The factual and procedural history is set forth in detail in Judge Lehrburger's R&R. Nevertheless, a brief discussion of these facts and history is warranted for background.
This case arises from a 1993 joint venture ("1993 Agreement") between Plaintiff ("Sistem") and Ak-Keme Joint Stock Company ("Ak-Keme JSC") to construct and operate a luxury hotel in Kyrgyzstan. R&R, ECF No. 205 at 2. Ak-Keme JSC is a Kyrgyz company partially owned by Defendant ("the Republic"). Pursuant to an arbitration clause in the 1993 Agreement, Plaintiff initiated an arbitration in the International Centre for Settlement of Investment Disputes alleging that Ak-Keme JSC improperly removed Plaintiff from the joint venture and entered into a new joint venture with a Malaysian entity known as SKMP Ak-Keme Hotel LLC ("SKMP Ak-Keme"). Id. Plaintiff was awarded $8.5 million plus costs and interest in this arbitration (the "ICSID Award"). Id. at 3. On November 14, 2016, this Court entered a judgment confirming the ICSID Award in favor of Plaintiff in the amount of $11,603,319 plus interest. ECF No. 131. The Second Circuit affirmed. See Sistem Muhendislik Insaat Sanayi Ve Ticaret, A.S. v. Kyrgyz Republic, 741 F. App'x 832 (2d Cir. 2018). In post-judgment discovery, Defendant failed to comply with at least five discovery orders and refused to pay attorneys' fee. R&R at 3. Accordingly, Judge Lehrburger recommended that Defendant be held in contempt and sanctioned. This Court fully adopted his recommendation and imposed $5,000 in sanctions per day until Defendant either complied with its discovery obligations or satisfied the judgment. ECF No. 185.
On June 28, 2019, Defendant filed a motion for sanctions to be vacated. ECF No. 186. Defendant alleges that Ak-Keme JSC assigned its rights under the 1993 Agreement to SKMP Ak-Keme and that SKMP Ak-Keme then initiated an arbitration against Plaintiff for breach of the 1993 joint venture. R&R at 4. The arbitration tribunal awarded SKMP Ak-Keme $11,554,900 and this award with interest and penalties now totals over $20 million ("Kyrgyz Award"). SKMP Ak-Keme assigned this award to Defendant, who now claims that the sanctions imposed by this Court should be vacated because the Kyrgyz Award more than offsets the amount the Defendant owes Plaintiff. Id. at 5.
On August 8, 2019, Plaintiff opposed Defendant's motion and filed a cross-motion to increase sanctions to $10,000 per day and to enter judgment for the amount of past-due sanctions. ECF No. 191-194. Defendant filed its response on September 20, 2019, ECF No. 203, and Plaintiff filed a reply on September 27, 2019, ECF No. 204. Judge Lehrburger issued his report and recommendation on October 1, 2019. ECF No. 205. Defendant filed objections within fourteen days, ECF No. 208, Plaintiff filed its response on October 29, 2019, ECF No. 209, and Defendant filed a reply on December 30, 2019, ECF No. 213.