Metso Minerals Industries, Inc. v. Maverick Aggregates, Inc.
Opinion
ACCEPTED 04-15-00532-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 9/8/2015 5:10:39 PM KEITH HOTTLE CLERK No.04-15-00532-CV
IN THE COURT OF APPEALS FOURTH DISTRICT OF TEXAS FILED IN SAN ANTONIO, TEXAS 4th COURT OF APPEALS SAN ANTONIO, TEXAS
_______________________________________________________
9/8/2015 5:10:39 PM KEITH E. HOTTLE METSO MINERALS INDUSTRIES, INC., Clerk
Appellant v.
MAVERICK AGGREGATES, INC., Appellee
____________________________________________________________
From the 365th Judicial District Court in Maverick County, Texas, Cause No. 12-09-27789-MCVAJA, Maverick Aggregates, Inc., v. IPE Aggregate, LLC, Metso Minerals Industries, Inc. and Crisp Industries, Inc.
___________________________________________________________
MOTION FOR TEMPORARY ORDERS
_______________________________________________________
TO THE HONORABLE FOURTH COURT OF APPEALS:
Now comes Appellant, Metso Minerals Industries, Inc. (“Metso”), and
pursuant to TEX. R. APP. P. 29.3, files this motion requesting the Court enter
temporary orders pending a final decision in this accelerated interlocutory appeal,
and in support thereof, would show the Court as follows:
INTRODUCTION
Appellant Metso appeals from an interlocutory order signed by the trial court
on August 25, 2015, in which the Court denied Metso’s Application to Compel
Arbitration. Tab 1: (Order)1. The underlying lawsuit brought by appellee,
Maverick Aggregates, Inc., involves allegations of breach of express warranty,
breach of implied warranty of fitness for a particular purpose, breach of implied
warranty of merchantability, breach of contract, and negligent or fraudulent
misrepresentation. Tab 2: (Plaintiff’s Second Amended Petition). Because
Maverick Aggregates seeks to derive a benefit from a contract containing both an
express warranty and a valid arbitration clause, the doctrine of direct benefits
estoppel mandates that Maverick Aggregates arbitrate all of its claims against
Metso. Tab 3: (Application to Compel Arbitration of Metso Minerals Industries,
Inc. at p. 2; Tab 4: (Supplement to Defendant Metso Minerals Industries, Inc.’s
Application to Compel Arbitration of Metso Minerals Industries, Inc. at Ex. Sup-3).
At the trial court’s hearing on arbitrability, Maverick Aggregates argued that
Metso had waived its right to compel arbitration by substantially invoking the
judicial process prior to filing its Application to Compel Arbitration; Metso
adamantly disagreed. RR 13-14, 16-18, 21-35. Despite the fact that Plaintiff failed
to even suggest it had been prejudiced by any such delay, the trial court denied
Metso’s Application to Compel Arbitration. Tab 1; see RR 35. Because a party
does not waive a right to arbitration merely by delay, and because Maverick
Aggregates failed to assert or present any evidence of prejudice, Metso will prevail
in this accelerated interlocutory appeal. See In re Service Corp. Int’l, 85 S.W.3d
1 Metso promptly requested the Clerk’s Record, but as of the date of this filing, it has not yet been made available.
171, 174 (Tex. 2002) (per curiam); see also In re Vesta Ins. Group, Inc., 192
S.W.3d 759, 763-64 (Tex. 2006) (per curiam) (determining that, although the
relators had been litigating for two years in the trial court, the appellant had not
demonstrated sufficient prejudice to overcome the strong presumption against
waiver of the right to compel arbitration).
A stay of the lower court’s proceedings is required in order to protect the
parties’ rights and preserve the jurisdiction of this Court. See In re Merrill Lynch
Trust Co., FSB, 235 S.W.3d 185, 196 (Tex. 2007) (holding that the trial court
abused its discretion in failing to compel arbitration of the plaintiff’s claims and
failing to stay such litigation until the arbitration was concluded); TEX. R. APP. P.
29.3. If Metso is required to attend and conduct depositions during the course of
this appeal, the cost-saving benefits of arbitration will be greatly, if not completely,
reduced, and both the state and federal presumptions in favor of arbitration will be
ignored. All of the defendants are unopposed to a stay of the underlying lawsuit
until such time as this Court makes a final determination in this accelerated
interlocutory appeal.
ISSUE PRESENTED
Because this Court has the authority to issue temporary orders to protect its
jurisdiction or preserve the parties’ rights, should it issue an order staying all of the
proceedings in this matter at the trial court level until a final determination is
reached in this accelerated interlocutory appeal, so that the parties do not have to
conduct expensive and potentially unnecessary discovery?
PERTINENT BACKGROUND
The Fourth Amended Docket Control Order (“DCO”), signed by the
presiding judge on June 10, 2015, mandates numerous deadlines for all parties.
Tab 5: (Fourth Amended DCO). The parties attempted to negotiate a Rule 11
Agreement to stay the upcoming deadlines and, although an agreement was
reached, Maverick Aggregates failed to provide a signed Rule 11 Agreement until
after Metso’s deadline for amending its pleadings. Tab 6: (Email from Plaintiff
with Initial Rule 11 Agreement). Thus, Metso and co-defendant Crisp Industries,
Inc. (“Crisp”) both reluctantly filed their amended pleadings, subject to their
Applications to Compel Arbitration, expressly stating they were only doing so to
comply with the trial court’s mandated deadlines—and not to invoke the judicial
process. Tabs 7, 8: (Amended Answers of Metso and Crisp).
