APR Energy, LLC v. First Inv. Grp. Corp.

• Decision Date: 20 February 2015
• Docket Number: Case No. 3:14–cv–575–J–34JBT.
• Citation: 88 F.Supp.3d 1300
• Parties: APR ENERGY, LLC, a Florida limited liability company, Plaintiff, v. FIRST INVESTMENT GROUP CORPORATION, a foreign corporation; and First Engineering Group a/k/a 1st Engineering Group, a foreign corporation, Defendants.
• Court: U.S. District Court — Middle District of Florida

88 F.Supp.3d 1300

APR ENERGY, LLC, a Florida limited liability company, Plaintiff

v.FIRST INVESTMENT GROUP CORPORATION, a foreign corporation; and First Engineering Group a/k/a 1st Engineering Group, a foreign corporation, Defendants.

Case No. 3:14–cv–575–J–34JBT.

United States District Court, M.D. Florida, Jacksonville Division.

Signed Feb. 20, 2015.

Arturo Carlos Martinez, Harold E. Patricoff, Shutts & Bowen, LLP, Miami, FL, Michael J. Korn, Korn & Zehmer, PA, Jacksonville, FL, for Plaintiff.

Adam J. Hodkin, Padula Hodkin, PLLC, Boca Raton, FL, for Defendants.

ORDER

MARCIA MORALES HOWARD, District Judge.

THIS CAUSE came before the Court on Plaintiff, APR Energy, LLC's Verified Motion for Expedited Hearing and Preliminary Injunction Barring Defendant's from Pursuing Libyan Proceeding in Contravention of Arbitration Agreement (Doc. 3; Motion) filed on May 19, 2014; Defendants' First Investment Group Corporation's and First Engineering Group's Verified Response Opposing Plaintiff's Motion for Preliminary Injunction (Doc. 15; Response)¹ filed on June 6, 2014; APR's Reply in Support of its Verified Motion for Expedited Hearing and Preliminary Injunction Barring Defendants from Pursuing Libyan Proceeding in Contravention of Arbitration Agreement (Doc. 16; Reply) filed on June 11, 2014; Defendants First Investment Group Corporation and First Engineering Group's Supplement to Verified Response Opposing Plaintiff's Motion for Preliminary Injunction (Doc. 28; Supplemental Response) filed on August 1, 2014; and APR's Supplemental Memorandum in Support of its Verified Motion for Expedited Hearing and Preliminary Injunction Barring Defendants from Pursuing Libyan Proceeding in Contravention of Arbitration Agreement (Doc. 30; Supplemental Memorandum) filed on August 1, 2014. In addition, Defendants have filed Defendants' Amended Motion for Stay Pending Appeal and/or for Reconsideration (Doc. 40; Motion for Reconsideration) and Plaintiff filed APR's Memorandum in Opposition to Defendants' Amended Motion for a Stay Pending Appeal and/or Reconsideration (Doc. 42; Reconsideration Response).

I. Background and Procedural History

Plaintiff APR Energy, LLC (APR) develops and operates energy-generating plants and provides electrical power to retailers or end-consumers of electric power. See Services Agreement at 1 (Doc. 1–1; Services Agreement). Wishing to establish and operate a thermal power plant project in Libya, APR entered into the Services Agreement with Defendant First Investment Group Corporation (FIGCorp) and FIGCorp's subsidiary Defendant First Engineering Group (FEG) (collectively, FIG/FEG or Defendants) on January 30, 2013.² Id.; Motion ¶ 3. Under the Services Agreement, FEG agreed to provide consulting services to APR, and both FEG and FIGCorp were to receive payment for those services from APR. See Services Agreement 1, 17; see also Affidavit of Irene Dallas in Support of Defendants' Response Opposing Motion for Preliminary Injunction ¶ 12 (Doc. 28–1; Dallas Aff.).³ According to Defendants, they helped APR or another APR entity,⁴ reach an agreement with General Electricity Company of Libya (GECOL) to provide electric power capacity, and that an APR entity and GECOL entered into a contract for provision of such on or about March 14, 2013. Response ¶ 5; see also Services Agreement at 1. The GECOL project contract which includes the installation, commissioning and operation of temporary power generation facilities at four sites is purportedly valued at $147,780,100. Response ¶ 6. Under the Services Agreement, APR is required to pay Defendants “an amount equal to 8% of the actual amount paid to APR by [GECOL],” and these payments are to be made “in installments fifteen (15) business days after APR receives payment from [GECOL],” provided that APR has provided an invoice to GECOL and APR has received payment of such an invoice from GECOL. Services Agreement at 17; Complaint ¶ 13.⁵

