Inc. Id. at para. 16. DeKalb sold its shares without the knowledge or consent of the Marchetto Group and without offering the Marchetto Group the opportunity to purchase the shares. Id. Six years later, DeKalb reorganized into three publicly traded companies: DeKalb Energy, the successor corporation to DeKalb, DeKalb Genetics, and Pride Petroleum Services, Inc. Id. at paras. 6, 7. DeKalb Genetics replaced DeKalb as a partner in DeKalb-Pfizer Genetics. Id. at para. 17.
The Marchettos now claim that the transfers of DeKalb Italiana stock effected by the defendants violated the shareholder agreement. Count I of the complaint alleges a breach of the agreement. Count II alleges the defendants tortiously interfered with the agreement. The defendants move to dismiss on the basis of the arbitration clause. They claim this dispute should be resolved in Italy.
When considering a motion to dismiss, the court views the allegations of the complaint in the light most favorable to the plaintiff and accepts as true all well pleaded material facts. City of Milwaukee v. Saxbe, 546 F.2d 693, 704 (7th Cir. 1976); Bruss Co. v. Allnet Communications Services, Inc., 606 F. Supp. 401, 404 (N.D.Ill. 1985). The complaint will not be dismissed unless it is beyond doubt that no facts are alleged to support the claim. Id.
The Federal Arbitration Act ("the Arbitration Act"), 9 U.S.C. § 1 et seq., governs the enforcement, interpretation and validity of arbitration clauses in commercial contracts. Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24-25, 74 L. Ed. 2d 765, 103 S. Ct. 927 (1983); Snyder v. Smith, 736 F.2d 409, 417 (7th Cir. 1984); Zell v. Jacoby-Bender, Inc., 542 F.2d 34, 37 (7th Cir. 1976). The Arbitration Act provides that arbitration agreements "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or equity for the revocation of any contract." 9 U.S.C. § 2. This language creates a presumption in favor of arbitration. Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 625, 87 L. Ed. 2d 444, 105 S. Ct. 3346, 3353 (1985); Moses H. Cone Memorial Hospital, 460 U.S. at 24-25; Snyder, 736 F.2d at 417; In re Oil Spill by Amoco Cadiz, 659 F.2d 789, 795 (7th Cir. 1981). This means courts must vigorously enforce arbitration clauses in commercial contracts. Id. Any doubts regarding the validity of an arbitration clause must be resolved in favor of arbitration. Id.
The federal policy favoring arbitration applies with special force in the area of international commerce. Mitsubishi Motors Corp., 473 U.S. at 629-31; Scherk v. Alberto-Culver Co., 417 U.S. 506, 516-17, 41 L. Ed. 2d 270, 94 S. Ct. 2449 (1974); In re Oil Spill by Amoco Cadiz, 659 F.2d at 795; Karlberg European Tanspa, Inc. v. JK-Josef Kratz Vertriebsgesellschaft, 618 F. Supp. 344, 347 (N.D.Ill. 1985). In 1970, the United States became a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards ("the Convention"). 3 U.S.T. 2517, T.I.A.S. No. 6997 reprinted in 9 U.S.C. § 201 (1980 Supp.); Scherk, 417 U.S. at 520 n. 15. The Convention and its enabling legislation, 9 U.S.C. § 201 et seq., were designed to encourage the arbitration of international commercial disputes and to unify the standards by which agreements are enforced. Scherk, 417 U.S. at 520 n. 15. By acceding to the Convention, the United States joined other signatory nations in proclaiming a willingness to enforce arbitration clauses in international commercial agreements. Id. at 516 n. 10. Rhone Mediterranee Compagnia v. Achille Lauro, 712 F.2d 50, 53-54 (3d Cir. 1983).
The strong presumption favoring enforcement of arbitration clauses in international commercial agreements divests this court of substantial discretion in deciding whether to order arbitration. Sedco v. Petroleos Mexicanos Mexican Nat'l Oil Co., 767 F.2d 1140, 1144-45 (5th Cir. 1985); Snyder, 736 F.2d at 418, 419; Ledee v. Ceramiche Ragno, 684 F.2d 184, 186-87 (1st Cir. 1982); In re Oil Spill by Amoco Cadiz, 659 F.2d at 795-96. The Convention requires this court to inquire whether (1) there is a written arbitration agreement; (2) the agreement provides for arbitration in a signatory country; (3) the agreement arises out of a commercial legal relationship; and (4) the commercial transaction has a reasonable relationship to a foreign state. Sedco, 767 F.2d at 1144-45; Ledee, 684 F.2d at 186-87. If these factors are met, arbitration is mandatory. Id.
There is no dispute that these factors are present in this case. Italy is a signatory country. 9 U.S.C. § 201. The shareholder agreement unquestionably embodies a legal relationship. The arbitration clause was incorporated into this agreement through a written amendment. Moreover, the allegedly unlawful transfers of DeKalb Italiana stock have a reasonable relationship to Italy because they involve an Italian company and allegedly damaged an Italian shareholder group.
The Marchettos ignore these factors. They argue that the arbitration clause is unenforceable under Article II (3) of the Convention. 9 U.S.C. § 201. Article II(3) provides:
The court of a Contracting State, when seized of an action in a matter in respect of which the parties have made an agreement within the meaning of this article, shall at the request of one of the parties, refer the parties to arbitration, unless it finds that said agreement is null and void, inoperative or incapable of being performed.
Id. The Marchettos contend this arbitration clause is incapable of performance because Italian law will not enforce an arbitration agreement where, as here, three of the four defendants are not parties to the agreement. They also argue that their claim for tortious interference in Count II is nonarbitrable under Italian law because it is beyond the scope of the arbitration clause.
These arguments are without merit. The possibility that Italian law might divest a panel of Italian arbitrators of jurisdiction is not determinative of this court's duty to enforce an otherwise valid arbitration agreement. Mitsubishi Motors Corp., 473 U.S. at 629-31; Scherk, 417 U.S. at 517-19; Rhone Mediterranee Compagnia, 712 F.2d at 53-54. Section 203 of the Act provides that:
an action or proceeding falling under the Convention shall be deemed to arise under the laws and treaties of the United States.