Huaxintong International Investment Management Limited v. Hongkun USA Investment LLC
1:24-cv-08003
| S.D.N.Y. | Aug 1, 2025Background
- Plaintiffs Huaxintong International Investment Management Limited and New Asia (China) International Group Company Limited, both non-U.S. entities, entered into four loan agreements with U.S. subsidiaries of Hongkun Group to fund U.S. real estate projects.
- Between 2019 and 2020, the parties formalized these agreements, which included arbitration clauses mandating dispute resolution through the Hong Kong International Arbitration Centre (HKIAC).
- When defendants failed to repay the loans as demanded in 2020-2021, plaintiffs initiated arbitration in Hong Kong and prevailed on all claims in March 2024, securing a substantial monetary award with ongoing liquidated damages.
- The arbitration panel determined Hongkun USA Real Estate Holdings LLC was jointly and severally liable for all obligations under the loans.
- Defendants did not participate in the federal court proceedings in New York to confirm the arbitration award; the action was brought under the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal court has jurisdiction to confirm the award | Loan agreements meet Convention criteria; timely petition | Did not oppose | Yes, jurisdiction proper |
| Whether arbitration award should be confirmed under Convention | Award meets all requirements; no valid defenses available | Did not oppose; previously contested damages and interest | Award confirmed |
| Validity of damages and liquidated damages provisions | Damages/interest were agreed and not unconscionable | Sought to reduce interest/liquidated damages | Tribunal’s damages confirmed |
| Joint and several liability of Hongkun Real Estate | Real Estate entity liable per arbitration findings | Contested at arbitration, not in court | Liability confirmed |
Key Cases Cited
- Zeiler v. Deitsch, 500 F.3d 157 (2d Cir. 2007) (explaining limited review and summary nature of confirmation under the Convention)
- Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica, Inc., 403 F.3d 85 (2d Cir. 2005) (describing the exclusive grounds for refusing recognition under Article V of the New York Convention)
- Scandinavian Reinsurance Co. Ltd. v. Saint Paul Fire & Marine Ins. Co., 668 F.3d 60 (2d Cir. 2012) (federal jurisdiction for actions under the New York Convention)
- D.H. Blair & Co., Inc. v. Gottdiener, 462 F.3d 95 (2d Cir. 2006) (confirmation treated as akin to summary judgment proceeding)
- Yusuf Ahmed Alghanim & Sons, W.L.L. v. Toys "R" Us, Inc., 126 F.3d 15 (2d Cir. 1997) (district court's review limited to Convention defenses)