(a) He will make best efforts to remain at all times a permanent resident of Cuba;
(b) Unless and until such time as a change in title occurs under Section 3.3, he will remain at all times the title holder in the Property and the Property Rights and will fully protect all the title and rights (held in his name and on behalf of and for the benefit of the Company) in the Property and the Property Rights;
(c) That the certified translations in English of the documentation referred to Section 3.2 is a true and correct translation of the official Cuban documentation in Spanish referred to in that Section;
(d) That all actions taken with respect to the Property and Property Rights and all actions by or on behalf of the Company generally will comply fully and at all times with U.S. and Cuban law, including without limitation, the U.S.'s Cuban Assets Control Regulations ... .
(Agreement, Article 9.2 (a) through (d).)
6.1 Management of the Company
(a) The Company shall be managed by its Members who shall act jointly in all matters.
(b) David Schorr has full Power of Attorney to act on behalf of Mrs. Schorr in all respects under this Agreement.
(Agreement, Article 6.1.)
Notwithstanding anything to the contrary set forth in this Agreement, in the event that a dispute shall arise over any material matter and the Members are unable to resolve such dispute within 30 days after written notice from either Member that such dispute exists, then either Member may cause the Company to be dissolved under the terms of this Article VIII.
(Agreement, Article 8.2.)
Upon dissolution of the Company, the Company shall take full account of the Company's assets and liabilities and the assets shall be liquidated as promptly as is consistent with obtaining the fair market value thereof and as shall be necessary to timely make the distributions below described, and the net proceeds therefrom shall be applied and distributed in the following order:
(a) to the payment of the expenses of liquidation and the debts and liabilities of the Company;
(b) to the setting up of any reserves that the Company may deem necessary or desirable for any contingent or unforeseen liabilities or obligations of the Company, which reserves shall be held for a period to be determined by the Company, at the expiration of which period the balance of such reserves shall be distributed in the order of priority herein; and
(c) to the Members in accordance with Section 5.4.
(Agreement, Article 8.3.)
11.5 Arbitration (a) Any controversy or claim arising out of or relating to this Agreement, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgement on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
(b) Claims shall be heard by a single arbitrator, unless the claim amount exceeds $500,000, in which case the dispute shall be heard by a panel of three arbitrators. The place of arbitration shall be New York County, State of New York. The arbitration shall be governed by the laws of the State of New York. Hearings will take place pursuant to the standard procedures of the Commercial Arbitration Rules that contemplate in-person hearings. The arbitrators will have no authority to award punitive or other damages not measured by the prevailing party's actual damages, except as may be required by statute. The arbitrators may determine how the costs and expenses of the arbitration shall be allocated between the parties, but they shall not award attorneys' fees. Except as may be required by law, neither party nor an arbitrator may disclose the existence, content, or results of any arbitration hereunder without the prior written consent of both parties. The parties agree that failure or refusal of a party to pay his/her required share of the deposits for arbitrator compensation or administrative charges shall constitute a waiver by that party to present evidence or cross-examine witness. In such event, the other party shall be required to present evidence and legal argument as the arbitrator(s) may require for the making of an award. Such waiver shall not allow for a default judgment against the non-paying party in the absence of evidence presented as provided for above.
(Agreement, Article 11.5)
Mr. Schorr: No. As I said previously, I am fine with selling our interest in the Company, but not at such a low price.
Respondent: Then get off your lazy ass and find another buyer or come back with a reasonable counter-offer to my compromise proposal.
Mr. Schorr: I think that we're going in circles here. When the time comes, we will deal with any issues in arbitration. I think that's where we will have to leave things for the time being.
Respondent: Well, if you and your mother have definitely decided that you are not even going to bother to look for another buyer, there is no reason for me to wait to execute the sale until April 14, right? If this is the case, I will move to enact the sale while I am still here in Cuba. You can take whatever action you want.
(Id. at 26) (emphasis in original).
(b) All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury (or any person, agency, or instrumentality designated by him) by means of regulations, rulings, instructions, licenses, or otherwise, if such transactions involve property in which any foreign country designated under this part, or any national thereof, has at any time on or since the effective date of this section had any interest of any nature whatsoever, direct or indirect:
(1) All dealings in, including, without limitation, transfers, withdrawals, or exportations of, any property or evidences of indebtedness or evidences of ownership of property by any person subject to the jurisdiction of the United States; and
(2) All transfers outside the United States with regard to any property or property interest subject to the jurisdiction of the United States.
(c) Any transaction for the purpose or which has the effect of evading or avoiding any of the prohibitions set forth in paragraph (a) or (b) of this section is hereby prohibited.
(31 C.F.R. § 515.201 (2019).)
[t]he Emergency Arbitrator in this matter has a threshold obligation to examine the charges of a conflict with attorney Schorr.
* * *
However, if you continue to refuse to accept the Emergency Arbitrator's threshold obligation on these charges, and do not suspend proceedings until these obligations are met, it is the respondent's psoition [sic] that this would escalate from an error of legal judgment to an act of bad faith warranting your inmediate disqualification [sic].
(E-mail from Respondent to the Emergency Arbitrator, dated March 5.)
When the trial court knows or reasonably should know of the possibility of a conflict of interest, it has a threshold obligation to determine whether the attorney has an actual conflict, a potential conflict, or no conflict... . In fulfilling this initial obligation to inquire into the existence of a conflict of interest, the trial court may rely on counsel's representations... . If a district court ignores a possible conflict and does not conduct this initial inquiry, reversal of a defendant's conviction is automatic. (Id. at 153 (citations omitted).)
• Claimant's request for a preliminary injunction, enjoining Respondent from selling the Property and Property Rights is granted, and Respondent is enjoined from taking any steps, or allowing anyone acting on his behalf to take any steps, to consummate a sale.
• Claimant's request for an order directing Respondent to divulge the current status of the assets, or to restore the assets to the Company is denied.
• Claimant's request for a confidentiality order is granted to the extent that Procedural Order No. 2 shall remain in effect until the Tribunal is appointed and has an opportunity to rule on the need for confidentiality measures of protection.
• Respondent's request for a confidentiality order is granted to the extent that Procedural Order No. 2 shall remain in effect until the Tribunal is appointed and has an opportunity to rule on the need for confidentiality measures of protection.
• Respondent's request for an order directing Claimant to cooperate in the company's winding down is denied.
• The Emergency Arbitrator's compensation and expenses and the ICDR's administrative fees and expenses in connection with this application for emergency measures of protection shall be borne equally between Claimant and Respondent, subject to the power of the main tribunal, once appointed, to determine finally the appropriate apportionment in the Final Award;
• All other requests for emergency measures are denied.
Date March 16, 2020
Place of Arbitration: New York, NY
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