Seller’s Motion to Remand Vacatur Petition to State Court Is ‘Misguided,’ Says Amazon
The U.S. District Court for Southern New York in Manhattan should deny the “misguided” and “baseless” motion of Amazon third-party seller Shenzhen Zongheng Domain Network to remand its petition to vacate a $508,000 arbitration award in Amazon’s favor to New York Supreme Court where the petition originated (see 2305080023), said Amazon’s memorandum of law Monday (docket 1:23-cv-03054) in support of its opposition.
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Amazon is refusing to disburse the sales proceeds to Zongheng after finding the seller was “manipulating customer product reviews to artificially and deceptively inflate the perceived value of the goods it was selling in the Amazon store.” The arbitration award is governed by the New York Convention because Zongheng is a foreign company, and Chapter 2 of the Federal Arbitration Act “confers subject matter jurisdiction over actions to confirm or vacate arbitration awards governed by the New York Convention,” said Amazon’s memorandum.
The Southern District of New York also has diversity jurisdiction, and the parties in the action “are completely diverse,” said the memorandum. Zongheng’s remand motion is “a confused grab bag of irrelevant arguments and authority,” and provides no basis to avoid the court’s “clear jurisdiction,” it said.
Zongheng wrongly argues Washington state law governs the contract between the parties and the American Arbitration Association’s procedural rules applied to the arbitration, so the award is “wholly domestic” and the New York Convention doesn’t apply, said the memorandum. The argument ignores binding 2nd Circuit precedent, under which the New York Convention and Title 9 “provide federal subject matter jurisdiction over any vacatur action if at least one party to the arbitration was not a United States citizen, as is undisputedly the case with Zongheng,” it said.
Zongheng’s “confusing” argument that the court may not “look through” its petition to find a basis for federal jurisdiction is “specious,” said the memorandum. There’s no need to “look through” Zongheng’s petition to the underlying arbitration award or proceedings, it said. “On its face,” the petition establishes that this was an international arbitration award entered in the U.S., and the amount in controversy exceeds $75,000, it said. Zongheng “expressly requests” that the court order Amazon to pay hundreds of thousands of dollars in damages, it said.