Global Gaming Philippines, LLC v. Razon, Jr.

Background

Global Gaming Phillipines, LLC is pursuing recognition and enforcement of arbitration awards against Bloomberry Resorts and Hotels, Inc. (BRHI) and Sureste Properties, Inc. (SPI), which the opinion calls the “Debtor Defendants.” BRHI and SPI moved to compel Global Gaming to produce documents responsive to disputed requests for production.

The requests concerned BRHI and SPI’s anticipated argument that the court should refuse to recognize and enforce the awards because enforcement would violate United States public policy. The requested documents related to Bill Weidner and Eric Chiu, two Global Gaming executives. BRHI and SPI argued that Weidner and Chiu were involved in breaching the parties’ agreement or fraudulently inducing BRHI and SPI to enter it. Their allegations appeared to rely in part on a non-prosecution agreement between the U.S. Department of Justice and Las Vegas Sands Corp., where Weidner and Chiu had previously worked.

Legal standard

The court explained that foreign arbitration awards are generally subject to confirmation under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly called the New York Convention. A court may refuse enforcement only on one of the Convention’s specified grounds, including the public-policy exception. That exception is very narrow and applies only when enforcement would violate the country’s most basic notions of morality and justice.

The court also explained that it has discretion to deny discovery in proceedings to confirm or challenge an arbitration award. Discovery is available only when it is relevant and necessary to an issue raised in the proceeding. The court must consider the requesting party’s need for information and the effect of discovery on the arbitration process, including whether the discovery would improperly relitigate issues already presented to the arbitrators.

Ruling

The court found that BRHI and SPI had not met their heavy burden to show that enforcing the awards would violate United States public policy. The arbitration tribunal’s final award had specifically addressed the Department of Justice’s non-prosecution agreement with Las Vegas Sands Corp. and the companies’ speculative assertions about Weidner’s and Chiu’s actions and their consequences.

The court declined to permit collateral litigation that could undermine the Federal Arbitration Act and the New York Convention, particularly because the issues appeared to have been litigated in the arbitration. The court denied BRHI and SPI’s motion to compel Global Gaming to produce the requested documents. The Clerk of Court was directed to deny the motion at ECF No. 104.