On March 31, 2014, Defendants' counsel wrote to APR regarding APR's alleged failure to pay Defendants in breach of the Services Agreement (Doc. 1–2; March 31, 2014 Letter). The letter states that Defendants instructed their counsel to commence arbitration proceedings in accordance with Clause⁶ 10(a) of the Services Agreement, and to make an application, pursuant to Clause 10(h) of the Services Agreement, to the Court in Tripoli “for an order to prevent the payment of any further sums to you by GECOL until this dispute is resolved.” See March 31, 2014 Letter. Clause 10 of the Services Agreement states: “Except as provided in Section 15 below,^{[ 7 ]} any dispute which arises under this Agreement shall be resolved by submittal to binding arbitration pursuant to the International Arbitration Rules of the International Center for Dispute Resolution of the International Chamber of Commerce (the “ICC”) [.]” Services Agreement at 5. Clause 10(h) of the Services Agreement provides a narrow exception to the parties' duty to arbitrate:

The parties reserve the right to refer to a court of competent jurisdiction all preliminary injunction suits, if necessary to obtain legal measures intended to protect their rights prior to or during the arbitration, and such measures shall not be considered a waiver or violation of the arbitration; provided that, such judicial relief: (i) is limited to that which is required to prevent imminent damage to a party; and (ii) does not resolve the merits or substance of such Dispute. In the event that the Service Provider or the Principals shall commit or cause to commit a breach of this Agreement (including but not limited to the provisions of Sections 5–8 hereof), then in such event, each of the Service Provider and the Principals hereby consents to the granting of a temporary or permanent injunction against it, him or her by any court of competent jurisdiction prohibiting it, him or her from violating any provision of this Agreement, without the necessity of having to post any bond therefor. In any proceeding for an injunction and upon any motion for a temporary or permanent injunction, each of Service Provider and the Principals agrees that its, his or her ability to answer in damages shall not be a bar or interposed as a defense to the granting of such temporary or permanent injunction against each of the Service Provider and the Principals. Each of the Service Provider and the Principals further agrees that APR will not have an adequate remedy at law in the event of any breach by the Service Provider or the Principals and that APR will suffer irreparable damage and injury if any of the Service Provider or the Principals breaches any of the provisions of this Agreement.

Id. at 6.

APR initiated the instant action on May 19, 2014, by filing a Complaint in which it alleges that Defendants breached the parties' Services Agreement through FEG's substandard and unsatisfactory performance of the agreed-upon consulting services. Complaint ¶ 14. APR acknowledges that Defendants advised APR they intended to commence arbitration proceedings as required by the Services Agreement due to APR's non-payment, but also complains that Defendants threatened to initiate litigation in Libya, seeking an order to prevent any further payment to APR by GECOL. Id. ¶ 16. Additionally, APR asserts that Defendants had not commenced arbitration proceedings, had no intent to do so, and instead intend to initiate legal proceedings in Libya, which APR alleges would be prohibited by the Services Agreement. Id. ¶¶ 17–20. In conjunction with the Complaint, APR filed the Motion in which it requests that the Court “(a) enter an Order compelling the Defendants to submit the dispute which Defendants have threatened to litigate in Libya to binding arbitration, as agreed upon in the Agreement, and (b) enjoin the Defendants from pursuing” legal proceedings in Libya. Motion ¶ 13; see also Complaint ¶ 22.

On May 22, 2014, the Court entered an order setting a briefing schedule and a hearing for consideration of the Motion for June 17, 2014 (Doc. 7). On or about May 22, 2014, Defendants initiated an ICC arbitration against APR, Response ¶ 10,⁸ and on or about May 23, 2014, FEG initiated legal proceedings against APR and GECOL in Libya (the “Libyan Proceeding”)⁹ by submitting an application to the Libyan court requesting that 8% of the value of APR's contract with GECOL “remain on precautionary hold with GECOL,” see Libyan Application at 10 (Doc. 15–3; Libyan Application)¹⁰ ; see also Response ¶ 12 (“In the Libyan Application the parties are APR, FEG and GECOL.”). On June 2, 2014,¹¹ after Defendants had requested and received an extension of time to respond to the Motion (Docs. 10, 11), but before Defendants had responded, the Libyan court issued an order placing a “precautionary hold on APR's dues with GECOL, as fulfillment of the debts of the plaintiff company [FEG] representing 8% of the one hundred million U.S. dollars paid to APR” and setting a hearing for June 17, 2014 (Doc. 15–4; Libyan Order).¹² Also on June 2, 2014, Defendants' counsel informed APR that Defendants “made an application to the Tripoli Court for an order that GECOL withhold USD 8 million ^{[ 13 ]} from GECOL's next payment to [APR],” that they “are now in the process of arranging service of this Order on GECOL [,]” and that “a return date for the inter-parties hearing in Tripoli has been scheduled for 17 June 2014” (Doc. 12–2; June 2, 2014 Letter).

Defendants' June 2, 2014 Letter prompted APR to file APR's Emergency Motion for Temporary Restraining Order And/Or Preliminary Injunction with Notice to Defendants (Doc. 12; Motion for TRO). In the Motion for TRO, APR sought a temporary restraining order from this Court “to preclude the Defendants from taking any action pursuant to the Libyan proceedings, including serving GECOL with the alleged order, and directing Defendants to dismiss any such proceedings.” Motion for TRO ¶ 6. The Court construed the relief sought by APR in the Motion for TRO as a request for an...