United States District Court, D. South Carolina, Columbia Division
NTCH, Inc. and PTA-FLA, Inc., Petitioners,
Huawei Technologies USA, Inc., Respondent.
OPINION AND ORDER
L. WOOTEN, Chief District Judge.
Petitioners, NTCH, Inc. and PTA-FLA, Inc. (collectively
"Petitioners"), initiated this action against the
Respondent, Huawei Technologies USA, Inc.
("Respondent" or "Respondent Huawei"), on
September 8, 2015 seeking to vacate an arbitration award
pursuant to Section 10 of the Federal Arbitration Act
("FAA"), 9 U.S.C. § 1 et seq. (Doc. #1).
Respondent filed a response opposing Petitioners' motion
to vacate, and further moved the Court to confirm the
arbitration award pursuant to Section 9 of the FAA. (Doc.
#4). For the reasons set forth below, the Court grants
Respondent's motion to confirm the arbitration award
(Doc. #4), and denies Petitioners' motion to vacate (Doc.
AND PROCEDURAL BACKGROUND
related case involving Petitioners and Respondent was
previously before this Court for consideration of a Motion
for Preliminary Injunction filed by Petitioners and, in
response, a Motion to Compel Arbitration filed by Respondent.
(Case No. 3:14-cv-01312-TLW). In that matter, after
conducting a hearing, this Court issued an Order on July 2,
2014 ("July 2014 Order") granting Respondent's
motion to compel arbitration, denying Petitioners' motion
for preliminary injunction, and ordering the parties to
arbitrate their dispute. (See Case No. 3:14cv-01312-TLW;
Doc. #24). Respondent Huawei made claims for breach of
contract based on the nonpayment of orders placed pursuant to
the Supply Contract for equipment in the amount of $313,
042.78; software licenses in the amount of $249, 401.11; and
for professional services in the amount of $598, 000.00, for
a total amount of $1, 160, 443.89, in addition to
attorneys' fees, costs and expenses. (Doc. #1-2 at 4 ¶
Arbitration was commenced by Respondent Huawei in February of
2014. On April 21, 22 and 23, 2015, Petitioners and
Respondent participated in a commercial
arbitration proceeding before the American Arbitration
Association ("AAA"), Case No. 50 20 1400 0172
(hereinafter "the Arbitration Proceeding"). (Doc.
#1). The Arbitration Proceeding was held before a panel of
three mutually agreed upon arbitrators (hereinafter the
"Arbitration Panel") in Atlanta, Georgia, pursuant
to the arbitration provision in the parties' Supply
Contract, as well as this Court's July 2014 Order
compelling arbitration. (See Doc. #1).
full briefing and three days of arbitration, the Arbitration
Panel unanimously found in favor of the Respondent Huawei in
the breach of contract action, and awarded a total of $2,
015, 845.57 to Respondent in two written awards, issued on
June 19, 2015 and August 18, 2015 respectively. (Docs. #1-2;
#1-8). In the first award, captioned "Partial Final
Award of Arbitrators, Save Calculation of Attorney's Fees
and Expenses and Interest, and Allocation of Arbitration
Expenses, " the Arbitration Panel unanimously found
Petitioners jointly and severally liable to Respondent Huawei
for breach of the Supply Contract, and awarded Respondent $1,
160, 443.89 for "actual damages for the amounts due and
owing on all unpaid invoices." (Doc. #1-2 at 7 ¶ a). The
second and "Final Award of Arbitrators" awarded
Respondent Huawei additional sums for attorneys' fees and
other fees and expenses. (Doc. #1-8). As noted, the
Arbitration Panel awarded Respondent Huawei a total of $2,
STANDARD OF REVIEW: MOTION TO VACATE ARBITRATION AWARD
the issuance of the Arbitration Award finding in favor of
Respondent Huawei, Petitioners filed the instant action
moving this Court to vacate the "Partial Final Award of
Arbitrators and Final Award of Arbitrators" (hereinafter
collectively referred to as the "Arbitration
Award"), issued in the Arbitration Proceeding, Case No.