Thereafter, the parties attempted to enter an amended Rule 11 Agreement to
reflect that an accelerated interlocutory appeal would be filed and that the filing of
the Rule 11 Agreement was not intended to constitute an invocation of the judicial
process. Maverick Aggregates was provided with the amended Rule 11
Agreement—signed by all of the defendants—on August 26, 2015. Tab 9:
(Amended Rule 11 Agreement). To date, Plaintiff has failed to sign the agreement,
and has indicated that although it has no objection to suspending deadlines while
the interlocutory appeal is being considered, it is opposed to staying “the entire
case while the Court of Appeals decides whether the case against one of the parties
should be sent to arbitration.” Tab 10: (August 2015 emails between Plaintiff’s
counsel and Metso’s counsel). Thus at this juncture, the underlying proceedings
have not been completely stayed by statute, by order of the Court, or by agreement
of the parties.
ARGUMENT
“When an appeal from an interlocutory order is perfected, the appellate court
may make any temporary orders necessary to preserve the parties’ rights until
disposition of the appeal . . . .” TEX. R. APP. P. 29.3. If alleged claims must be
arbitrated, that proceeding must be given priority so that it is not rendered moot by
deciding the same issues in court. In re Merrill Lynch Trust Co. FSB, 235 S.W.3d
185, 196 (Tex. 2007); cf. TEX. CIV. PRAC. & REM. CODE § 171.025 (a court must
stay a proceeding that involves an issue subject to arbitration if an application for
that order is made under the Texas Arbitration Act). During an interim period, a
stay of litigation ensures that a Plaintiff being compelled to arbitration does not
both have the benefit of a contract while defeating it too. See In re Merrill Lynch
Trust Co., supra.
As Plaintiff’s pleadings and emails show, it would like the benefits from
Metso’s express warranty, but seeks to avoid arbitration. In the process, Maverick
Aggregates is driving up defendants’ legal costs and expenses. See Tab 11:
(Plaintiff’s Response and Objections to Application to Compel Arbitration of
Metso Minerals Industries, Inc. at p. 12) (requesting an evidentiary hearing on the
issue of arbitrability be scheduled “with sufficient time to allow Plaintiff to
conduct written and deposition discovery of witnesses relevant to these issues,
including but not limited to all electronic versions of documents at issue in this
case, and all individuals identified as authors or any and all documents Defendant
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ACCEPTED 04-15-00532-CV FOURTH COURT OF APPEALS SAN ANTONIO, TEXAS 9/8/2015 5:10:39 PM KEITH HOTTLE CLERK No.04-15-00532-CV
IN THE COURT OF APPEALS FOURTH DISTRICT OF TEXAS FILED IN SAN ANTONIO, TEXAS 4th COURT OF APPEALS SAN ANTONIO, TEXAS
_______________________________________________________
9/8/2015 5:10:39 PM KEITH E. HOTTLE METSO MINERALS INDUSTRIES, INC., Clerk
Appellant v.
MAVERICK AGGREGATES, INC., Appellee
____________________________________________________________
From the 365th Judicial District Court in Maverick County, Texas, Cause No. 12-09-27789-MCVAJA, Maverick Aggregates, Inc., v. IPE Aggregate, LLC, Metso Minerals Industries, Inc. and Crisp Industries, Inc.
___________________________________________________________
MOTION FOR TEMPORARY ORDERS
_______________________________________________________
TO THE HONORABLE FOURTH COURT OF APPEALS:
Now comes Appellant, Metso Minerals Industries, Inc. (“Metso”), and
pursuant to TEX. R. APP. P. 29.3, files this motion requesting the Court enter
temporary orders pending a final decision in this accelerated interlocutory appeal,
and in support thereof, would show the Court as follows:
INTRODUCTION
Appellant Metso appeals from an interlocutory order signed by the trial court
on August 25, 2015, in which the Court denied Metso’s Application to Compel
Arbitration. Tab 1: (Order)1. The underlying lawsuit brought by appellee,
Maverick Aggregates, Inc., involves allegations of breach of express warranty,
breach of implied warranty of fitness for a particular purpose, breach of implied
warranty of merchantability, breach of contract, and negligent or fraudulent
misrepresentation. Tab 2: (Plaintiff’s Second Amended Petition). Because
Maverick Aggregates seeks to derive a benefit from a contract containing both an
express warranty and a valid arbitration clause, the doctrine of direct benefits
estoppel mandates that Maverick Aggregates arbitrate all of its claims against
Metso. Tab 3: (Application to Compel Arbitration of Metso Minerals Industries,
Inc. at p. 2; Tab 4: (Supplement to Defendant Metso Minerals Industries, Inc.’s
Application to Compel Arbitration of Metso Minerals Industries, Inc. at Ex. Sup-3).
At the trial court’s hearing on arbitrability, Maverick Aggregates argued that
Metso had waived its right to compel arbitration by substantially invoking the
judicial process prior to filing its Application to Compel Arbitration; Metso
adamantly disagreed. RR 13-14, 16-18, 21-35. Despite the fact that Plaintiff failed
to even suggest it had been prejudiced by any such delay, the trial court denied
Metso’s Application to Compel Arbitration. Tab 1; see RR 35. Because a party
does not waive a right to arbitration merely by delay, and because Maverick
Aggregates failed to assert or present any evidence of prejudice, Metso will prevail
in this accelerated interlocutory appeal. See In re Service Corp. Int’l, 85 S.W.3d
1 Metso promptly requested the Clerk’s Record, but as of the date of this filing, it has not yet been made available.
171, 174 (Tex. 2002) (per curiam); see also In re Vesta Ins. Group, Inc., 192
S.W.3d 759, 763-64 (Tex. 2006) (per curiam) (determining that, although the
relators had been litigating for two years in the trial court, the appellant had not
demonstrated sufficient prejudice to overcome the strong presumption against
waiver of the right to compel arbitration).
A stay of the lower court’s proceedings is required in order to protect the
parties’ rights and preserve the jurisdiction of this Court. See In re Merrill Lynch
Trust Co., FSB, 235 S.W.3d 185, 196 (Tex. 2007) (holding that the trial court
abused its discretion in failing to compel arbitration of the plaintiff’s claims and
failing to stay such litigation until the arbitration was concluded); TEX. R. APP. P.
