High Hope Zhongtian Corporation v. SUNBIRD USA INC.

Background

High Hope Zhongtian Corporation sought recognition and enforcement of a final arbitration award issued by the China International Economic and Trade Arbitration Commission. High Hope brought the action under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and its implementing statute, 9 U.S.C. §§ 201 et seq.

Sunbird USA Inc. was served through the Secretary of State of New York on September 23, 2022. Sunbird did not answer the complaint, request additional time, respond to the motion, or otherwise participate. The Clerk entered a Certificate of Default on November 16, 2022. High Hope then moved for a default judgment.

Court’s analysis

The court explained that default judgments in proceedings to confirm arbitration awards are generally inappropriate. Instead, it reviewed the complaint and record under the standard used for deciding summary judgment.

The court found that High Hope provided the properly certified copies of the arbitration award and the underlying arbitration agreement, along with certified translations, as required by the Convention. Sunbird did not raise or prove any of the Convention’s listed defenses.

The 21 contracts concerned the sale of bedding items and included provisions requiring final and binding arbitration before the Arbitration Commission in Shanghai under its rules. The arbitration commission sent Sunbird notice of the arbitration and hearing. Although several mailings were returned, the commission confirmed delivery of notice at a third address on October 28, 2019. Sunbird did not respond, appear at the September 18, 2020 hearing, or submit evidence. A three-person arbitration panel issued the written Final Award on September 7, 2021.

The Final Award granted High Hope $1,150,650.97 in damages for Sunbird’s failure to pay for goods sold and delivered. It also awarded RMB 150,000 in attorney’s fees, RMB 4,870 in notarial fees, and RMB 209,695 in prepaid arbitration fees. The court concluded that the dispute could be arbitrated, the written arbitration clause covered the dispute, and Sunbird received notice and an opportunity to be heard. It also found no public-policy violation or other defense apparent from the record.

Ruling

The court granted High Hope’s motion. It recognized and enforced the Final Award. After converting the renminbi amounts using the Federal Reserve exchange rate, the court calculated the total award as $1,204,474.81. The Clerk was directed to enter judgment for High Hope against Sunbird in that amount, terminate the motion, and close the action.