50 20 1400 0172. (See Docs. #1; #1-1 at 1). Petitioners
assert that this Court "should vacate the [Arbitration]
Award because the arbitral tribunal  exceed their powers
(sic) and manifestly disregarded the law." (Doc. #1-1 at
10 of the FAA provides that a United States Court may vacate
an arbitration award for the following limited grounds:
"(1) where the award was procured by corruption, fraud,
or undue means; (2) where there was evident partiality or
corruption in the arbitrators, or either of them; (3) where
the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in
refusing to hear evidence pertinent and material to the
controversy; or of any other misbehavior by which the rights
of any party have been prejudiced; or (4) where the
arbitrators exceeded their powers, or so imperfectly executed
them that a mutual, final, and definite award upon the
subject matter submitted was not made." FAA, 9 U.S.C. §
10. The Fourth Circuit has cautioned that courts should be
"hesitant to read any of § 10's grounds for vacatur
too broadly." Wachovia Sec., LLC v. Brand, 671
F.3d at 478.
addition, a reviewing court may vacate an arbitration award
based on the assertion that the arbitrator acted in manifest
disregard for the law where: "(1) the applicable legal
principle is clearly defined and not subject to reasonable
debate; and (2) the arbitrator refused to heed that legal
principle." Wachovia Sec., LLC, 671 F.3d at 483. The
Fourth Circuit Court of Appeals has held that,
"[w]hether manifest disregard is a judicial gloss'
or an independent ground for vacatur, it is not an invitation
to review the merits of the underlying arbitration."
scope of review of an arbitrator's decision is
"substantially circumscribed" and is "among
the narrowest known at law because to allow full scrutiny of
such awards would frustrate the purpose of having arbitration
at all-the quick resolution of disputes and the avoidance of
the expense and delay associated with litigation."
MCI Constructors, LLC v. City of Greensboro, 610
F.3d 849, 857 (4th Cir. 2010). "A court sits to
determine only whether the arbitrator did his job-not whether
he did it well, correctly, or reasonably, but simply whether
he did it.'" Wachovia Sec., LLC v. Brand,
671 F.3d 472, 478 (4th Cir. 2012) (quoting U.S. Postal
Serv. v. Am. Postal Workers Union, AFL-CIO, 204 F.3d
523, 527 (4th Cir. 2000)). Indeed, the United States Supreme
Court has held that "as long as the arbitrator is even
arguably construing or applying the contract and acting
within the scope of his authority, that a court is convinced
he committed serious error does not suffice to overturn his
decision." United Paperworkers Int'l Union
AFL-CIO v. Misco, Inc., 484 U.S. 29, 38 (1987); see also
MCI Constructors, 610 F.3d at 700. Thus, a party challenging
an arbitration award "must clear a high hurdle. It is
not enough... to show that the [Arbitration Panel] committed
an error-or even a serious error. It is only when the
arbitrator strays from interpretation and application of the
agreement and effectively dispenses his own brand of
industrial justice that his decision may be
unenforceable." Cent. W. Virginia Energy, Inc. v.
Bayer Cropscience LP, 645 F.3d 267, 272 (4th Cir. 2011)
(quoting Stolt-Nielsen S.A. v. AnimalFeeds Int'l
Corp., 559 U.S. 662, 671 (2010)).
discussed below, Petitioners in the instant case seek to
vacate the Arbitration Award based on allegations that the
Arbitration Panel "ignored applicable law by both
failing to apply the applicable statute of limitations and
also by awarding attorneys' fees to [Respondent]."
(Doc. #1-1 at 2).
MOTION TO VACATE ARBITRATION AWARD
essentially argue two grounds upon which to vacate the
Arbitration Award: (1) the arbitration panel manifestly
disregarded the law in connection with its application of the
four-year statute of limitations period applicable to breach
of contract actions under Texas law in connection with one
invoice; and (2) the arbitration panel ...