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LANDER CO. v. MMP INVS.

June 4, 1996

LANDER CO., INC., a New Jersey Corporation, Petitioner,
v.
MMP INVESTMENTS, INC., an Illinois Corporation, Respondent.



The opinion of the court was delivered by: REINHARD

 INTRODUCTION

 Petitioner, Lander Co., Inc., filed a petition to confirm an arbitral award under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 (Convention) issued by an arbitrator in New York, New York on October 31, 1995. Jurisdiction is alleged under 9 U.S.C. §§ 1, 9, 201, 202, 203 and 207, as well as 28 U.S.C. § 1332 and venue is proper pursuant to 9 U.S.C. § 204. *fn1" Respondent, MMP Investments, Inc., has moved to dismiss the petition to confirm. Alternatively, respondent requests leave to present a complete record of its defenses under Articles IV and V of the Convention. Petitioner, in response to this latter request, asks this court to order respondent to post a bond to secure payment of the arbitral award.

 FACTS

 In February 1993, the parties entered into a technical service agreement under which respondent became the exclusive manufacturer and distributor of petitioner's products in Poland for five years. Further, the technical service agreement states, in relevant part, that respondent "will use its best efforts to promote the sale of a maximum quantity" of petitioner's product "including the establishment and development of a competent sales force of adequate size and appointment of capable sub-distributors and an experienced advertising consultant." The technical services agreement also provides that all notices be sent to Michael Mucha of MMP Investments in Cary, Illinois and also to "MMP-Poland ... Attn: Jacek Slowakiewicz." Respondent is further required under the technical services agreement to carry adequate product liability insurance to protect and hold harmless petitioner in Poland.

 Both agreements contain an arbitration clause which requires that any controversy arising under the agreements be arbitrated in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce with said arbitration being conducted in New York, New York. The agreements also provide that they shall be construed in accordance with New York state law.

 In May 1993, a controversy arose out of the agreements to the extent that respondent claimed that certain products it received from petitioner were defective. In an effort to cure the alleged problems, petitioner's chairman of the board visited Poland. In February 1994, petitioner sent respondent a final termination notice.

 Pursuant to the arbitration clause in the agreements, respondent filed a request for arbitration with the International Court of Arbitration of the International Chamber of Commerce (ICC Court). After the parties submitted their pleadings, the ICC Court appointed a sole arbitrator from New York to hear the dispute.

 In January 1995 the arbitrator and the parties executed a terms of reference in which they acknowledged that the arbitral tribunal was properly constituted and that the arbitrator had jurisdiction. In July 1995, hearings were conducted, and the parties submitted exhibits and briefs. The arbitrator issued his award on October 31, 1995 in favor of petitioner for $ 536,444.

 CONTENTIONS

 Respondent contends that the petition to confirm should be dismissed because where, as here, an arbitral award is issued in the United States and is based on an agreement between two United States companies, providing that New York law will apply, it does not fall within the definition of a recognizable and enforceable award under the Convention. Petitioner responds that in light of the language of section 202 of the implementing legislation, 9 U.S.C. § 202, the arbitral award is recognizable and enforceable under the Convention because the agreements call for performance in a foreign state.

 DISCUSSION

 The court begins by noting the dearth of cases interpreting the Convention and its implementing legislation under Title 9. Furthermore, the parties have accurately described this case as one of first impression. The court has found no other case addressing the applicability of the Convention to an arbitral award *fn3" between two domestic companies, under domestic law, entered into in the United States with agreements calling for performance in a foreign country. Nonetheless, the court considers this case to boil down to the singular issue of ...


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