Context Matters: Post-Arbitration Award Discovery Based on Fraud Under CPLR 408

By: Jeffrey M. Haber

New York limits judicial intrusion into arbitration awards, reflecting the core principles of finality, deference to arbitrators’ rulings, and the narrow grounds for vacatur under CPLR 7511. In Shell NA LNG LLC v. Venture Global Calcasieu Pass, LLC, 2026 N.Y. Slip Op. 50385(U) (Sup. Ct., N.Y. County Mar. 2, 2026), the Supreme Court reinforced those principles by denying post‑award discovery sought under CPLR 408. Shell attempted to relitigate discovery requests the arbitral tribunal had already considered and rejected, arguing that further disclosure was needed to support a claim of fraud or misconduct. The motion court held that CPLR 408 discovery in a vacatur proceeding was rare and context‑specific, and it could not be used to second‑guess an arbitral tribunal’s discovery decisions based on speculation. Absent clear and convincing evidence demonstrating fraud that could not have been uncovered during an arbitration, the motion court made clear that courts will not permit post‑award discovery or disturb the award’s confirmation.

Shell NA LNG LLC v. Venture Global Calcasieu Pass, LLC

Petitioner, Shell NA LNG LLC (“Shell”), and Respondent Venture Global Calcasieu Pass, LLC (U.S.A.) (“VGCP”) entered into an Amended and Restated LNG Sales and Purchase Agreement on April 4, 2018 (the “SPA”), pursuant to which VGCP agreed to make available, and Shell agreed to purchase, an annual quantity of liquefied natural gas (“LNG”) from VGCP’s Calcasieu Pass Facility (the “Facility”).

The SPA specified in detail when the parties’ respective obligations would commence. Although Shell proposed a date certain during negotiations, VGCP resisted, and the parties instead agreed to a complex timing mechanism that relied on a negotiated definition of “commercial operations” and three overlapping commencement date selection windows (the “Commercial Operation Date” or “COD”).

While the definition of COD encompassed multiple elements, the SPA anticipated and required that the Facility begin producing LNG before COD occurred and that VGCP could sell such LNG to other purchasers before making it available to Shell under the agreement. Only once the Facility achieved certain performance milestones, among other conditions, would COD occur and trigger Shell’s rights to LNG under the SPA.

On May 11, 2023, Shell commenced arbitration against VGCP alleging that VGCP breached the SPA by failing or refusing to declare COD as of October 24, 2022, and to thereafter commence sales to Shell under the SPA’s terms. Notably, Russia’s invasion of Ukraine in March 2022 and the concomitant impact on the LNG market had allowed VGCP to sell the Facility’s pre-COD production at a significantly higher price than that at which it was obligated to sell to Shell once COD had been achieved, thus making the timing of COD an economically meaningful matter for both parties. Ultimately, VGCP announced that the Facility achieved COD on April 15, 2025.

The arbitration lasted more than two years and was overseen by three commercial arbitrators selected by Shell and VGCP. The proceeding involved extensive pre-hearing document production totaling many thousands of pages, an interim measures application, two rounds of merits briefing, a two-week evidentiary hearing featuring 26 witnesses (15 presented by Shell), two rounds of post-hearing briefing, and closing arguments.

Among the many witnesses called during the evidentiary hearing was an independent engineer retained by VGCP to provide monthly reports on the Facility’s progress (the “Independent Engineer”). The Independent Engineer, whom the Tribunal found to be “honest and credible,” testified (consistent with VGCP’s position) that declaring COD in October 2022, as Shell urged, would have been premature. This testimony aligned with the reports produced by the Independent Engineer during that period.

Relying on this testimony as purported evidence of “written communications [ . . . ] reflecting VGCP’s considerations about whether or when to declare COD,” Shell made a mid-hearing discovery application seeking allegedly undisclosed communications between VGCP and the Independent Engineer during the period from January 1, 2022, to September 1, 2022.

After receiving written submissions, the Tribunal afforded the parties an opportunity to address the application in person.

In the end, the Tribunal unanimously concluded, based on the extensive record presented, that VGCP had not breached the SPA by failing or refusing to declare COD on October 24, 2022 (the “Award”). Following approval by the ICC International Court of Arbitration on July 31, 2025, the Award was rendered on August 7, 2025.

