.

BACKGROUND

In June 2003, the Forum, the Council and a third party, the UNESCO Centre of Catalonia (the "Centre"), finalized an agreement to hold an "international interreligious event" in Barcelona, Spain, called the "2004 Parliament of the World's Religions" (the "Parliament"). The parties executed a Memorandum of Understanding (the "MOU"), a twenty-seven page document dated June 4, 2003, which "govern[ed] the relationship" between the Forum, the Council, and the Centre. According to the MOU, the Forum and the Council were the "governing" parties and "responsible for all matters pertaining to policy, procedures, operations, programming, and funding" of the Parliament. In paragraph 20, entitled "Conflict negotiation process," the MOU provided the following conflict resolution process:

This Agreement is governed by Spanish Law. In the event that conflicts, disagreements, misunderstandings, or differences cannot be resolved through the normal and established channels of communication and authority, the following two-step process would [sic] be undertaken:

* Three principal Executive officers of the COUNCIL, [THE FORUM], and the CENTRE would seek to mediate these matters to the satisfaction of all parties; and if unsuccessful,

* The parties accept the institutional arbitration of the Court of Arbitration of Barcelona, of the Catalan Association for Arbitration, which is in charge of appointing the arbitrator or arbitrators and the administration of the arbitration. The parties herein agree to comply with the arbitration decision. The parties agree that the Arbitration will be according to Law.

(MOU, p. 26.)

Shortly after the Parliament's "international interreligious event" ended, the Forum and the Council began to disagree about how much money the Council owed the Forum. From September 2004 through January 2005, the parties exchanged several offers and counteroffers. On January 31, 2005, the Forum sent to the Council a short, two-page letter regarding the Council's outstanding debt of $565,159 (the "2005 Letter Agreement"). (See Resp.'s Memo. in Support of Mot. to Dismiss, Exh. B.) In that letter, the Forum proposed a payment schedule for the Council to pay back its debt through 2008. (See Resp.'s Memo. in Support of Mot. to Dismiss, Exh. B.) The Council signed and accepted that agreement on March 28, 2005. (Id.) However, the Council failed to make all the payments as set forth in the 2005 Letter Agreement. On February 10, 2009, the Forum made a demand for payment on the outstanding debt of $238,592.52. The Council made a partial payment of $25,000 in November 2009 but made no further payments. (See Petition Exh. 2, Final Arbitration Award, at 11.)

On May 20, 2010, the Forum convened an arbitration proceeding in the Arbitration Court of Barcelona, invoking the arbitration clause contained in paragraph 20 of the MOU. In its submission to the Arbitration Court on June 24, 2010, the Council acknowledged the existence of the arbitration agreement in the MOU, but argued that the mediation step of paragraph 20 had not been satisfied. (Id. at 8.) Both parties requested that the Arbitration Court appoint a sole arbitrator, and Carlos Valls Martinez was appointed. The Council was represented by two Barcelona-based attorneys, Cesar Rivera and Carlos Gomez. On April 8, 2011, the initial arbitration proceedings commenced, in the presence of the reporting magistrate of the Arbitration Court of Barcelona, the arbitrator, and the Forum, but without the appearance of the Council. (Id. at 9.)

On April 27, 2011, the Forum submitted its Request for Arbitration outlining its claims and demands. In its Response to the Request, the Council acknowledged that the MOU "effectively included in its clause 20 a valid arbitration agreement," but repeated its objection that the arbitration clause was not in effect because the "first phase" of mediation had not taken place and, for that reason, requested that the MOU be declared null and invalid. (Id. at 11.) The Council further requested that the arbitrator "declare the lack of competence of this Arbitration Court . since the [Forum] has failed to comply with the measures agreed upon which were to be pursued prior to proceeding to arbitration." (Id. at 12.)

On September 9, 2011, the arbitrator issued an award in the Forum's favor in the total amount of US $276,196.22 (the "Award").*fn1 The arbitrator also issued a lengthy decision, in which he analyzed and rejected the Council's objection regarding the mediation phase of the MOU. (Id. at 17-35.) On May 9, 2012, the Forum filed its petition to confirm the foreign arbitral award with this Court.

DISCUSSION

The Federal Arbitration Act (the "FAA"), 9 U.S.C. § 201 et seq, incorporates into federal law the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1985, commonly known as the New York Convention (the "Convention"). See Slaney v. Int'l Amateur Ath. Fed'n, 244 F.3d 580, 588 (7th Cir. 2001) (Slaney). The FAA provides for the enforcement of foreign arbitration agreements and awards and vests federal district courts with original jurisdiction over actions "falling under the Convention." 9 U.S.C. § 203; see also Czarina, L.L.C. v. W.F. Poe Syndicate, 358 F.3d 1286, 1291 (11th Cir. 2004) (Czarina). Under ...


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