29.3. If Metso is required to attend and conduct depositions during the course of
this appeal, the cost-saving benefits of arbitration will be greatly, if not completely,
reduced, and both the state and federal presumptions in favor of arbitration will be
ignored. All of the defendants are unopposed to a stay of the underlying lawsuit
until such time as this Court makes a final determination in this accelerated
interlocutory appeal.
ISSUE PRESENTED
Because this Court has the authority to issue temporary orders to protect its
jurisdiction or preserve the parties’ rights, should it issue an order staying all of the
proceedings in this matter at the trial court level until a final determination is
reached in this accelerated interlocutory appeal, so that the parties do not have to
conduct expensive and potentially unnecessary discovery?
PERTINENT BACKGROUND
The Fourth Amended Docket Control Order (“DCO”), signed by the
presiding judge on June 10, 2015, mandates numerous deadlines for all parties.
Tab 5: (Fourth Amended DCO). The parties attempted to negotiate a Rule 11
Agreement to stay the upcoming deadlines and, although an agreement was
reached, Maverick Aggregates failed to provide a signed Rule 11 Agreement until
after Metso’s deadline for amending its pleadings. Tab 6: (Email from Plaintiff
with Initial Rule 11 Agreement). Thus, Metso and co-defendant Crisp Industries,
Inc. (“Crisp”) both reluctantly filed their amended pleadings, subject to their
Applications to Compel Arbitration, expressly stating they were only doing so to
comply with the trial court’s mandated deadlines—and not to invoke the judicial
process. Tabs 7, 8: (Amended Answers of Metso and Crisp).
Thereafter, the parties attempted to enter an amended Rule 11 Agreement to
reflect that an accelerated interlocutory appeal would be filed and that the filing of
the Rule 11 Agreement was not intended to constitute an invocation of the judicial
process. Maverick Aggregates was provided with the amended Rule 11
Agreement—signed by all of the defendants—on August 26, 2015. Tab 9:
(Amended Rule 11 Agreement). To date, Plaintiff has failed to sign the agreement,
and has indicated that although it has no objection to suspending deadlines while
the interlocutory appeal is being considered, it is opposed to staying “the entire
case while the Court of Appeals decides whether the case against one of the parties
should be sent to arbitration.” Tab 10: (August 2015 emails between Plaintiff’s
counsel and Metso’s counsel). Thus at this juncture, the underlying proceedings
have not been completely stayed by statute, by order of the Court, or by agreement
of the parties.
ARGUMENT
“When an appeal from an interlocutory order is perfected, the appellate court
may make any temporary orders necessary to preserve the parties’ rights until
disposition of the appeal . . . .” TEX. R. APP. P. 29.3. If alleged claims must be
arbitrated, that proceeding must be given priority so that it is not rendered moot by
deciding the same issues in court. In re Merrill Lynch Trust Co. FSB, 235 S.W.3d
185, 196 (Tex. 2007); cf. TEX. CIV. PRAC. & REM. CODE § 171.025 (a court must
stay a proceeding that involves an issue subject to arbitration if an application for
that order is made under the Texas Arbitration Act). During an interim period, a
stay of litigation ensures that a Plaintiff being compelled to arbitration does not
both have the benefit of a contract while defeating it too. See In re Merrill Lynch
Trust Co., supra.
As Plaintiff’s pleadings and emails show, it would like the benefits from
Metso’s express warranty, but seeks to avoid arbitration. In the process, Maverick
Aggregates is driving up defendants’ legal costs and expenses. See Tab 11:
(Plaintiff’s Response and Objections to Application to Compel Arbitration of
Metso Minerals Industries, Inc. at p. 12) (requesting an evidentiary hearing on the
issue of arbitrability be scheduled “with sufficient time to allow Plaintiff to
conduct written and deposition discovery of witnesses relevant to these issues,
including but not limited to all electronic versions of documents at issue in this
case, and all individuals identified as authors or any and all documents Defendant
seeks to admit into evidence in this case, together with sufficient time in that
discovery period for the forensic analysis of all documents, necessary computers,
hard drives, backup tapes, and metadata of/from such documents and items.
Plaintiff further requests this Court issue an Order allowing Plaintiff to conduct
electronic discovery with regard to the relevant documents to Defendant’s
Application, permitting the necessary time frame for Plaintiff to conduct forensic
computer analysis prior to the evidentiary hearing in this case”)); Tab 10. In sum,
after initially requesting costly discovery ostensibly to determine the issue of
arbitrability, Plaintiff now contends that it should be allowed to conduct expensive
and time consuming depositions—but without being subject to any deadlines.
Direct benefits estoppel, under which Metso is requesting the Court compel
arbitration, is based in equity. This Court would forfeit its jurisdiction to make a
determination based on this equitable principle, if all of the defendants were forced
to undertake expensive depositions at the bequest of a Plaintiff who would not be
able to compel such depositions in arbitration. See Tab 12, ICC Rules, Article 25.
Further, Metso has the right to request an accelerated appeal on the issue of
arbitrability and should not be unfairly subjected to unnecessary discovery
expenses by Maverick Aggregates. Cf. In re Devon Energy Corp., 332 S.W.3d
543, 548 (Tex. App.—Houston [1st Dist.] 2009, no pet.) (“Courts must focus on
preserving the right to meaningful arbitration rather than addressing potential harm
to the rights of a non-signatory.”).
