US engineering firm wins default judgment against Dagestani glass company
MOSCOW, July 22 (RAPSI) - A US federal court has granted a motion filed by US-based glass engineering firm Henry F. Teichmann, Inc. (Teichmann) seeking default judgment against Dagestani glass company Caspian Flat Glass OJSC (Caspian) based on the failure of the latter to timely respond to a complaint and summons served amidst effort to compel arbitration in Zurich, according to documents obtained by RAPSI.
Teichmann filed a complaint with the US District Court for the Western District of Pennsylvania in late March seeking to compel arbitration in accordance with a contract the parties had entered into in 2008.
According to the complaint, the contract stipulated that "any dispute or difference of any kind whatsoever" arising between the parties in connection with the contract would be "referred to and finally settled by arbitration under the Rules of Conciliation and Arbitration of the International Chamber of Commerce," [Rules] and that "[t]he place of arbitration shall be the Court of Arbitration of the Zurich Chamber of Commerce" [Zurich court] in Switzerland.
According to the complaint, the parties agreed that Teichmann would perform various services for Caspian, which at the time was named Evrosteklo.
The contract was prepared in English and translated into Russian. It provided a clause, however, stipulating that conflicting terms would be governed by the English-language version.
The relationship between the two companies began to fizzle in late 2008 when Caspian was unable to provide a second letter of credit by the deadline. This resulted in a delay of certain services that Teichmann was supposed to perform.
The parties met in November 2010 to discuss the delay. The meeting culminated in an agreement by the companies to amend the contract. However, according to the complaint Caspian ultimately refused to execute the documents containing the requested amendments, thus putting a hold on Teichmann's work.
Teichmann initially advised Caspian in August 2011 that it was unable to perform the remainder of its services in accordance with the contract, according to the complaint.
The following month, Caspian advised Teichmann that the contract had ended, which Teichmann agreed with. The two then began to dispute who owed whom in light of the failure of the contract. Specifically, Caspian sought reimbursement for certain payments it had made to Teichmann, referencing the Russian translation of the contract.
In October 2011, Teichmann asserted the supremacy of the English version of the contract in responding that it had performed its obligations properly and was entitled to all payments that had been made, adding that it would pursue additional money for Caspian's alleged breach of contract.
According to the complaint, nothing happened until spring 2013, at which point Caspian let Teichmann know of its intent to launch a claim against Caspian with the Arbitration Court of the Republic of Dagestan, in accordance with the Arbitrational Procedural Code of the Russian Federation.
Teichmann responded by reminding Caspian that they had agreed to refer any disputes arising from the contract to the Zurich arbitration in accordance with the Rules. It further denied Caspian's claims against it.
Teichmann then launched proceedings in Pennsylvania declaring that any contract dispute between the companies should be dealt with by the Zurich court in accordance with the Rules. Among other things, Teichmann further requested that the court enjoin Caspian from litigating or arbitrating its action in Dagestan.
According to the judgment issued earlier this month, the latter request was granted. In addition to enjoining Caspian from pursuing proceedings in the case in Dagestan, the court ordered an award of $1,108.40 in favor of Teichmann to cover the cost of legal proceedings.