RZS Holdings AVV v. PDVSA Petroleo S.A.

UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 09-1171
RZS HOLDINGS AVV,
Plaintiff - Appellant,
v.
PDVSA PETROLEO S.A.; ALI RODRIGUEZ ARAQUE; RODOLFO PORRO;
JOSE ROJAS; IVAN HERNANDEZ; FELIX RODRIGUEZ; NELSON
MARTINEZ; DESTER RODRIGUEZ; LUIS VIERMA; RAFAEL ROSALES;
NELSON NUNEZ; VICTOR ALVAREZ,
Defendants - Appellees.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:04-cv-00784-GBL-TRJ)
Argued: May 12, 2010 Decided: June 16, 2010
Before TRAXLER, Chief Judge, MOTZ, Circuit Judge, and Arthur L.
ALARCÓN, Senior Circuit Judge of the United States Court of
Appeals for the Ninth Circuit, sitting by designation.
Affirmed by unpublished per curiam opinion.
ARGUED: Henry St. John FitzGerald, Arlington, Virginia, for
Appellant. Christopher O. Davis, BAKER, DONELSON, BEARMAN,
CALDWELL & BERKOWITZ, PC, New Orleans, Louisiana, for Appellees.
ON BRIEF: Matthew A. Woolf, BAKER, DONELSON, BEARMAN, CALDWELL &
BERKOWITZ, PC, New Orleans, Louisiana; Joseph F. Giordano,
SEMMES, BOWEN & SEMMES, Vienna, Virginia, for Appellees.
Unpublished opinions are not binding precedent in this circuit.
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PER CURIAM:
RZS Holdings AVV (“RZS”) appeals the order of the district
court granting the motion of PDVSA Petroleo S.A. (“PDVSA”) to
confirm the arbitral award rendered in favor of PDVSA by the ICC
International Court of Arbitration (“ICC”). We affirm.
I.
RZS and PDVSA entered into a contract for RZS to deliver
petroleum to PDVSA in Venezuela. PDVSA ultimately did not take
delivery of the petroleum. After negotiations broke down, RZS
sued PDVSA in Virginia state court, alleging a breach of
contract. PDVSA removed the case to federal court, and then
submitted it to arbitration as provided by the terms of the
contract. A three-member panel of the ICC found that PDVSA had
breached the contract, but awarded RZS no damages for that
breach. PDVSA then moved the district court to confirm the
award, and thus make it a binding judgment in United States
courts.
During the hearing on that motion, RZS’s attorney withdrew
from representation. The district court then confirmed the
award without allowing RZS a continuance to find replacement
counsel. RZS appealed, and we reversed and remanded, holding
that the district court had denied RZS due process. See RZS
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Holdings AVV v. PDVSA Petroleo S.A., 506 F.3d 350 (4th Cir.
2007).
II.
On remand, now with new counsel, RZS again challenged
confirmation of the arbitration award, alleging that the
arbitration tribunal had exhibited bias in favor of PDVSA, that
the tribunal had failed to consider the evidence in an
evenhanded manner, and that the arbitral proceedings were
defective because PDVSA had paid the tribunal’s entire fee when
RZS was incapable of paying its share. The district court
granted RZS limited discovery, and RZS deposed the arbitrators
and attempted to gather evidence to support its allegations.
When this discovery produced no evidence to corroborate RZS’s
claims, RZS requested additional discovery and a hearing, which
the district court denied.
After considering the evidence, the district court again
granted PDVSA’s motion to confirm the award. The district court
initially held that the Inter-American Convention on
International Commercial Arbitration (“Inter-American
Convention”) governed and supplied the exclusive grounds for
refusing to enforce the arbitral award, and that RZS’s arguments
did not address criteria specified by the Inter-American
Convention. Alternatively, the district court assumed that, as
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RZS had argued, the Federal Arbitration Act (“FAA”) governed
RZS’s claims, and held that RZS had failed to establish that the
tribunal had done anything improper that would justify a refusal
to confirm the award under the FAA.
RZS noted this appeal.
III.
We have carefully considered the record, the briefs, and
the oral arguments, and we affirm on the basis of the district
court’s well-reasoned opinion. See RZS Holdings AVV v. PDVSA
Petoleos S.A., 598 F. Supp. 2d 762 (E.D. Va. 2009). Given that
opinion, we need only briefly address RZS’s contentions on
appeal.
RZS primarily argues that the district court erred in
holding that the Inter-American Convention, and not the FAA,
governs review of the award in this case. RZS argues further
that the court should refuse to confirm the award under
§ 10(a)(2)-(3) of the FAA, which states that a court may vacate
an arbitral award:
(2) where there was evident partiality or corruption
in the arbitrators, or either of them; [or]
(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 . . . .
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9 U.S.C. § 10 (2006). All of RZS’s allegations of partiality,
corruption, and misconduct are baseless. Thus, even assuming
that the FAA applies, we hold that RZS has failed to demonstrate
that the district court should have refused to confirm the ICC’s
award.
RZS next contends that to enforce the award would violate
its due process rights. This claim is merely an amalgamation of
RZS’s other allegations of impropriety -- all of which the
district court properly found meritless. The whole is no
greater than the sum of its parts. Additionally, RZS has
presented literally no authority (nor have we discovered any) in
support of its argument that enforcement of the ICC’s award
would violate RZS’s rights to due process.
Finally, RZS’s argument that the district court erred by
refusing to order additional discovery or an evidentiary hearing
on the issue of arbitrator bias also fails. “This Court affords
a district court substantial discretion in managing discovery
and reviews the denial or granting of a motion to compel
discovery for abuse of discretion.” Lone Star Steakhouse &
Saloon, Inc. v. Alpha of Va., Inc., 43 F.3d 922, 929 (4th Cir.
1995). We find no such abuse here. The district court allowed
RZS to depose the arbitrators on the subject of bias, and these
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depositions revealed only that RZS’s allegations lacked factual
basis.
IV.
The judgment of the district court is
AFFIRMED.
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