REQUEST FOR RELIEF
For these reasons, Appellant Metso Minerals Industries, Inc. asks this Court
to grant all orders necessary to preserve this Court’s jurisdiction and protect Metso
Minerals Industries, Inc.’s rights, including:
• Staying all proceedings in the trial court matter (Cause No. 12-
09-27789-MCVAJA in the 365th Judicial District Court in
Maverick County, Texas) as of the date the Notice of Appeal
was signed (August 25, 2015), until such time as this Court
makes a final determination on Metso Mineral Industries, Inc.’s
accelerated interlocutory appeal of the denial of its Application
to Compel Arbitration; and
• Grant Metso Minerals Industries, Inc., all other relief to which
it is entitled.
Respectfully submitted,
/s/Catherine M. Stone CATHERINE M. STONE State Bar No. 19286000 Email: cstone@langleybanack.com PAULA C. BOSTON State Bar No. 24089661 Email: pboston@langleybanack.com LANGLEY & BANACK, INC. 745 E. Mulberry, Ste. 900 San Antonio, Texas 78212 (210) 736-6600 Telephone (210) 735-6889 Facsimile
ATTORNEYS FOR APPELLANT METSO MINERALS INDUSTRIES, INC.
CERTIFICATE OF COMPLIANCE
In compliance with Texas Rule of Appellate Procedure 9.4(i)(3), Appellant Metso Minerals Industries, Inc. certifies that the number of words in Appellant’s Motion for Temporary Orders to Preserve Jurisdiction and Protect Rights Pending Appeal, including its headings, footnotes, and quotations, is: 1,497.
/s/ Paula C. Boston PAULA C. BOSTON
CERTIFICATE OF CONFERENCE
The undersigned attorney has conferred with Appellee’s attorney, Daniel R.
Dutko, regarding this Motion, and he is opposed to it.
/s/ Paula C. Boston PAULA C. BOSTON
CERTIFICATE OF SERVICE
A true and correct copy of the foregoing document has been served upon the following counsel of record pursuant to the Texas Rules of Appellate Procedure on September 8, 2015.
Mr. Daniel R. Dutko HANSZEN LAPORTE 11767 Katy Freeway, Ste. 850 Houston, Texas 77970 DDutko@hanszenlaporte.com FAX: 713-524-2580 ATTORNEYS FOR APPELLEE MAVERICK AGGREGATES, INC.
/s/ Paula C. Boston PAULA C. BOSTON
INDEX OF TABS
Tab 1: Order Denying Application to Compel Arbitration of Metso Minerals Industries, Inc.
Tab 2: Plaintiff’s Second Amended Petition
Tab 3: Application to Compel Arbitration of Metso Minerals Industries, Inc.
Tab 4: Supplement to Defendant Metso Minerals Industries, Inc.’s Application to Compel Arbitration of Metso Minerals Industries, Inc.
Tab 5: Fourth Amended Docket Control Order
Tab 6: Email from Plaintiff with Initial Rule 11 Agreement
Tab 7: Metso Minerals Industries, Inc.’s First Amended Answer to Plaintiff’s First Amended Petition and Cross Claim
Tab 8: Crisp Industries, Inc.’s First Amended Answer and Counterclaim
Tab 9: Amended Rule 11 Agreement
Tab 10: August 2015 Emails between Plaintiff’s counsel and Metso’s counsel
Tab 11: Plaintiff’s Response to Application to Compel Arbitration of Metso’s Minerals Industries, Inc.
Tab 12: ICC Rules
Tab 1 Order
Tab 2 Plaintiff’s Second Amended Petition
CAUSE NO. 12-09-27789-MCVAJA
MAVERICK AGGREGATES, INC. § IN THE DISTRICT COURT Plaintiff § § § 365 TH JUDICIAL DISTRICT § § v. § § IPE AGGREGATE, LLC. § AND METSO MINERALS § INDUSTRIES INC. § Defendants § MAVERICK COUNTY, TEXAS
PLAINTIFF'S SECOND AMENDED PETITION
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW, MAVERICK AGGREGATES, INC .. , hereinafter sometimes referred to
as "Plaintiff', complaining ofiPE AGGREGATE, L.L.C., METSO MINERAL INDUSTRIES,
INC., and CRISP INDUSTRIES, INC. for cause of action would respectfully show unto the
Court as follows:
I. DISCOVERY
1.1 Plaintiff affitmatively pleads that discovery should be conducted in accordance
with a Level II discovery control plan under Rule 190.3 of the Texas Rules of Civil Procedure.
II. PARTIES
2.1 Plaintiff, MAVERICK AGGREGATES, INC., is a Texas corporation doing
business in Texas.
2.2 Defendant, IPE AGGREGATE, L.L.C. is a Texas Limited Liability Company.
Service of process is not necessaty because Defendant has appeared and answered and is currently
before this Comt AT~~\~_. 6'.~;;~~~CI< _ fr/l JUN 04 2013 01 °ffiiC'I'C"b''
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2.3 Defendant, METSO MINERAL INDUSTRIES, INC. is a Texas Corporation.
Service of process is not necessmy because Defendant has appeared and answered and is currently
before this Comt
2.4 Defendm1t, CRISP INDUSTRIES, INC., is a Texas Corporation. Service of process
may be effectuated by serving its President: John Crisp, Crisp Industries, Inc., P.O. Box 326,
Bridgeport, Texas 76426.
III. JURISDICTION & VENUE
3.1 Venue is proper in Maverick County, Texas, pursuant to Section 15.002 (a) (1) of
the Texas Civil Practice and Remedies Code, since all or a substantial part of the events or
omissions giving rise to the claim occurred in Maverick County, Texas.
3.2 Jurisdiction is proper in this Court because the amount in controversy exceeds the
minimum jurisdictional limits of this Court.
IV. FACTS
4.1 Plaintiff, MAVERICK AGGREGATES, INC, purchased a Metso ST358 screener
from Defendant IPE AGGREGATE, LLC. on March 11,2011.
