Strong v. Cashbet Alderney Limited

Background

Winslow Strong sought an order under the Federal Arbitration Act confirming a December 22, 2021 foreign arbitration award issued by an International Centre for Dispute Resolution International Arbitration Tribunal. The dispute arose from investments in Cashbet Coins, a cryptocurrency marketed by Mobile Gaming Technologies, Inc. Strong and another investor had previously asserted securities-fraud claims and later agreed to arbitration.

A seven-day evidentiary hearing occurred from October 12 through October 20, 2021. The tribunal issued its final award on December 22, 2021. The respondents did not seek to vacate the award, and the statutory period for doing so had expired. Respondents fully paid the award about one month after it was issued, nearly 16 months before Strong filed this petition.

Strong filed the petition with a partially redacted version of the award because respondents had asserted that the award was covered by the tribunal’s confidentiality order. Respondents later moved to seal the entire award and moved to dismiss the petition for lack of subject-matter jurisdiction based on Article III standing. Strong argued that the Federal Arbitration Act gave him a statutory right to seek confirmation and that confirmation could provide relief related to a separate lawsuit concerning disclosure of the award.

Standing and dismissal

Article III of the Constitution limits federal courts to actual cases and controversies. To establish standing, a party must show a concrete and particularized injury that is actual or imminent, that the injury was likely caused by the opposing party, and that judicial relief would likely redress it. The court held that Strong failed to show an injury in fact.

Because the monetary award had already been fully satisfied, Strong was in the same position whether or not the court confirmed it. He did not identify any additional relief that confirmation could provide. The court also rejected Strong’s argument that the Federal Arbitration Act’s statutory confirmation procedure itself created standing. A statutory right to sue does not eliminate the constitutional requirement of a concrete injury.

The court further rejected Strong’s argument that confirmation would provide forward-looking relief from a related lawsuit concerning disclosure of the award. The petition did not request equitable relief, and confirmation would not provide a remedy or defense in that separate action. The court emphasized that standing must exist when the lawsuit is filed, and the related lawsuit had not yet been filed at that time.

Sealing motions

The court explained that judicial records are generally presumed to be publicly accessible. Because the petition was dispositive, the court applied the “compelling reasons” standard, which requires specific reasons strong enough to outweigh the public-access presumption.

The court found compelling reasons to seal the arbitration award. It concluded that the petition had been filed as a vehicle to make the award public, that the award had played no role in resolving the petition because Strong lacked standing, and that there was a plausible argument that the parties’ stipulated confidentiality order covered the entire arbitration, including the award. The court therefore granted the respondents’ sealing motions. It denied Strong’s administrative motion to seal as moot.

Disposition

The respondents’ motion to dismiss was GRANTED for lack of Article III standing. The administrative motions to seal identified in the conclusion as Docket Nos. 26 and 31 were GRANTED. Strong’s administrative motion to seal at Docket No. 3 was DENIED AS MOOT. The court stated that judgment would be entered by separate order and that the order disposed of Docket Nos. 3, 26, 31, and 33.