Shell moved to vacate the Award on the grounds that VGCP procured it through fraud or misconduct. Specifically, Shell alleged that VGCP’s counsel deliberately misled the Tribunal regarding the existence of communications that were the subject of Shell’s discovery applications. Shell also sought leave to conduct discovery to identify any communications between VGCP and the Independent Engineer from January 1, 2022, to September 1, 2022, relating to the status of the Facility and COD—“in other words,” as the motion court put it, “essentially the same discovery requested during the evidentiary hearing, which the Tribunal denied.”[1]

The Motion for Discovery

Unlike in a plenary action, where discovery is available as of right, CPLR 408 provides that in a special proceeding, “[l]eave of court shall be required for disclosure except for a notice [to admit].” CPLR 408 does not distinguish among the various types of special proceedings when it comes to the availability of discovery. As noted by the motion court, “context matters.”[2]

While some courts have exercised discretion to permit discovery in post-arbitration proceedings,[3] noted the motion court, “it does appear (from the paucity of authority cited by the parties) that doing so is relatively rare, perhaps due in part to the courts’ generally deferential role in reviewing arbitral awards.”[4] In any event, said the motion court, “requests for leave to take discovery in a special proceeding must be decided based on the particular facts and circumstances.”[5]

In considering the motion, the motion court found that “Shell’s request for CPLR 408 discovery suffer[ed] from the additional complication that it [sought] essentially the same supplemental discovery it repeatedly but unsuccessfully sought from the Tribunal during the evidentiary hearing.”[6] Thus, concluded the motion court, “its request essentially require[d] the Court to second-guess the arbitrators’ determinations with respect to the scope of discovery, something courts are understandably reluctant to do.”[7] 

The motion court noted that “[d]eference to the Tribunal’s discovery rulings [was] particularly appropriate in this case given the circumstances in which the issue was presented.”[8] The motion court explained that the

arbitrators themselves witnessed the direct and cross-examination of the Independent Engineer, as well as the “careful” statements of VGCP’s counsel on which Shell now focuses much attention. Thus[,] the arbitrators were in a far better position than this Court to assess whether, in light of the extensive discovery process they themselves oversaw, on balance there was a need for additional discovery in the midst of the evidentiary hearing or any concerns about the credibility of VGCP’s reputable counsel.[[9]]

In holding that post-arbitration discovery was not warranted, the motion court rejected Shell’s reliance on Eletson Holdings, Inc v. Levona Holdings Ltd.[10] In Eletson, the court permitted post-arbitration discovery only after subsequent bankruptcy proceedings revealed previously undisclosed materials, despite an earlier application for those materials having been rejected during the arbitration.[11] Notably, the court initially refused to permit any further discovery, holding that the respondent had already been afforded a full opportunity to present its case and was not entitled to “a second bite at the apple.”[12] 

In Shell, Shell’s sole support for its motion consisted of the hearing transcript itself, “amplified by conclusory and speculative accusations of misrepresentation by VGCP’s counsel.”[13] “To the extent Shell sought to test opposing counsel’s representations,” said the motion court, “it was afforded ample opportunity by the Tribunal to do so …, but the Tribunal was not persuaded.”[14]

“Ultimately,” said the motion court, “Shell now seeks a third bite at the apple—making an essentially identical application to this Court in the hope of obtaining a different outcome and using it to relitigate the arbitration. That is not a persuasive basis for seeking post-arbitration discovery.”[15]

In conclusion, the motion court rejected Shell’s request by emphasizing that CPLR 7511 does not permit discovery that would effectively second‑guess the arbitral tribunal’s considered discovery rulings, particularly where the alleged need for discovery rested on speculation rather than facts external to the arbitration record:

To be sure, there is some tension between respecting the Tribunal’s discovery decisions and the otherwise reasonable instinct to give a petitioner latitude to develop the evidentiary basis of its contentions. But that tension is of Shell’s own creation. To grant Shell’s discovery request would be to permit the very discovery rejected by the Tribunal on the speculative basis that perhaps the Tribunal did not accurately assess the risk that relevant documents were being withheld. As described in greater detail below, that is exactly the type of judicial second-guessing that is not permitted in a proceeding under CPLR 7511. By contrast, the few cases that have permitted discovery in aid of a petition to vacate an arbitration award have focused on allowing the petitioner to develop challenges based on facts external to the panel’s decision on the merits.[[16]]

The Petition to Vacate

Under New York law, “[a]n arbitration award must be upheld when the arbitrator offer[s] even a barely colorable justification for the outcome reached[;] an arbitrator’s award should not be vacated for errors of law and fact committed by the arbitrator and the courts should not assume the role of overseers to mold the award to conform to their sense of justice.”[17] Accordingly, “a court may vacate an arbitration award only if it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator's power.”[18] “A party moving to vacate an arbitration award has the burden of proof, and the showing required to avoid confirmation is very high.”[19] Simply put, “an arbitrator’s rulings, unlike a trial court’s, are largely unreviewable.”[20] 

The grounds for vacating an arbitration award are limited and set forth in the Federal Arbitration Act (9 U.S.C. § 10) and in CPLR 7511. Relevant to Shell is CPLR 7511(b)(1)(i), which permits a court to vacate an award upon a finding that it was procured by “corruption, fraud or misconduct.”[21]

