14-3906-cv
VRG Linhas Aereas S/A v. MatlinPatterson Global Opportunities Partners II L.P., et al.

                                  UNITED STATES COURT OF APPEALS
                                     FOR THE SECOND CIRCUIT

                                          SUMMARY ORDER
Rulings by summary order do not have precedential effect. Citation to a summary order filed
on or after January 1, 2007, is permitted and is governed by Federal Rule of Appellate
Procedure 32.1 and this Court’s Local Rule 32.1.1. When citing a summary order in a
document filed with this Court, a party must cite either the Federal Appendix or an
electronic database (with the notation “summary order”). A party citing a summary order
must serve a copy of it on any party not represented by counsel.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 1st day of July, two thousand fifteen.

PRESENT:           JOSÉ A. CABRANES,
                   ROSEMARY S. POOLER,
                   DENNY CHIN,
                                Circuit Judges.


VRG LINHAS AEREAS S/A,

                             Petitioner-Appellant,

                             v.                                                          No. 14-3906-cv

MATLINPATTERSON GLOBAL OPPORTUNITIES
PARTNERS II L.P., MATLINPATTERSON GLOBAL
OPPORTUNITIES PARTNERS (CAYMAN) II, L.P.,

                             Respondents-Appellees.
FOR PETITIONER-APPELLANT:                               DONALD FRANCIS DONOVAN (Carl J.
                                                        Micarelli, Terra L. Gearhart-Serna, Natalie J.
                                                        Lockwood, on the brief), Debevoise &
                                                        Plimpton LLP, New York, NY.

FOR RESPONDENTS-APPELLEES:                              ROBERT H. SMIT (Tyler B. Robinson, Joshua
                                                        M. Slocum, William Pilon, on the brief),
                                                        Simpson Thacher & Bartlett LLP, New York,
                                                        NY.

       Appeal from an October 2, 2014 judgment of the United States District Court for the
Southern District of New York (Miriam Goldman Cedarbaum, Judge).

     UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment of the District Court be and hereby is
AFFIRMED.

        Before us is the second appeal taken by Petitioner-Appellant VRG Linhas Aereas S.A.
(“VRG”) in an effort, thus far unsuccessful, to confirm in U.S. courts an arbitral award issued by a
Arbitral Tribunal in Brazil against Respondents-Appellees MatlinPatterson Global Opportunities
Partners II L.P. and MatlinPatterson Global Opportunities Partners (Cayman) II L.P. (collectively,
“MatlinPatterson”).

        We assume the parties’ familiarity with the underlying facts, procedural history of the case,
and issues on appeal, and we recite here only those facts most relevant to the resolution of this
appeal. This case arose out of the 2007 acquisition of VRG by a Brazilian corporation from two of
MatlinPatterson’s indirect subsidiaries, by means of a Purchase and Sale Agreement (“PSA”), which,
notably, MatlinPatterson did not sign. MatlinPatterson did simultaneously execute a one-page letter
agreement, known as Addendum 5, by which it agreed not to compete with VRG for a period of
three years. When a dispute arose shortly thereafter regarding a purchase price adjustment provision
in the PSA, VRG referred the dispute to arbitration and named MatlinPatterson a party, over its
objections. Ultimately, a three-member Arbitral Tribunal found that MatlinPatterson had agreed to
arbitrate all issues arising under the PSA, including the parties’ purchase price dispute, and issued an
award holding MatlinPatterson liable for what the arbitrators characterized as fraudulent
misrepresentations to VRG. Brazilian courts later denied MatlinPatterson’s successive attempts to
vacate the arbitral award.

         When VRG sought to confirm the award here pursuant to the New York Convention, the
District Court denied enforcement on the grounds that, even assuming for the sake of argument that
MatlinPatterson had agreed to arbitrate disputes over its non-compete agreement, it had not agreed
to arbitrate the purchase price issue, which arose under the PSA it did not sign. On an initial appeal,
this Court vacated and remanded. VRG Linhas Aereas S.A. v. MatlinPatterson Global Opportunites


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Partners II L.P., 717 F.3d 322 (2d Cir. 2013). We instructed that the District Court must decide the
issue it had previously assumed—that is, “whether the parties actually reached an agreement to
arbitrate . . . .” Id. at 326. We further instructed that such an agreement could only be found if the
District Court determined that the parties “clearly and unmistakably committed to arbitrate
questions of arbitrability.” Id. Given the contractual circumstances of this case, we explained that, if
MatlinPatterson had agreed to be bound by the terms of the arbitration clause appearing at Section
14 of the PSA, the District Court would be required to confirm the arbitral award. Conversely, if
MatlinPatterson had not agreed to the terms of PSA Section 14, the District Court would be
compelled to deny VRG’s petition. On remand, the District Court found that MatlinPatterson had
not agreed to the terms of Section 14, and thus denied VRG’s petition to confirm the award. This
second appeal followed.

        We review a district court’s legal interpretations of the New York Convention as well as its
contract interpretation de novo, and review findings of fact for clear error. VRG Linhas Aereas S.A.,
717 F.3d at 325 (citations omitted). Though VRG contends, once again, that the District Court
erred by failing to directly enforce or give preclusive effect to the judgments of the Brazilian courts,
we have already decided that the threshold issues of arbitrability arising here are “question[s] to be
decided under United States arbitration law.” Id. (citing Sarhank Grp. v. Oracle Corp., 404 F.3d 657,
659 (2d Cir. 2005)).

         Upon review, we affirm the District Court’s holding that MatlinPatterson did not agree to
the terms of Section 14 of the PSA. As the District Court found, MatlinPatterson signed only
Addendum 5, a separate letter agreement containing a single non-compete obligation. J.A. 169.
Though it mentions the PSA in the subject line and once again in the text, Addendum 5 does not
expressly incorporate the entirety of the PSA’s terms. Rather, by its terms, Addendum 5 is itself an
“instrument [that] shall constitute pursuant to the best terms of the law a firm and valid
commitment.” Id. Notably, Addendum 5 refers only to a single specific provision in the PSA—the
non-compete clause. Where, as here, the parties to an agreement choose to cite in the operative
contract “only a specific portion” of another agreement, we apply “the well-established rule that ‘a
reference by the contracting parties to an extraneous writing for a particular purpose makes it part of
their agreement only for the purpose specified.’” Lodges 743 & 1746, Int’l Ass’n of Machinists &
Aerospace Workers v. United Aircraft Corp., 532 F.2d 422, 441 (2d Cir. 1975) (quoting Guerini Stone Co. v.
P. J. Carlin Constr. Co., 240 U.S. 264, 277 (1916)). Further, because Addendum 5 actually restates the
referenced non-compete provision in full within its own text, it functions as a self-contained, stand-
alone agreement, without requiring separate consultation of the PSA.

       Because Addendum 5 contains no arbitration clause of its own, and because it does not
incorporate the PSA’s arbitration clause within Section 14, we conclude, like the District Court, that
MatlinPatterson did not agree to arbitrate. In the absence of any threshold arbitration agreement,



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and in accordance with the calculus set forth in our prior decision, we affirm the District Court’s
judgment denying VRG’s petition to confirm the arbitral award.

                                          CONCLUSION

       We have considered all of the remaining arguments raised by VRG on appeal and find them
to be without merit. For the foregoing reasons, we AFFIRM the judgment of the District Court.


                                                       FOR THE COURT:
                                                       Catherine O’Hagan Wolfe, Clerk




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