Leader Tech. v. MultiNational Resour CV-01-359-JD 12/03/04 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Leader Technology Co.
v. Civil No. 01-359-JD Opinion No. 2004 DNH 178 MultiNational Resources, Inc.
O R D E R
Leader Technology Company brought suit in state court
against MultiNational Resources, Inc. ("MNR"), alleging breach of
contract and guantum meruit. MNR then removed the action to this
court based on diversity jurisdiction pursuant to 28 U.S.C. §
1332, and brought several counterclaims. MNR moved to remand the
case for arbitration under the Federal Arbitration Act ("FAA"), 9
U.S.C. § 1, et seg., pursuant to the arbitration clause in the
parties' agreement. The court granted that part of MNR's motion
seeking arbitration. Order, Dec. 19, 2001, (doc. no. 11).
Background
The parties arbitrated their dispute before a three-
arbitrator panel of the American Arbitration Association ("AAA").
On August 16, 2004, the panel issued its decision to award Leader
$495,766.07, and the AAA issued the award on August 24, 2004. On
September 1, 2004, Leader filed a petition to confirm the
arbitration award pursuant to 9 U.S.C. §§ 9 and 9/13" style="color:var(--green);border-bottom:1px solid var(--green-border)">13. MNR objected to the petition on the ground that it intended to file an
application, pursuant to the AAA Rules, to correct computational
errors in the award. The panel denied MNR's application on
September 28, 2004.
MNR then filed a second objection to Leader's motion to
confirm and a motion to stay the proceedings, seeking time to
file a motion to vacate the award. MNR cited the New Hampshire
Arbitration Act, New Hampshire Revised Statutes Annotated ("RSA")
§ 542:8, et seg., as the basis for its planned motion. Leader
objects to MNR's motion to stay the proceedings.
Discussion
Leader asserts that the arbitration panel's award should be
confirmed pursuant to 9 U.S.C. §§ 9 and 9/13" style="color:var(--green);border-bottom:1px solid var(--green-border)">13, asking the court to
enter judgment confirming the award in its favor of $495,776.07.
MNR objects to Leader's motion on the ground that it intends to
file a motion to vacate the award and asks that the proceedings
be stayed until ninety days after September 28, 2004, by which
time MNR intends to file its motion. MNR asserts that New
Hampshire law governs the remaining issues in this case.
2 A. Governing Law
MNR contends that choice-of-law clause in the parties'
agreement directs that New Hampshire law, including the New
Hampshire Arbitration Act, governs the court's review of the
arbitration award. That clause provides that the "Agreement is
made under, and the validity, construction and performance of
this Agreement shall be governed and interpreted in accordance
with, the laws of the State of New Hampshire, United States of
America." Motion for Stay, Ex. A, 5 15 (doc. no. 18) . With
respect to arbitration, however, the same clause provides that
the parties' disputes "shall be finally settled by binding
arbitration to be conducted in the State of New Hampshire in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association."
As is noted above, the parties have proceeded to this point
under the FAA. The court previously held that the FAA governed
the proceedings because the parties' agreement concerns
interstate commerce. Order, Dec. 19, 2001, at 5. MNR did not
challenge that decision and failed to mention it in its present
motion.
Even if this issue had not been resolved previously in this
case, MNR's argument that New Hampshire arbitration law governs
would not succeed. Parties may agree to arbitrate under state
3 law. See, e.g.. Ford v. NYLCare Health Plans of the Gulf Coast,
Inc., 141 F.3d 243, 248-49 (5th Cir. 1998); Ekstrom v. Value
Health, Inc., 68 F.3d 1391, 1395-96 (D.C. Cir. 1995); Int'1
Techs. Integration, Inc. v. Palestine Liberation Org., 66 F.
Supp. 2d 3, 8-10 (D.D.C. 1999). If the parties intend that state
arbitration laws govern their proceedings, however, that intent
must be stated clearly to avoid the presumption that the FAA
governs arbitration. See, e.g., Mastrobuono v. Sherson Lehman
Hutton, Inc., 514 U.S. 52, 63-64 (1995); Roadway Package Sys.,
Inc. v. Kayser, 257 F.3d 287, 294-95 (3d Cir. 2001); Paine Webber
Inc. v. Elahi, 87 F.3d 589, 594 (1st Cir. 1996); Calabria v.
Franklin Templeton Servs., Inc., 2001 WL 1180466, at *3 (N.D.
Cal. Sept. 26, 2001).
