Subway International v. Bletas
Res judicata may not constitute a defense to confirmation of an arbitration award, if a previous arbitration involved a separate franchise agreement that, pursuant to the terms of the contract, could not have been arbitrated at the same time. The plaintiff, Subway International, pursued arbitration claims against the defendant, Panayota Bletas, of Athens, Greece, and requested that the District Court affirm the arbitration award. The District Court granted Subway's application to confirm. The pro se defendant appealed and argued 1.) the District Court lacked personal jurisdiction, because she did not receive proper service of process; 2.) res judicata barred the arbitration award; and 3.) the arbitration award violates public policy. Lack of personal jurisdiction is a defense that can be waived, if the defendant fails to assert it. Allegedly, the defendant participated in a settlement conference and filed motions, prior to claiming that the court lacked jurisdiction. The 2nd Circuit held that the District Court did not abuse its discretion, when it concluded that the defendant waived the defense of lack of personal jurisdiction. Res judicata did not constitute a defense, because claims asserted at arbitration could not have been raised in a previous arbitration. "As the district court ably explained," wrote the 2nd Circuit, "the two arbitration proceedings involved separate franchise agreements that, per the terms of the agreements, could not have been arbitrated in the same proceeding." The 2nd Circuit reviewed findings of fact for clear error and conclusions of law de novo and concluded that the defendant's appeal lacked merit. The 2nd Circuit refused to consider arguments raised for the first time on appeal. The 2nd Circuit affirmed the judgment of the District Court, Hall, J. Michael Kenny, Aaron S. Bayer and Bethany L. Appleby represented Subway International, and Panayota Bletas represented herself.