Court Ends User’s Bid to Undo Arbitration Award in Microsoft, Skype Case

A Southern District of New York judge has resolved allegations against Skype Communications S.a.r.l. and Microsoft Corporation which acquired the video conferencing company for $8.5 billion in 2011. In a three-page ruling, the court denied the pro-se plaintiff’s bid to overturn the July 2021 arbitration award as untimely. 

The user claimed that he signed up for a Skype account in December 2018 and purchased a $10 credit for use with the software while he was traveling to China. Thereafter, the problems began. First, Microsoft allegedly rejected his Chinese IP address for having a low “reputational score” and prevented him from using the service.

Later, and allegedly using a hotel’s IP address, the plaintiff logged in and tried to use Skype but was told that due to spam sent from his account or some other activity in violation of Skype’s terms of service, he had to accomplish additional steps.

Then, he was barred from accessing his account to “make sure it was safe,” suggesting that the plaintiff’s account may have been the target of malicious activity. The plaintiff said he proceeded to monitor his online accounts, wary of a potential hack as suggested by the defendants.

The user’s complaint argued that the defendants engaged in unfair business practices for taking his money and never rendering a service, wire fraud, and racketeering. The harm he suffered allegedly included not only the money he paid for the use of Skype but “enormous financial losses due to lost time and lost opportunities.”

In July 2021, the arbitrator held in Skype and Microsoft’s favor, denying all of the user’s claims.

In this week’s opinion, the court ruled that the plaintiff’s request to vacate the arbitrator’s award was untimely because though the motion was filed within the three-month time limit, it was not served on the defendants until well after the deadline passed. Judge Lorna G. Schofield noted that even for pro se litigants, there is no exception to the rule. 

In addition, were the court to construe the complaint as something other than a motion to vacate, it would be dismissed because its claims are barred by the doctrine of res judicata, the opinion said.

Skype and Microsoft are represented by Davis Wright Tremaine LLP.