4.2 Plaintiff paid a total of$297,687.00 for the Metso ST358.
4.3 Ignacio Martinez a representative from Defendant IPE AGGREGATE, L.L.C. and
METSO MINERAL INDUSTRIES, INC., represented to plaintiff that the Metso had a near new
condition, but had all the manufacturer warranties for a full year or 1800 hours. CRISP
INDUSTRIES, INC. is an authorized dealer for METSO MINERAL INDUSTRIES, INC. and
which was in fact the owner of the Metso ST358 Screener and who authorized IPE
AGGREGATES, L.L.C. to sell said screener to Plaintiff.
4.4 Since the purchase of the Metso Plaintiff has encountered several mechanical
problems with the Screener which have rendered the Metso ST358 inoperable.
4.5 Plaintiff had to incur repair costs of$ I 5,579.00 to replace a hydraulic pump.
4.6 Plaintiff has found the need to purchase an additional screener in order to
maintain his business in operation and to mitigate its losses.
4.7 On Febmary 21,2012 Defendant IPE AGGREGATE, L.L.C. was given notice of
yet another breakdown which has rendered the Metso inoperable.
V. BREACH OF CONTRACT
5.1 Plaintiff would allege that he entered into a contract with IPE AGGREGATE,
L.L.C .for the purchase of a Metso screener, which included a full factory warranty.
5.2 Plaintiff would further allege that by the terms of the agreement, IPE
AGGREGATE, L.L.C. promised to make valid the full factory watTanty by either IPE
AGGREGATE, L.L.C. performing the repairs or by contacting Defendants METSO MINERAL
INDUSTRIES, INC. and/or CRISP INDUSTRIES, INC., and IPE AGGREGATE, L.L.C. failed
to perform on the watTanty as per the agreement with Plaintiff which constitutes a matetia1
breach of contract.
5.3 Plaintiff would fmiher allege that they have fully performed all conditions,
covenants, and promises under their respective contract with IPE AGGREGATE, L.L.C.
5.4 As of the date of filing this petition Plaintiff MAVERICK AGGREGATES,
INC.'s damages due fi·om Defendants IPE AGGREGATE, L.L.C. and METSO MINERAL
INDUSTRIES, INC. and CRISP INDUSTRIES, INC.'S matetial breach total $313,216.00. IPE
AGGREGATE, L.L.C. and METSO MINERAL INDUSTRIES, INC. and CRISP INDUSTRIES,
INC.'s material breach of its contract with MAVERICK AGGREGATES, INC. has been the
direct and proximate cause of damages to Plaintiff.
5.5 Defendants' conduct has made it necessary for Plaintiff to employ the undersigned
attorney to file this suit. This claim was timely presented to Defendants and remains unpaid. A
reasonable fee for attorney's services rendered and to be rendered in this case collectively is
$80,000.00, plus reasonable attorney fees for any necessary appeals.
VI. NEGLIGENT OR FRAUDALENT MISREPRESENTATION
6.1 On March II, 2011 the Plaintiff was informed by Defendants that the Metso was still
under wananty as it had full manufacture wananty.
6.2 The invoice expressly states that the Metso, has one full year or 1800 hours of
warranty.
6.3 Defendants IPE AGGREGATE, L.L.C. and METSO MINERAL INDUSTRIES,
INC. and CRISP INDUSTRIES, INC. negligently or fi"audulently misrepresented the presence of
a full wananty. This misrepresentation was made with the intent of obtaining an unjust
advantage over the plaintiff, which caused Plaintiff injury
VII. BREACH OF EXPRESS WARRANTY
7.1 The invoice attached hereto, expressly states the full manufacture warranty for one
year or 1800 that the Metso screener has.
7.2 Defendants IPE AGGREGATE, L.L.C. and METSO MINERAL INDUSTRIES,
INC. and CRISP INDUSTRIES, INC. breached this express warranty, and caused Plaintiff
damages.
7.3 Plaintiff asserts a cause of action for recovery of the damages related to this breach
VIII. BREACH OF IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE
8.1 Defendants are all merchants of the Metso Screener, and an action is assetied against
them for breach of implied warranty of fitness for a particular purpose.
8.2 At the time the Defendants entered into the applicable contracts, they had reason to
know that the Met so Screener was being purchased for the purpose of screening different types
of soils, and Defendants' breached this express warranties, and subsequently that Plaintiff has
been damaged for the same, and asserts a cause of action for recovery of its damages related to
this breach.
IX. BREACH OF IMPLIED WARRANTY OF MERCHANTABILITY
9.1 Defendants are all merchants ofMetso Screener, and an action is asserted against
them for breach of implied warranty of merchantability.
9.2 At the time the Defendants entered into the applicable contracts, they had reason to
know that the Metso Screener was being purchased for the purpose of screening different types
of soils, and Defendants breached this implied warranty of merchantability, by selling the
particular Metso Screener that was defective and not reasonably fit for the ordinary purpose for
which the Metso is used for. As a result ofthe breach of this implied wmTanty of
merchantability, the Plaintiff has suffered damages.
X. PRAYER
WHEREFORE, Plaintiff request that the Defendants be served with process, and
that after due proceedings are had, a judgment be entered in favor of the Petitioners and
against the Defendants, jointly and severally, for (i) damages, (ii) attorneys fees, (iii)
costs, (iv) post-judgment and pre-judgment interest at the maximum rate allowable at
law, (v) punitive damages in an amount to be detennined at trial, (vi) all statutmy damages,
(vii) disgorgement of Defendants' profits from sale, (viii) reimbursement for all costs and
expenses insured in the repair of any purchase price paid, including, but not limited to, insurance
co-payments, interest on these amounts from the date of purchase, attomeys' fees and costs, non-
pecuniary damages, as well as any other legal and equitable relief to which Plaintiffs may be
entitled; (ix) diminution in value of the business; (x) any and all other just and equitable relief
that this Court determines just and equitable under the law.
