$77M ICC Arbitration Award Ignored, Plaintiffs Say
An International Chamber of Commerce arbitration panel ultimately ordered Kino to pay more than $77 million in damages. But the operators say Enel shirked its separate guaranty obligations and refused to honor the award—prompting them to sue in December 2023.
Trial Court Sided with Enel — Until Now
In December 2024, New York County Supreme Court Justice Melissa Crane dismissed the case, agreeing with Enel that the guaranty notification period had ended. She also determined the agreements allowed enforcement without requiring plaintiffs to pursue Kino first.
But the appeals court highlighted another clause that, it said, may create an exception for guaranty enforcement while arbitration was pending. That clause referenced dispute-resolution provisions in the construction contracts—linking the guaranty obligations directly to the arbitration timeline.
That interpretive possibility was enough to revive the suit.
Good-Faith Claim Rejected; No Corporate Veil Piercing
The appellate judges upheld dismissal of the operators’ claim that Enel breached an implied duty of good faith by causing delays in calculating facility performance. The panel said allegations fell short of showing misconduct like commingled funds or fraudulent transfers—conduct necessary to pierce the corporate veil and hold Enel responsible for its subsidiaries’ actions.
“Plaintiffs failed to allege anything more than that defendant owned the majority of its contractor subsidiary’s stock and that the subsidiary was thinly capitalized,” the panel noted.
The panel included Justices Troy K. Webber, Saliann Scarpulla, David Friedman, Julio Rodriguez III and Margaret A. Chan of the Appellate Division, First Department.
Representatives for both sides did not immediately respond to requests for comment.
