“Arbitration,” “Collateral Estoppel,” and “Waiver”
In Zhejiang Topoint Photovoltaic Co, Ltd v. G&S Solar Installers, the United States District Court for the District of New Jersey granted a motion to confirm an arbitration award. In the case, the parties’ arbitration clause was subject to New Jersey law. The petitioner entered bankruptcy in China, opened a corresponding chapter 15 proceeding in the United States, and initiated an adversary proceeding against the respondent. In the adversary proceeding, the respondent moved the bankruptcy court to enforce the arbitration clause. The bankruptcy court granted the motion, and an arbitrator rendered a final award in favor of the petitioner. Then, the respondent moved the bankruptcy court to vacate the award on the grounds that Chinese bankruptcy stripped the arbitrator of his jurisdiction, because it required all claims related to a bankruptcy estate to be heard by the domestic court overseeing the reorganization. After seeking guidance from the Chinese court, the bankruptcy court determined it had jurisdiction to refer the dispute to arbitration. As such, the district court held the arbitrator was empowered to render the award. Further, the district court concluded the respondent was collaterally estopped from seeking to vacate the arbitrator’s award because the respondent had previously failed to litigate the arbitrability issue, rather it sought to enforce the arbitration provision when the issue was before the bankruptcy court. Therefore, the district court held that the respondent waived its objection to an arbitration.