Respectfully submitted,
RUIZ & ASSOCIATES, P. C. 513 N. Ceylon St. Eagle Pass, Texas 78852 Tele hone No.: (830) 773-7500 Fa i ile No.: ( 0) 7 3 7711
ORNEY FOR PLAINTIFF
CERTIFICATE OF SERVIC
I HEREBY CERTIFY that on this ~ day of lllfolb,~Ol3, a true and correct copy
of the Plaintiffs First Amended Petition has been served VIA FACSIMILE TRANSMISSION,
upon the following counsel of record:
Mr. Heribe1to Morales, Jr. LANGLEY & BANACK 401 Quany Street Eagle Pass, Texas 78852 Via Facsimile No. 757-4045
Mr. Oscar A. Garza THE LAW FIRM OF OSCAR A. GARZA, L.L.C. Ill Soledad St. 300 San Antonio, Texas 78205 Via Facsimile No. (21 0) 299-7711
CITATION BY MAILING
THE STATE OF TEXAS
CRISP INDUSTRIES, INC. I BY AND THRU ITS PRESIDENT FOR SERVICE: JOHN CRISP I P.O. BOX 326 I BRIDGEPORT, TX 76426
Defendant, in the hereinafter styled and numbered cause:
NOTICE You have sued. You may employ an attorney. If you or your attorney do not file a written answer with the clerk who issued this citation by 10:00 a.m. on the Monday next following the expiration or twenty days after you were served this citation and petition, default judgment may be taken against you.
YOU ARE HEREBY COMMANDED to appear before the 365TH Judicial District Court of the City of Eagle Pass, Texas, County of Maverick, Texas, by filing a written answer to the Petition of Plaintiff at or before 10:00 a.m. of the Monday next after the expiration of 38 days from the date the citation was placed in the custody of the U.S. Postal Service in accordance with the clerk's standard mailing procedures and state the date that the citation was placed in the custody of the U.S. Postal Service by the clerk. Hereof, a copy of which accompanies the Citation, in Cause Number 12-09-27789-MCVAJA styled MAVERICK AGGREGATES, INC. VS. IPE AGGREGATE, LLC. AND METSO MINERALS INDUSTRIES INC. filed in said Court on 614113. Plaintiff is represented by JOSE J. RUIZ I 513 N. CEYLON ST. I EAGLE PASS, TX 78852. ISSUED AND GIVEN UNDER MY HAND AND SEAL of said court at this office on this 13TH day of JUNE, 2013.
IRENE RODRIGUE~ ' 1 District Clerk, Maverick County, Texas 500 Quarry St. Ste. 5 Eagle Pass, Th~ By:D~1
OFFICER'S RETURN BY MAILING
Came to hand the _ _ day of 20~ and executed by mailing to the Defendant certified mail, return receipt requested to wit restricted delivery a true and correct copy of this citation together with an attached copy of Plaintiffs Petition to the following address:
Defendant Address Service upon the Defendant is evidenced by the return receipt Incorporated herein and attached hereto, signed by _ _ _ _ _ _ _ _ _ _ _ _ _ _ and dated
*Citation was not served despite the following use of diligence to execute service by the officer or person authorized to execute this citation: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __
Citation was not executed b e c a u s e - - - - - - - - - - - - - - - - - - - - - Defendant may be found at: --:--=-:-:c-------------------· To certify which witness my hand officially.
_ _ _ _ _ _ _ _ _ _ _ _ _ _ County, Texas By; _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Deputy Fee for Servicing Citation $ _ _ _ _ __
Tab 3 Application to Compel Arbitration of Metso Minerals Industries, Inc.
CAUSE NO. 12-09-27789-MWAJA
MAVERICK AGGREGATES, INC., § IN THE DISTRICT COURT Plaintiff, § § V. § 365 1h JUDICIAL DISTRICT § IPE AGGREGATE, LLC, § METSO MINERALS INDUSTRIES, INC., § and CRISP INDUSTRIES, INC. § Defendants. § MAVERICK COUNTY, TEXAS
APPLICATION TO COMPEL ARBITRATION OF METSO MINERALS INDUSTRIES, INC.
TO THE HONORABLE JUDGE OF SAID COURT:
Metso Minerals, Industries, Inc. ("Metso"), one of the Defendants in this cause, files this
Application to Compel Arbitration and would show as follows:
SUMMARY OF THE CASE
The subject lawsuit is a breach of contract and warranty action involving a Metso ST358
Screener ("Screener") that Maverick Aggregates, Inc. ("Plaintiff') purchased from Defendant, IPE
Aggregate, LLC ("IPE") on March 11, 2011. In its Second Amended Petition ("Petition"), Plaintiff
alleges that although IPE sold the Screener, at the time of the sale, the machine was owned by
Defendant, Crisp Industries, Inc. ("Crisp"). Petition, par 4.1-4.3. Plaintiff's basic complaint is that
the Screener did not meet its expectations and frequently broke down and, accordingly, all
Defendants breached their contract to Plaintiff.as well as the Screener's "express warranty''.
Petition, par. 7.2. '::::::J lP A~'CLOCKJJLM> FILED {)
fEB 0 5 2015 L~~DO District C '
VIELMA erlck County, T•xas By Deputy
METSO DOCUMENTS
1. Metso sold the Screener to Crisp in December, 2010. A copy of the sales order
confirmation for that purchase by Crisp, inclusive of the bill oflading and the terms and conditions
of the express warranty, are attached as Exhibit A and B. Finally, also attached as Exhibit C is an
email chain between a Metso representative and a Crisp representative generally outlining the terms
of the sale and providing for a warranty of one year or 1,800 hours, whichever comes first.
BASIS FOR MOTION
2. Metso did not have any contractual relationship with Plaintiff with regard to the sale
of this Screener. However, Plaintiff is asserting both breach of warranty and breach of contract
claims against Metso. In that regard, Plaintiff has produced documents it received from IPE which
purport to extend a "full factory warranty," without any explanation as to what that "warranty'' is.
