Ornela Cere v. Subway International B.V., Index No. 111998/2010 (N.Y. Sup.Ct. Aug. 2011), is a brief and lucid discussion by a New York state court of first instance of an important issue in international litigation practice. Cere and Subway had a dispute involving a Subway restaurant in Athens, Greece. Their agreement called for New York City arbitration under the aegis of the International Centre for Dispute Resolution. The arbitrator found the franchise agreement terminated and awarded the bulk of the monetary award to Cere.
Cere filed a state court proceeding seeking to vacate the arbitral award but served Subway with process in a defective manner, and the substituted process was served after the 90-day period for moving to vacate arbitral awards. Held the Court, the 90-day period begins to run on the date of “delivery to the party or party’s counsel” — that is, the day the party or an agent receives the decision. The Court also held that the substituted service did not relate back, and the 90-day limitations period did not toll. Accordingly, Cere’s efforts to vacate the award were untimely, and the Court found that it lacked jurisdiction over Subway as a result. The Court did not explain why it needed to treat the defect as one of the absence of personal jurisdiction as opposed to any number of other ways to find that the defective service did not state a claim, etc.
The Court, however, sais that all was not lost by the petitioner. She “may still have her day in court”, said the Court, because:
Even though the 90 day period to move to vacate has expired, Petitioner will have the opportunity to make her arguments for vacating the award when Respondent moves to confirm the award”.
The Court did not explain what would occur if the party in Subway’s position did not for some reason need to confirm the award, but was able or content to let it sit.
The decision teaches international litigation and dispute resolution practitioners several things, including the important role of the corporate lawyer or draftsman, which could have specified how confirmation service was to be effectuated, etc.