In this case, the choice-of-law clause states that the
agreement will be construed under New Hampshire law. At the same
time, however, the clause provides for arbitration under federal
law. Therefore, the FAA, rather than state law, applies to the
court's review of the arbitration proceeding. See Paine Webber,
87 F.3d at 594.
4 B. Motion to Stay the Proceedings
MNR asks the court to stay the proceedings here for ninety
days after September 28, 2004, pursuant to Federal Rule of Civil
Procedure 8 1 (e). Although MNR asserts that it is entitled to
file a motion to vacate the award within one year, as provided by
RSA 542:8, it states that it intends to file its motion within
ninety days as provided under the FAA, 9 U.S.C. § 12. MNR asks
the court not to consider Leader's motion to confirm the award
and to stay the proceedings until it files its motion to vacate.
Leader objects and asserts that under 9 U.S.C. § 12, MNR would
have only three months after August 24, 2004, to file a motion to
vacate.
RSA 542:8 does not apply in this case. Under the FAA, a
party has ninety days to challenge the arbitrator's award. 9
U.S.C. § 12; Prudential-Bache Securities, Inc. v. Tanner, 72 F.3d
234, 239 (1st Cir. 1995). The ninety-day period begins when the
award is "filed or delivered." 9 U.S.C. § 12. As long as the
arbitral award resolves the parties' claims, it is final when it
is filed or delivered and the time under § 12 begins to run,
although the arbitrators may retain jurisdiction to consider
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Leader Tech. v. MultiNational Resour CV-01-359-JD 12/03/04 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW HAMPSHIRE
Leader Technology Co.
v. Civil No. 01-359-JD Opinion No. 2004 DNH 178 MultiNational Resources, Inc.
O R D E R
Leader Technology Company brought suit in state court
against MultiNational Resources, Inc. ("MNR"), alleging breach of
contract and guantum meruit. MNR then removed the action to this
court based on diversity jurisdiction pursuant to 28 U.S.C. §
1332, and brought several counterclaims. MNR moved to remand the
case for arbitration under the Federal Arbitration Act ("FAA"), 9
U.S.C. § 1, et seg., pursuant to the arbitration clause in the
parties' agreement. The court granted that part of MNR's motion
seeking arbitration. Order, Dec. 19, 2001, (doc. no. 11).
Background
The parties arbitrated their dispute before a three-
arbitrator panel of the American Arbitration Association ("AAA").
On August 16, 2004, the panel issued its decision to award Leader
$495,766.07, and the AAA issued the award on August 24, 2004. On
September 1, 2004, Leader filed a petition to confirm the
arbitration award pursuant to 9 U.S.C. §§ 9 and 9/13" style="color:var(--green);border-bottom:1px solid var(--green-border)">13. MNR objected to the petition on the ground that it intended to file an
application, pursuant to the AAA Rules, to correct computational
errors in the award. The panel denied MNR's application on
September 28, 2004.
MNR then filed a second objection to Leader's motion to
confirm and a motion to stay the proceedings, seeking time to
file a motion to vacate the award. MNR cited the New Hampshire
Arbitration Act, New Hampshire Revised Statutes Annotated ("RSA")
§ 542:8, et seg., as the basis for its planned motion. Leader
objects to MNR's motion to stay the proceedings.
Discussion
Leader asserts that the arbitration panel's award should be
confirmed pursuant to 9 U.S.C. §§ 9 and 9/13" style="color:var(--green);border-bottom:1px solid var(--green-border)">13, asking the court to
enter judgment confirming the award in its favor of $495,776.07.
MNR objects to Leader's motion on the ground that it intends to
file a motion to vacate the award and asks that the proceedings
be stayed until ninety days after September 28, 2004, by which
time MNR intends to file its motion. MNR asserts that New
Hampshire law governs the remaining issues in this case.
2 A. Governing Law
MNR contends that choice-of-law clause in the parties'
agreement directs that New Hampshire law, including the New
Hampshire Arbitration Act, governs the court's review of the
arbitration award. That clause provides that the "Agreement is
made under, and the validity, construction and performance of
this Agreement shall be governed and interpreted in accordance
with, the laws of the State of New Hampshire, United States of
America." Motion for Stay, Ex. A, 5 15 (doc. no. 18) . With
respect to arbitration, however, the same clause provides that
the parties' disputes "shall be finally settled by binding
arbitration to be conducted in the State of New Hampshire in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association."
As is noted above, the parties have proceeded to this point
under the FAA. The court previously held that the FAA governed
the proceedings because the parties' agreement concerns
interstate commerce. Order, Dec. 19, 2001, at 5. MNR did not
challenge that decision and failed to mention it in its present
motion.