Assuming this factory warranty references Metso, it would show that the only contract/warranty
dealings Metso had with regard to the Screener were with Crisp, namely Exhibits A and C.
3. The sales order (Exhibit A) between Metso and Crisp provides under Paragraph 20
of the terms and conditions that should any dispute arise regarding the agreement, sale of the
machinery or terms of the warranty, the same shall be resolved in the Rules of Arbitration of the
International Chamber of Commerce ("Rules"). (Id. at bates number Metso/Maverick 0163).
4. Because Plaintiff seeks recovery from Metso under a breach of express warranty
theory, and the only warranty Metso extended with regard to the Screener is the standard Metso
product warranty which is described in Exhibits A and C, Plaintiff necessarily has accepted the
benefits of those documents - namely the warranty - and must likewise accept the terms and
conditions of that warranty, to wit: the agreement to arbitrate. Metso, therefore, moves the court to compel arbitration in this proceeding pursuant to the aforementioned Rules as to all parties in this
proceeding and to obey this proceeding accordingly until the arbitration action is terminated.
WHEREFORE, PREMISES CONSIDERED, Metso Minerals Industries, Inc., requests
that this Application to Compel Arbitration be granted and that as granted, the case as to all
parties be referred to arbitration pursuant to Rules referenced in the sales order confirmation
attached as Exhibit A.
Respectfully submitted,
QUARLES & BRADY, LLP 411 East Wisconsin Avenu<;< Suite 2350 Milwaukee, Wisconsin 53202 (414) 277-5365 Telephone (414) 978-8906 Facsimile
LANGLEY & BANACK, INC. 401 Quarry Street Eagle Pass, Texas 78852 (830) 773-6700 Telephone (830) 757-4045 Facsimile
State Bar 1chael C. Boyle State Bar No. 02797600
CERTIFICATE OF SERVICE
I hereby certify that the above and foregoing document has been sent to:
Mr. Jose J. Ruiz VIA FACSIMILE (830) 773-7711 Ruiz & Associates, P.C. 513 Ceylon Street Eagle Pass, Texas 78852
Mr. Oscar A. Garza VIA FACSIMILE (210) 299-7711 The Law Firm of Oscar A. Garza, LLC 111 Soledad Street, Suite 300 San Antonio, Texas 78205
Mr. Michael A. Simpson VIA FACSIMILE (940) 683-3122 Mr. G. Alan Powers Simpson, Boyd & Powers P.O. Box 685 1119 Halsell Street Bridgeport, Texas 76426 > on this 5th day of February, 2015.
t;metso Sales Order Confirmation 3012!19892 .
1 I 3 l!QtoDECtD
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Tctal Eicol. Tax (UBD): 170,000.00
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Fw:,ST 36~ &.ST 458 (1st emall) CMstlan Aparicio to: Ka1hy Laska 12/10/2010 .11:09 AM
fyl
Christian Aparicio Distribution Manager, Southwest US Region Metso Mining and .Con.structlon Technology Moblle+1 (602) 317-8598 Office +1 (480) 9BB-3B15 - Forwarded by Chrfstlan Aparlclo/MKE/Mlnerals/METSO on 12/10/201 o 10:03 AM -
From: ChrlBJlan AparJclo/MKE/Mlnerele/METSO To: dale@crlaplndilstrlea.cem Cc: "Terry" <terry@crfsplndustrles.com> Date: 11/30/2010 10:53 AM Subject. F.le: ST 36B. & ST 468 (tet .emel~
Hello.Dale I'm golnt! to write you 3 e-mails, 1st. Used ST368, 2nd New ST3.B, & 3rd New ST4.8
We hE!-v~.a used ~T~r;;e If! El.P~o (at R~d Machinery former Metso dealer In the area), per mistake this unit was taken off"of .our Inventory list and nobody was·promoting this machine, but this weekend I went to El Pas0 and I saw'1he machine there. I'm going to give you the prfea that we handle last Aprll 2010. The ST358 has 270 hours, and we can pass to ROS!:I .Machinery to see It any time. Distributor Net of 170k and we wlll provide remaining warranty (1,800 hours or 1 year- whichever comes - first) '· . ·-- -- ---.-·--·- ·- --- --···-·-····- -·- -- - -- - - - ··· - - ·- - - - ---· ---=--=-
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l.okolrack ST359 s n A359131 O.pdl ST35B "2. email from Stephane Feb 10.pdl
I can ~rthe first M!3tsO screen square wire mesh set with no cost of the product (only the customer pays the freight) ·
Regards,
Christian Aj:larlclo Distribution Manager, Southwest us Region Metso Mining end Construction Technology . Mobile .+1 (602) ~17'"8598 Office .+1 (480) 988-3615
[ Christian Aparicio JH.~~~l oii~.!t!<~S.!~:\@~~~ .E?~se ln·EJ.:.--·- ~-~-··:11@!J.gijl9· Q4:51:3f PM From: Christian Aparlclo/MKT:/Mlnerala/METSO To: "Dale Greenroy' <dale@crleplnduetrles.com> Cc: obrlstien.eparfolo@metso.com, "Terry" <terry@orlsplnduelrles.com> Date: 11/29/2010 04:51 PM Subjeat Re: ST 358 &..~T 458
EXHIBIT ~ c_
Hello Dale I guess we have a used ST35B In 8 Paso TX. Tomorrow I wlll send you the detalls, when our Inventory control departme.qt send me If the machine Is still avallable.
Regards,
ChristlB!l Aparicio Dls1rlb~on Man~.er, Southwest !JS Region Metso Mining and Construction Technology Mobile +1 (602) 317·8598 Office +1 (480) 98S·3616
[ "Dale Gresnrof
.. - -·- ·---- - - - -·· · --·-·--- - - · -· - ·· - - · - - · ·· -----· - · - - - -- - · ···- --··------- - -
Tab 4 Supplement to Defendant Metso Minerals Industries, Inc.’s Application to Compel Arbitration of Metso Minerals Industries, Inc.
