Barton v. Zhang

Background

Jacob Barton moved for summary judgment under Federal Rule of Civil Procedure 56 to confirm an arbitration award entered in his favor against Bo Zhang. Barton and Local Projects had pursued arbitration against Zhang, Harves Bridge LLC, and Beijing Shengpuruisi International Sports Co., Ltd. The dispute arose from agreements concerning the formation and operation of DreamCube Innovations LLC and the development of interactive sports gaming centers for the Chinese market.

According to the undisputed facts accepted by the court, Zhang and companies he controlled failed to make approximately $4.5 million in contractually required payments to Barton and Local Projects. The parties had invoked arbitration provisions in two agreements. After an evidentiary hearing for which the respondents received notice but did not attend, an arbitral panel issued a September 19, 2023 award jointly and severally against the three respondents. The award favored Barton and Local Projects and totaled $5,679,845.91, including pre-award interest, attorneys’ fees, and expenses.

Zhang did not respond to Barton’s summary-judgment motion or file the required statement responding to Barton’s factual assertions. The court therefore treated properly supported facts in Barton’s statement as admitted. The court also required Barton to address whether it had personal jurisdiction over Zhang.

Court’s analysis

The court treated the petition to confirm the arbitration award and the supporting materials as an unopposed motion for summary judgment. Even without an opposition, the court independently reviewed Barton’s submissions to determine whether Barton showed that no genuine dispute of material fact existed and that he was entitled to judgment as a matter of law.

The court concluded that it had subject-matter jurisdiction under 28 U.S.C. § 1331(a) and 9 U.S.C. § 203. The Federal Arbitration Act supplied jurisdiction because the award concerned a commercial matter covered by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly called the New York Convention. The court also found venue proper because a substantial part of the events giving rise to the claim occurred in the district.

The court found personal jurisdiction over Zhang under New York’s specific-jurisdiction statute. Barton submitted evidence that Zhang had transacted business in New York and that the claim arose from that activity. The court relied on evidence that Zhang’s agents visited New York, negotiations occurred there, the agreements contemplated that Barton would provide services and conduct business there, a prototype would be developed and tested there, and Zhang communicated with Barton while Barton was in New York. The agreements also selected New York law for substantive issues. The court found a substantial relationship between those New York activities and Barton’s claim for breach of the contractual obligations.

The court explained that review of an arbitration award is limited. Under the New York Convention, an award generally must be confirmed unless the opposing party proves one of the specified grounds for refusing recognition or enforcement. The Federal Arbitration Act also identifies limited grounds for vacating an award, such as fraud, arbitrator partiality, serious procedural misconduct, or an arbitrator’s exceeding the arbitrator’s authority.

The court determined that the arbitration agreements were broad enough to cover the dispute and the resulting award. It identified no ground for refusing to confirm or vacating any part of the award. The court also noted that although Zhang was not an individual signatory to the two agreements, the arbitral panel had denied his initial motion challenging jurisdiction, and Zhang did not later object to the panel’s jurisdiction.

Disposition

The court granted Barton’s motion for summary judgment. It directed the Clerk to enter judgment in Barton’s favor and against Zhang as follows:

- Confirm the arbitration award in all respects. - Award Barton $5,679,845.91, plus prejudgment interest from September 19, 2023, through the date of judgment at nine percent per year. - Award post-judgment interest at nine percent per year.

The court directed the Clerk to close the motion docket entry.