Even if this issue had not been resolved previously in this
case, MNR's argument that New Hampshire arbitration law governs
would not succeed. Parties may agree to arbitrate under state
3 law. See, e.g.. Ford v. NYLCare Health Plans of the Gulf Coast,
Inc., 141 F.3d 243, 248-49 (5th Cir. 1998); Ekstrom v. Value
Health, Inc., 68 F.3d 1391, 1395-96 (D.C. Cir. 1995); Int'1
Techs. Integration, Inc. v. Palestine Liberation Org., 66 F.
Supp. 2d 3, 8-10 (D.D.C. 1999). If the parties intend that state
arbitration laws govern their proceedings, however, that intent
must be stated clearly to avoid the presumption that the FAA
governs arbitration. See, e.g., Mastrobuono v. Sherson Lehman
Hutton, Inc., 514 U.S. 52, 63-64 (1995); Roadway Package Sys.,
Inc. v. Kayser, 257 F.3d 287, 294-95 (3d Cir. 2001); Paine Webber
Inc. v. Elahi, 87 F.3d 589, 594 (1st Cir. 1996); Calabria v.
Franklin Templeton Servs., Inc., 2001 WL 1180466, at *3 (N.D.
Cal. Sept. 26, 2001).
In this case, the choice-of-law clause states that the
agreement will be construed under New Hampshire law. At the same
time, however, the clause provides for arbitration under federal
law. Therefore, the FAA, rather than state law, applies to the
court's review of the arbitration proceeding. See Paine Webber,
87 F.3d at 594.
4 B. Motion to Stay the Proceedings
MNR asks the court to stay the proceedings here for ninety
days after September 28, 2004, pursuant to Federal Rule of Civil
Procedure 8 1 (e). Although MNR asserts that it is entitled to
file a motion to vacate the award within one year, as provided by
RSA 542:8, it states that it intends to file its motion within
ninety days as provided under the FAA, 9 U.S.C. § 12. MNR asks
the court not to consider Leader's motion to confirm the award
and to stay the proceedings until it files its motion to vacate.
Leader objects and asserts that under 9 U.S.C. § 12, MNR would
have only three months after August 24, 2004, to file a motion to
vacate.
RSA 542:8 does not apply in this case. Under the FAA, a
party has ninety days to challenge the arbitrator's award. 9
U.S.C. § 12; Prudential-Bache Securities, Inc. v. Tanner, 72 F.3d
234, 239 (1st Cir. 1995). The ninety-day period begins when the
award is "filed or delivered." 9 U.S.C. § 12. As long as the
arbitral award resolves the parties' claims, it is final when it
is filed or delivered and the time under § 12 begins to run,
although the arbitrators may retain jurisdiction to consider
subsidiary matters or reguests for correction. Fradella v.
Petricca, 183 F.3d 17, 19 (1st Cir. 1999).
In this case, there is no dispute that the award issued on
5 August 24, 2004, addressed all of the parties' claims. MNR
contends that the award was received by its counsel on August 25,
2004. Therefore, counting ninety days from August 25, MNR had
until November 23, 2004, to challenge the arbitrators' award in
this proceeding. No such challenge has been filed. Therefore,
MNR's motion to say the proceedings until ninety days from
September 28, 2004, is denied as moot.
MNR filed a motion to vacate on December 2, 2004. Because
the deadline for a motion to vacate was November 23, 2004, that
motion is untimely and will not be considered.
C. Motion to Confirm
A motion to confirm an arbitrators' award may be brought in
this court. 9 U.S.C. § 9. In the award, the arbitrators granted
Leader's claim for money past due in the amount of $495,776.07
with interest accruing from thirty days after the award was
transmitted to the parties and denied all of Leader's other
claims. The award reguires Leader to return MNR's tooling after
MNR pays the amounts awarded. The arbitrators denied MNR's
counterclaims.
MNR did not provide any substantive grounds in opposing
Leader's motion to confirm the award. Having reviewed the award
in light of the parties' filings here, other than the late-filed
6 motion to vacate, the court concludes that it should be
confirmed.
Conclusion
For the foregoing reasons, the plaintiff's petition to
confirm the arbitration award (document no. 12) is granted. The
defendant's motion for a stay of proceedings (document no. 18) is
denied.
The arbitration award is confirmed. The clerk of court
shall enter judgment accordingly when Leader files the papers
reguired by 9 U.S.C. § 13, which shall be filed with the
judgment. After judgment is entered, the clerk of court shall
close the case.
SO ORDERED.
Joseph A. DiClerico, Jr. United States District Judge
December 3, 2004
cc: Ronald E. Cook, Esguire Edwinna C. Vanderzanden, Esguire