device that permits the user of diamond compound in paste form (i.e., "abrasives") to apply the required amount precisely without waste. While the Hyplicator Patents do not expressly fall within the 1972 Agreement definitions of "accessories" or "abrasives," the Arbitrator could plausibly determine that the Hyplicator Patents are the result of research and development relating to accessories or abrasives.
Furthermore, the Arbitrator had authority to take into account both implied and express contractual terms and also had great flexibility in fashioning an appropriate remedy. See, e.g., Chameleon Dental Products, Inc., 925 F.2d at 226 (arbitrators must be "given flexibility in fashioning appropriate remedies not inconsistent with the terms of the contract or agreement being interpreted"). Because the court finds that the assignment of the Hyplicator Patents was an appropriate remedy not inconsistent with the 1972 Agreement, the court affirms the assignment.
3. Choice of Law
The 1972 Agreement provides that "this Agreement shall take effect and be construed in accordance with the laws of the State of Illinois, U.S.A." (1972 Agr. at § 11(b); emphasis added). Ltd. argues that pursuant to this choice of law provision, the parties chose to be governed by all Illinois law, including Illinois choice of law rules. Under Illinois choice of law rules, Ltd. argues that English law, rather than Illinois law, must be applied.
Ltd.'s entire choice of law argument is meritless. Ltd. cites absolutely no cases supporting its position, presumably because there are none. Moreover, Ltd.'s argument is directly contradicted by Restatement (Second) of Conflict of Laws § 186 cmt. b (1971):
"Values of certainty of result and of ease of application dictate that the forum should apply the local law of the selected state and not concern itself with the complications that might arise if the forum were to apply that state's choice-of-law rules."
Moreover, Ltd.'s position would render the choice of law provision in the 1972 Agreement effectively meaningless, thereby violating a fundamental rule of contract interpretation that contracts should not be interpreted in a way that renders provisions meaningless. See, e.g., E. Allan Farnsworth, Contracts § 7.11 at 516 (2d ed. 1990). Accordingly, the court rejects Ltd.'s proposed nullification of the 1972 Agreement's choice of law provision, and finds that Illinois law should be applied to the 1972 Agreement.
Under Illinois law, the parties' choice of law governs unless:
"(1) the chosen State has no substantial relationship to the parties or the transaction or (2) application of the chosen law would be contrary to a fundamental public policy of a state with a materially greater interest in the issue in dispute." (emphasis added).
Int'l Surplus Lines Ins. Co. v. Pioneer Life Ins. Co., 209 Ill. App. 3d 144, 153 (1st. Dist. 1990).
In the case at bar, there is no evidence that any jurisdiction other than Illinois has a materially greater interest than Illinois. The 1972 Agreement was negotiated in both Illinois and the United Kingdom, was executed in both locations, and calls for performance in both locations. Moreover, the situs of the intellectual property that is the subject matter of the 1972 Agreement is with Corp. in Illinois, at Corp.'s principal place of business. While the United Kingdom certainly has an interest in the issue in dispute since Ltd.'s place of business and incorporation are there, the United Kingdom did not have a "materially greater interest in the issue in dispute" than did Illinois. Therefore, Ltd.'s extensive digression into English law is completely irrelevant.
4. The Arbitrator's Retained Jurisdiction
Finally, Ltd. argues that the Arbitrator lacks the power to retain jurisdiction over future disputes concerning the Award.
In support of its position, Ltd. cites two cases which state that an arbitrator does not have the power to modify or amend an arbitration award once it is issued,
and one case for the proposition that an arbitrator's authority eventually ends.
Not only does Ltd. fail to provide any support for its proposition that the Arbitrator cannot retain post-Award jurisdiction concerning enforcement of the Award, but Ltd.'s position is actually undercut by one of its own citations. In Dreis & Krump Mfg., the Seventh Circuit tacitly approved of arbitrators' retaining jurisdiction to ensure compliance with their awards, but disapproved of retaining jurisdiction to act on requests for reconsideration. Id.
Ltd. is, in effect, misconstruing the functus officio doctrine, which holds that "after a final decision by an arbitrator, the arbitrator becomes functus officio and lacks the power to reconsider or amend the decision." Anderson v. Norfolk & Western Ry. Co., 773 F.2d 880, 883 (7th Cir. 1985) (underlining added). The doctrine is designed to ensure the finality of arbitration awards by eliminating the arbitrator's power to reconsider or change an award once it has been issued. However, as in Dreis & Krump Mfg., the doctrine does not prohibit an arbitrator from retaining jurisdiction solely for the purpose of ensuring compliance with his award. Prohibiting retention of enforcement jurisdiction would needlessly undermine the arbitration process by requiring either perpetual judicial intervention or the selection of additional arbitrators to resolve future enforcement disputes.
Accordingly, in the case at bar, the Arbitrator's retention of jurisdiction to resolve enforcement disputes was appropriate.
For all of the foregoing reasons, it is hereby ordered that:
(1) The Petition for Order to Confirm the Arbitration Award in the Matter of Arbitration between Engis Corporation and Engis Ltd., Grievance No. 51-133-0055-91H is granted;
(2) The Counter-Petition of Engis Ltd. is denied; and
(3) Judgment is hereby entered in accordance with the Arbitration Award.
BRIAN BARNETT DUFF, JUDGE
UNITED STATES DISTRICT COURT
DATE: September 28, 1992