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Inzajat Technology Fund, B.S.C v. Hamid Najafi


March 9, 2012


The opinion of the court was delivered by: Howard R. Lloyd United States Magistrate Judge

** E-filed March 9, 2012 **



United States District Court For the Northern District of California

Plaintiff Inzajat Technology Fund, B.S.C. ("Inzajat") brought this action to enforce an 18 arbitration award entered in London between it and defendants Hamid Najafi and Michael 19 Cummiskey.*fn1 Inzajat is a Bahraini fixed term venture capital fund that sought to invest in Broadlink 20 Research FX LLC ("Broadlink"). Najafi, who currently resides in the United Arab Emirates, was the 21 chief executive officer of Broadlink at all times relevant to this action. 22 Inzajat petitioned the court for an order confirming the award, which this court granted on January 20, 2012. Dkt. No. 23. At the time the court entered its order, Inzajat had consented to the 24 undersigned's jurisdiction, but Najafi had not. Although he was served with the summons and 25 petition to confirm the arbitration award on August 25, 2011, Najafi did not oppose it and only filed 26 an appearance after this court had already entered its order. After his appearance, the court set a 27 deadline of March 5, 2012 for Najafi to consent to the undersigned's jurisdiction. He has not done 28 so. Because not all parties have consented to proceed before a magistrate judge, this court is unable 2 to provide the dispositive relief sought by plaintiffs. 3

Accordingly, because the court's order confirming the arbitration award was improvidently 4 issued, it is now VACATED, and the court ORDERS the Clerk of the Court to reassign this case to 5 a district court judge. For the reasons stated below, the undersigned RECOMMENDS that the 6 district judge confirm the arbitration award. 7 8 defendant's pending motion for a Stay of Enforcement of Judgment are VACATED. The parties 9 may renotice them before the to-be-assigned district judge. 10

A. Authority to Confirm a Foreign Arbitral Award

This court's authority to hear and rule on a petition to confirm a foreign arbitration award 13 arises under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the 14 "Convention"), implemented by the Federal Arbitration Act. 21 U.S.T. 2517; 9 U.S.C. 203 ("[a]n 15 action or proceeding falling under the Convention shall be deemed to arise under the laws and 16 treaties of the United States."). On application by a party to an arbitral award under the Convention, 17 the Federal Arbitration Act compels a court to issue "an order confirming the award as against any 18 other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for 19 refusal or deferral of recognition or enforcement of the award specified in the said Convention." 9. 20

Convention unless we determine that "one of the grounds for refusal or deferral of recognition or 22 enforcement of the award specified in the [sic] said Convention." Polimaster Ltd. v. RAE Sys., 623 23

The court must confirm the arbitration award unless one of the seven enumerated grounds 25 for refusal or deferral is established. See 21 U.S.T. 2517, Art. V. In his recently filed Motion to Stay 26

Enforcement of Judgment, Najafi has not raised any of the enumerated grounds for refusal to 27 confirm the award. Upon its own review of the possible rounds for refusal to confirm an award, this 28 court believes that none are applicable here. As the court is not aware of any evidence that there are

The March 20, 2012 hearings on plaintiff's pending motion for Entry of Judgment, and


U.S.C. § 207. [The Ninth Circuit] must confirm an arbitration award falling under the New York 21

F.3d 832, 835-836 (9th Cir. 2010) (quoting 9 U.S.C. § 207). 24

grounds for refusal or deferral of enforcement, it recommends that the district judge confirm the 2 arbitration award. 3

Hamid Najafi is a resident of the United Arab Emirates ("UAE") and was served with the 5 summons and petition in the UAE, but plaintiff alleges that he owns real property in this district. See 6

When subject matter jurisdiction is based on a federal question, the exercise of personal jurisdiction over a non-resident defendant must be authorized by a rule or statute and consistent with 9 the constitutional principles of due process. Fed. R. Civ. P. 4(k)(1)(A). Normally, quasi in rem 10 jurisdiction is not sufficient to establish the minimum contacts required for personal jurisdiction, but

"minimal contacts are not required for a court to exercise jurisdiction over assets to permit a party to collect on an arbitration award." CME Media Enters. B.V. v. Zelezny, 2001 U.S. Dist. LEXIS 13

B. Jurisdiction Over Najafi

Docket No. 19, Exh. 1 ("Dharwarkar Declaration"). 7

13888 (S.D.N.Y. Sept. 10, 2001); see also Glencore Grain, 284 F.3d at 1122 ("due process requires 14 that the district court have jurisdiction over the defendant against whom enforcement is sought or 15 his property") (emphasis added). 16

17 non-resident defendant. However, in an action to confirm or enforce an arbitration award, a court 18 may exercise jurisdiction over a non-resident defendant's property. Id. Accordingly, the undersigned 19 recommends that the district judge exercise jurisdiction over Najafi's property in the district, and, 20 enter an order confirming the award that is enforceable against Najafi's interest that property. 21

The Petition of Inzajat Technology Fund B.S.C. ("Inzajat") for an order confirming the arbitration award issued by Arbitrator James Evans on July 25, 2011 in the matter of Inzajat 24

IT IS HEREBY ORDERED THAT the Award is confirmed as to Respondent Hamid Najafi under Section 207 of the Federal Arbitration Act. Inzajat is entitled to costs of suit herein. Upon 27 confirmation of the Award, entry of judgment is warranted and such judgment shall be enforceable 28 against Dr. Najafi's equity in the following properties:

Typically, quasi in rem jurisdiction is insufficient to establish personal jurisdiction over a

C. Recommended Order to Confirm Arbitration Award

Technology Fund B.S.C. v. Najafi, et al., Case No. 15982/JEM/MLK/ARP (the "Award") is granted. 25

* 26646 Altamont Road, Los Altos Hills, California 94022 (County of Santa Clara)*fn2

* 6509 Lakeville Highway, Petaluma, California 94954 (County of Sonoma).*fn3

9 U.S.C. § 207. 4

Pursuant to Federal Rule of Civil Procedure 72(b), any party may serve and file objections to 5 this Report and Recommendation within fourteen days after being served. 6 7

Notice will be electronically mailed to: Dean Hansell Daniel Ballon 3 Jennifer Cabrera Brian Affrunti 4 Douglas Dal Cielo 5 Counsel are responsible for distributing copies of this document to co-counsel who have not registered for e-filing under the court's CM/ECF program.

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