Leonardo Electronics US Inc. v. Nomir Medical Technologies, Inc.

Background

Leonardo Electronics US Inc., formerly known as Selec Galileo Inc., petitioned to confirm an arbitration award issued by the International Centre for Dispute Resolution. The dispute arose from an Exclusive Alliance Agreement under which the parties jointly created business plans to develop and commercialize a laser capable of eliminating certain drug-resistant organisms. Leonardo alleged that Nomir wrongfully terminated the agreement while the product was undergoing human pilot studies.

The arbitration panel issued a 76-page award on August 11, 2020. It found that Nomir had no basis to terminate the agreement and awarded Leonardo $3,105,861 in reliance, or out-of-pocket, damages, plus interest at New York’s statutory rate. The panel also awarded Leonardo $3,309,559.89 in costs and arbitration expenses, plus interest on that amount from the date of the award. The total award was $6,415,420.89 plus the specified interest. The opinion states that the agreement barred an award of attorney’s fees.

Proceedings in Federal Court

Leonardo initially moved for a default judgment confirming the award. Nomir was served with the motion papers and with an order directing it to explain why judgment should not be entered, but Nomir did not appear in the federal case or otherwise defend against the petition. Only Leonardo appeared at the February 3, 2021 hearing.

The court explained that default judgment is generally inappropriate in an arbitration-confirmation proceeding when the non-appearing party participated in the arbitration. Because the arbitration record—including the parties’ agreement and the arbitration award—was available, the court treated Leonardo’s request as an unopposed motion for summary judgment.

Court’s Analysis

Summary judgment is appropriate when there is no genuine dispute of material fact requiring a trial. The court emphasized that its review of an arbitration award is narrow. Under the applicable federal arbitration law, the court must confirm an award unless it is vacated, modified, or corrected, and only a barely colorable justification for the arbitrators’ result is generally needed.

The court reviewed the petition and supporting materials and found no genuine issue of material fact preventing confirmation of any part of the award. In particular, the arbitration record provided at least a colorable justification for the panel’s findings that Leonardo had not stopped material development and commercialization of Nomir’s licensed technology and that Nomir therefore breached the agreement by attempting to terminate it.

The court also noted Leonardo’s assertion that Nomir had not timely moved to modify, vacate, or correct the award. The court stated that, as a result, any defense to confirmation had been forfeited.

Disposition

Judge Mary Kay Vyskocil granted the unopposed motion for summary judgment and confirmed the arbitration award. The court directed the clerk to enter judgment for Leonardo in the amount of $7,654,997.25, which reflected the award and accrued interest as of the date of the order. Further interest was to accrue under 28 U.S.C. § 1961. The court also directed the clerk to terminate all pending motions and close the case.