Eletson Holdings Inc. v. Levona Holdings Ltd.

Background

The case concerns Eletson’s petition to confirm an arbitration award and Levona’s amended cross-petition to vacate that award. In an earlier ruling, the Court allowed Levona to pursue discovery concerning documents produced in a separate bankruptcy proceeding. Those documents appeared to contradict Eletson’s position in the arbitration that it had exercised an option in March 2022 to purchase Levona’s preferred interests in Eletson Gas LLC.

The intervenors sought several forms of discovery related to those documents, which the opinion calls the “At-Issue Documents.” They asked to subpoena Peter Kanelos, a United States citizen residing in Greece; asked the Court to issue letters of request or letters rogatory to courts in the British Virgin Islands, England, Bermuda, and Canada; and sought to join Eletson’s earlier motion to compel documents from Levona.

Kanelos subpoena

The intervenors sought testimony and documents from Kanelos about the At-Issue Documents, whether the documents or their contents were shared with Levona or related entities, and whether recordings or other communications existed. Under 28 U.S.C. § 1783, a court may subpoena a United States citizen or resident abroad when the evidence is necessary in the interest of justice and cannot be obtained in admissible form another way.

The Court concluded that much of Kanelos’s testimony and document production was necessary in the interest of justice because he sent or received each of the At-Issue Documents and could testify about their meaning and possible disclosure. But the intervenors did not show that obtaining his testimony through other means—such as a voluntary deposition abroad, a nearby deposition, or procedures involving a foreign court—was impracticable. The Court also found that the intervenors had not shown that discovery about the audio recording or other recordings was necessary in the interest of justice.

The motion for a subpoena at Docket No. 388 was therefore DENIED WITHOUT PREJUDICE TO RENEW.

Letters of request and letters rogatory

The intervenors sought evidence from Levona’s foreign counsel, Nomis Bay Ltd., BPY Limited, Murchinson Ltd., and certain Murchinson-affiliated individuals. Letters of request or letters rogatory are requests from one court to a foreign court for assistance in obtaining evidence. The Court applied discovery principles requiring the material to be relevant, nonprivileged, and proportional, along with a case-specific assessment of international comity—the need to respect foreign courts and sovereign interests.

The Court denied the requests directed to Levona’s counsel, Conyers Dill & Pearman and Rahman Ravelli Solicitors. The requested discovery substantially duplicated discovery sought from Levona and Murchinson, could implicate attorney-client privilege or attorney work product, and was not shown to be unavailable from Levona itself. The Court also denied the requests directed to Nomis Bay and BPY because the intervenors did not explain how entities described as special-purpose vehicles with no employees could possess relevant, nonduplicative information beyond what could be obtained from Levona and Murchinson.

The Court treated Murchinson differently. It found that Murchinson was not a shell company, employed individuals whose conduct and communications were central to the case, and might possess records that were not merely duplicative of Levona’s records. The Court therefore agreed to sign a letter rogatory concerning Murchinson and the named individuals to determine whether Murchinson received the At-Issue Documents or received the proposals described in those documents through other means.

The discovery from Murchinson had to be limited to documents and communications concerning the At-Issue Documents before July 3, 2024, and had to exclude information Murchinson obtained through Pach Shemen’s participation in the bankruptcy proceeding. The parties were directed to meet and confer about a revised request and provide it to the Court. Requests concerning the audio recording, its transcript, and other recordings were denied as insufficiently relevant.

The motions for letters rogatory at Docket Nos. 377, 380, and 383 were DENIED. The motion for a letter rogatory at Docket No. 386 was GRANTED IN PART.

Request to join Eletson’s motion to compel

The intervenors also sought to join Eletson’s earlier motion to compel discovery from Levona. The Court denied that request because Eletson had withdrawn the document request underlying its motion. The intervenors had served their own requests, and they could not use another party’s motion and meet-and-confer efforts to compel responses to those separate requests.

The Court stated that, after receiving Levona’s responses and attempting in good faith to resolve any dispute, the intervenors could file their own motion to compel and could incorporate arguments previously made by Eletson.

The motion at Docket No. 376 to join the motion to compel at Docket No. 182 was DENIED. The Clerk was directed to close Docket Nos. 182, 376, 377, 380, 383, 386, and 388.