Jolen, Inc. v. Kundan Rice Mills, Ltd.

Background

Jolen sought confirmation of a December 17, 2019 Final Arbitration Award issued against Kundan Rice Mills, Ltd. and Kundan Care Products, Ltd., together called the Kundan Entities. The court treated the petition as unopposed because the Kundan Entities did not respond after service through an alternate method approved by the court, and their response deadline had expired.

The dispute arose from an Exclusive Trademark License Agreement that Jolen and Kundan Rice Mills entered into on or about November 1, 2004. The agreement contained an arbitration clause. Jolen began arbitration in 2016, alleging that the Kundan Entities had breached the agreement by failing to make royalty payments and provide monthly sales reports.

In a 2018 Partial Award, the arbitrator found that the agreement was valid, that the Kundan Entities materially breached it, and that the uncured breach terminated the agreement on August 3, 2015. The court had previously confirmed that Partial Award. The arbitrator later decided damages and related issues based on written submissions; the Kundan Entities filed an opposition to Jolen’s damages submission during that phase.

Final Award

The Final Award awarded Jolen:

- $762,726.02 in pre-termination damages, plus 12% simple interest from January 14, 2019 through the date of the Final Award; - $1,586,650.49 in post-termination damages, plus 9% simple interest from January 14, 2019 through the date of the Final Award, with no exemplary damages; - $70,796.00 for breach of the arbitration agreement; - $451,398.48 in legal fees and expenses; and - 9% annual simple post-award interest on the amounts awarded, including pre-award interest, until paid in full.

The Final Award also required the parties to split equally the ICC arbitration costs, which totaled $45,230.00.

Court’s Analysis

The court explained that confirmation of an arbitration award is generally a limited review. Under the Federal Arbitration Act, a court must confirm an award unless a statutory ground for vacating, modifying, or correcting it applies. The court noted grounds such as fraud, arbitrator partiality, prejudicial procedural misconduct, an arbitrator exceeding the arbitrator’s powers, a material calculation error, or an award on a matter not submitted to arbitration. The Second Circuit also recognizes manifest disregard of the law or the parties’ agreement as additional grounds for vacatur.

The court concluded that the Final Award was final for confirmation purposes. It found that the dispute had been decided under the agreement’s arbitration clause and the International Chamber of Commerce rules. The arbitrator had explained the factual and legal basis for the award in detail, providing more than the minimal justification needed for confirmation. The court found no indication that the arbitrator exceeded the arbitrator’s authority and no applicable ground for vacating or modifying the award.

Disposition

The court granted the petition to confirm the Final Award. It directed the Clerk to enter Final Judgment for Jolen based on the December 17, 2019 Final Award and to terminate the letter motion. The court also stated that its earlier anti-suit injunction and civil-contempt orders remained in full force and effect and that it retained jurisdiction to enforce those orders.