Cessna Finance Corporation v. Al Ghaith Holding Company PJSC

Background

Cessna Finance Corporation entered into three aircraft lease agreements with Prestige Jet Rental LLC between 2007 and 2008. Al Ghaith Holding Company PJSC later signed guaranty agreements for those leases. The agreements included arbitration provisions requiring disputes to be resolved under International Chamber of Commerce rules, with the arbitration taking place in New York.

Prestige stopped making lease payments, and Cessna repossessed and sold the aircraft. Cessna then sought payment from Al Ghaith under the guaranties. An arbitration panel concluded that it had jurisdiction, that Al Ghaith breached the guaranties, and that Al Ghaith's defenses were invalid. The panel ordered Al Ghaith to pay a deficiency of $41,168,134.19, plus interest; $530,000 in arbitration costs, plus interest; and 75% of Cessna's legal fees and other arbitration expenses, totaling $1,503,839.91, plus interest.

Earlier Court Ruling

Cessna petitioned the court to confirm the arbitration award. Al Ghaith cross-petitioned to vacate it, arguing that the arbitrators acted in manifest disregard of United Arab Emirates law. On May 7, 2019, the court granted Cessna's motion to confirm the award and denied Al Ghaith's cross-motion to vacate it.

The court found that Al Ghaith had not met the heavy burden required to show manifest disregard of the law. It relied on the arbitrators' factual findings that Al Ghaith had consistently acted as though the guaranties were valid and binding. The court also found that the arbitrators had expressly considered and applied United Arab Emirates law, including its good-faith requirement.

Motion for Reconsideration

Al Ghaith moved for reconsideration under Local Rule 6.3. It argued that the court had improperly deferred to the arbitrators' factual findings instead of reviewing them for clear error. It also argued that the arbitrators had applied United Arab Emirates law while ignoring other relevant provisions.

The court explained that reconsideration is an extraordinary remedy and cannot be used to present new arguments or relitigate issues already decided. Reconsideration may be appropriate when there is an intervening change in controlling law, newly available evidence, a clear error, or a need to prevent manifest injustice.

The court rejected both of Al Ghaith's arguments. It stated that arbitrators' factual findings and contract interpretations generally are not subject to judicial challenge during limited review for manifest disregard of the law. It also found that the earlier ruling had not treated the arbitration award as an unexplained black box: the award was supported by the record and explained in 67 pages.

The court further held that Al Ghaith's claim that the arbitrators misapplied United Arab Emirates law was insufficient. A mistake of law or fact does not by itself justify vacating an arbitration award. Vacatur for manifest disregard requires a showing that the arbitrators knew of a clearly applicable legal rule and deliberately refused to apply it. The court found that Al Ghaith had not made that showing.

Disposition

Judge Paul G. Gardephe denied Al Ghaith's motion for reconsideration. The court also denied Al Ghaith's motion for oral argument as moot, directed the Clerk to terminate the motions, and ordered the case closed.