A party claiming fraudulent procurement of an arbitration award must establish: first, that fraud occurred in the arbitration, which must be proven by clear and convincing evidence; second, that the fraud could not have been discovered through the exercise of due diligence before or during the arbitration; and third, that the fraud materially related to an issue in arbitration.[22]

While the discovery of new evidence is not generally grounds for vacatur,[23] purposeful concealment or lack of candor “does constitute the type of misconduct that [may warrant] further proceedings before the arbitrator.”[24] 

Shell moved to vacate the Award on the ground that VGCP’s counsel procured the Award by concealing evidence from the Tribunal. Specifically, Shell contended that VGCP’s counsel misled the Tribunal about the existence of purported written communications that may have occurred between VGCP and the Independent Engineer. Based on the record before the motion court, the motion court “concludes[d] that Shell [did] not [meet] its burden to establish grounds for vacating the Award.”[25]

The motion court explained that “Shell’s claim of fraud or misconduct rest[ed] on the assertions that (a) the Independent Engineer purportedly confirmed the existence of written communications between VGCP and the Independent Engineer, in or around fall 2022, reflecting consideration by VGCP about whether and when to declare the occurrence of the Terminal’s Commercial Operation Date, following which (b) VGCP’s counsel misrepresented that no such written communications existed.”[26] “However,” said the motion court, “the record simply [did] not support those contentions.”[27] The motion court found that “[w]hile the Independent Engineer’s testimony suggest[ed] that VGCP may have offered commentary or made observations about the Independent Engineer’s monthly reports, it did not establish—let alone by clear and convincing evidence—that there were unproduced written communications reflecting VGCP’s consideration about whether and when to declare COD.”[28] “Based on the testimony, which [was] equivocal at best,” said the motion court, “any suggestion to the contrary [was] conjecture.”[29]

Speaking to the scienter element of fraud, the motion court found that “the representations of VGCP’s counsel [did] not establish by clear and convincing evidence that VGCP’s counsel knowingly made misrepresentations to the Tribunal as to whether responsive documents had been withheld from production.”[30] The motion court explained that “VGCP’s counsel forthrightly explained that he had not conducted a new document review during the arbitration hearing in response to Shell’s demands, but that he was unaware of any responsive and unprivileged documents that were withheld from production.”[31] As noted above, said the motion court, “the Tribunal vetted the issue during the hearing and concluded that there were no grounds to require additional discovery proceedings.”[32] “In sum,” concluded the motion court, “Shell’s suggestion that VGCP’s counsel made misrepresentations to the Tribunal [was] pure speculation.”[33] 

The motion court also addressed the materiality element of the claimed fraud, finding that Shell did not establish “that the speculated written communications between the Independent Engineer and VGCP would have been material to any issue in the arbitration.”[34] “The Independent Engineer’s testimony constituted only one of several independent bases supporting the Tribunal’s conclusions as to the central question of whether the Facility achieved COD as of October 2022,” noted the motion court.[35] “Thus,” concluded the motion court, “it [was] far from clear—and indeed a stretch—that disclosure of any particular correspondence between the Independent Engineer and VGCP, added to the extensive record that already existed, would have altered the record in any meaningful way.”[36]

Takeaway

Shell reaffirms arbitration finality and judicial restraint in post‑award proceedings. First, it underscores that discovery under CPLR 408 in a vacatur proceeding is the rare exception, not the rule, and is especially disfavored when it seeks materials that the arbitral tribunal has already considered and rejected. Courts will not use CPLR 408 to second‑guess an arbitrator’s procedural or discovery rulings, particularly where the arbitrators were best positioned to assess credibility, completeness of production, and the need for additional disclosure during the arbitral hearing itself. As the motion court noted, a court’s role under CPLR 7511 is deferential, not supervisory.

Second, Shell underscores the difficulties vacating an award for fraud under CPLR 7511. Speculation about undisclosed documents, disagreements with counsel’s representations, or post-hoc dissatisfaction with the arbitral record will not suffice. Fraud must be proven by clear and convincing evidence, must concern facts that could not have been discovered with due diligence during the arbitration, and must be material to the award. Absent concrete, external evidence of misconduct, courts will not permit discovery or reopen the merits under the guise of a vacatur application.

_______________________________

Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice.

Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions and not on matters handled by the firm.

[1] Slip Op. at *3.

[2] Id.

[3] See, e.g., TCR Sports Broadcasting Holding, LLP v. WN Partner, LLC, 2015 WL 6746689, at 4 (Sup. Ct., N.Y. County 2015) (trial court noted that it had permitted limited discovery into alleged arbitrator partiality), aff’d on other grounds, 153 A.D.3d 140 (1st Dept. 2017); Frere v. Orthofix, Inc., 2000 WL 1789641, at 4 (S.D.N.Y. 2000) (noting that “discovery in a post-arbitration judicial proceeding [is available in] limited circumstances, where relevant and necessary to the determination of an issue raised by such an application.”).

[4] Slip Op. at *3.

[5] Id.

[6] Id.

[7] Id. (citing Matter of Merrill Lynch, Pierce, Fenner & Smith, 198 A.D.2d 181, 181 (1st Dept. 1993) (declining to reconsider arbitrators’ denial of a document request); Doscher v. Sea Port Grp. Sec., LLC, 2017 WL 6061653, at 5 n.4 (S.D.N.Y. 2017) (denying discovery in a vacatur proceeding because the respondent “was given the opportunity to obtain [most, if not all, of the discovery it now seeks] during the arbitration proceedings”); TCR Sports Broadcasting Holding, LLP v. WN Partner, LLC, 67 Misc. 3d 1242(A), at 29-32 (Sup. Ct., N.Y. County 2019) (noting that “arbitrators have substantial discretion in regulating the scope of discovery” and declining to second-guess that judgment), aff’d, 187 A.D.3d 623 (1st Dept. 2020), aff’d in part and modified in part on unrelated grounds, 40 N.Y.3d 71 (2023); Kellner v. Amazon, 2023 WL 2230288, at 4 (2d Cir. 2023) (“arbitrator’s decision to exercise [their] authority [to compel discovery] in a manner different than requested by [the petitioner] is not grounds for vacatur”)).

[8] Id.

[9] Id.

[10] 2024 WL 4100555 (S.D.N.Y. 2024).

[11] Id. at *22.

[12] See Eletson Holdings, Inc. v. Levona Holdings Ltd., 2024 WL 246367, at *2 (S.D.N.Y. 2024).

[13] Slip Op. at *3.

[14] Id.

[15] Id. (orig’l emphasis) (citing Sorrentino v. Weinman, 50 A.D.3d 305, 305 (1st Dept. 2008) (“petitioner raised the arguments that respondents [ . . . ] failed to produce material information, which the arbitration panel rejected, and there exists no basis to disturb the panel’s determination”); TCR Sports Broadcasting, 67 Misc. 3d 1242(A), at 31 (“[t]he record shows that the [arbitrators] considered the [applicants’] various discovery requests and rejected them in a formal, reasoned order”); Panzer v. Epstein, 2023 WL 4149526, at 2 (Sup. Ct., N.Y. County 2023) (refusing to preempt arbitrators’ rejection of adjournment request to digest disclosure; “[a]rbitrators are properly given broad discretion with respect to procedural matters such as the scope of discovery”); Kellner, 2023 WL 2230288, at 5 (denying motion to vacate discovery ruling because “[t]he arbitrator held a hearing in which both parties presented their arguments regarding [the petitioner’s] remaining three discovery requests, and she ultimately sustained [the respondent’s] objections, providing a reasoned basis for that decision”)).

[16] Id. (citing TCR Sports Broadcasting, 2015 WL 6746689, at *4 (noting that the court allowed limited discovery into the arbitrators’ alleged partiality and conflicts of interest)).

[17] Wien & Malkin LLP v. Helmsley-Spear, Inc., 6 N.Y.3d 471, 479-80 (2006).

[18] In re Falzone (New York Cent. Mut. Fire Ins. Co.), 15 N.Y.3d 530, 534 (2010).

[19] U.S. Elecs., Inc v. Sirius Satellite Radio, Inc., 17 N.Y.3d 912, 915 (2011) (citation omitted).

[20] Falzone, 15 N.Y.3d, at 534.

[21] See also 9 USC § 10(a)(1) (“corruption, fraud, or undue means”).

[22] Imgest Finance Establishment v. Shearson Lehman Hutton, Inc., 172 A.D.2d 291, 291 (1st Dept. 1991); Odeon Capital Group LLC v. Ackerman, 864 F.3d 191, 194 (2d Cir. 2017).

[23] See Matter of Central Gen. Hosp. v. Hanover Ins. Co., 49 N.Y.2d 950, 951 (1980) (affirming arbitration award despite subsequent emergence of new evidence even though the evidence may have resulted in a different outcome).

[24] See Matter of Science Dev. Corp. (Schonberger), 156 A.D.2d 253, 254 (1st Dept. 1989) (affirming vacatur where respondent concealed important evidence).

[25] Slip Op. at *5.

[26] Id.

[27] Id.

[28] Id.

[29] Id.

[30] Id.

[31] Id.

[32] Id.

[33] Id.

[34] Id.

[35] Id.

[36] Id. (citation omitted).