Tab 5 Fourth Amended Docket Control Order
Tab 6 Email from Plaintiff’s counsel with Initial Rule 11 Agreement
From: Daniel Dutko To: Eddie Morales Cc: Norma Moreno; Paula Boston; Eric W. Matzke; Alan Powers; Oscar Garza Subject: RE: Update Request: Order to Deny Application to Compel Arbitration Date: Thursday, August 13, 2015 5:10:01 PM Attachments: image001.png image002.png image003.png doc15390720150813170420.pdf Plaintiff"s Order Denying Application to Compel Arbitration 1.docx Plaintiff"s Order Denying Application to Compel Arbitration 2.docx
Counsel,
Attached is the signed Rule 11 Agreement. Plaintiffs are not in agreement with Defendants’ proposed order.
Instead, we have drafted two alternatives. Please let me know if either of these is acceptable. If not, they we should submit our orders to the court separately.
Daniel
From: Eddie Morales [mailto:hmorales@langleybanack.com] Sent: Tuesday, August 11, 2015 6:42 PM To: Daniel Dutko Cc: Norma Moreno; Paula Boston; Eric W. Matzke; Alan Powers; Oscar Garza Subject: Re: Update Request: Order to Deny Application to Compel Arbitration
Daniel:
If we do not hear from you within 3 business days, we will assume you are in Agreement with the proposed Order and will forward same to the Court since everyone else is on board.
Thanks,
Eddie
Sent from my iPhone
On Aug 11, 2015, at 5:40 PM, Paula Boston <pboston@langleybanack.com> wrote:
Hi Daniel,
Alan Powers and Oscar Garza have both approved (as to form) the Order we sent out yesterday in the Maverick v. Metso matter. Please let us know whether the Order meets with your approval. For your convenience, the Order is attached to this email as well.
Thank you, Paula
Paula Boston pboston@langleybanack.com
<Order Denying Application to Compel Arbitration (L1006405-2x7AEDB).docx>
Tab 7 Metso’s Amended Answers
Tab 8 Amended Answer of Crisp Industries, Inc.
Electronically Filed at 8/12/2015 4:15:10 PM Leopoldo Vielma, District Clerk Maverick County, Texas By: M Cazares, Deputy
CAUSE NO. 12-09-27789-MCVAJA
MAVERICK AGGREGATES, INC. § IN THE DISTRICT COURT OF § Plaintiff § § v. § MAVERICK COUNTY, TEXAS § IPE AGGREGATE, LLC; § METSO MINERALS INDUSTRIES, INC.; § and CRISP INDUSTRIES, INC. § § Defendants § 365TH DISTRICT COURT
DEFENDANT CRISP INDUSTRIES, INC.'S FIRST AMENDED ANSWER AND COUNTERCLAIM
TO THE HONORABLE JUDGE OF SAID COURT:
COMES NOW Defendant Crisp Industries, Inc. (hereinafter "Crisp Industries),
Defendant in the above-styled and referenced suit, and files this its First Amended Answer and
Counterclaim, and in support thereof, would show the Court as follows:
I.
Defendant Crisp Industries, Inc. has filed and has pending an Application to Compel
Arbitration. This First Amended Answer and Counterclaim is only being filed to comply with
the Fourth Amended Docket Control Ordered entered in the above styled matter and is filed
pursuant to the Application to Compel Arbitration. Defendants Crisp Industries is not waiving
its right to Arbitration or attempting to substantially invoke the judicial process, but is merely
attempting to timely comply with the Docket Control Order in place by this Court.
II.
DEFENDANTS' FIRST AMENDED ANSWER
A. General Denial
Defendant Crisp Industries, Inc., as authorized by Rule 92 of the Texas Rules of Civil
First Amended Answer and Counterclaim- Page 1
Electronically Filed at 8/12/2015 4:15:10 PM Leopoldo Vielma, District Clerk Maverick County, Texas By: M Cazares, Deputy
Procedure, herein enters a general denial, denying each and every, all and singular, the
allegations contained in Plaintiffs' Second Amended Petition. Defendant demands strict proof
thereof by a preponderance of the credible evidence, and demand proof of exemplary damages
by clear and convincing evidence.
B. Affirmative Defenses
1. Defendant pleads further, in the alternative and by way of affirmative defense that
in the event Plaintiff compromises or settles or have compromised or settled claims and/or causes
of action against any individual or entity arising out of the claims made subject of this matter
Defendant reserves the right and options granted to Defendant in accordance with Chapter 33 of
the TEX.CIV.PRAC. & REM. CODE.
2. Defendant pleads further, in the alternative and by way of affirmative defense that
Plaintiffs claims are barred in whole or in part for Plaintiffs failure to mitigate damages, if any.
3. Defendant pleads further, in the alternative and by way of affirmative defense that
Plaintiffs damages, if any, are the result of its own acts or omissions.
4. Defendant pleads further, in the alternative and by way of affirmative defense that
if Plaintiff incurred any loss or damages as alleged in Plaintiffs Petition, the same were caused
in whole or in part by acts or omissions of anther or others over whom this answering Defendant
is not responsible, and over which Defendant exercised no control or authority, were the sole
proximate cause or contributing cause of Plaintiffs alleged damages, if any.
5. Defendant pleads further, in the alternative and by way of affirmative defense that
with respect to all claims based upon alleged breach of express or implied warranties, there was
no privity between the Plaintiff and this answering Defendant.
6. Defendant pleads further, in the alternative and by way of affirmative defense that
First Amended Answer and Counterclaim - Page 2
Electronically Filed at 8/12/2015 4:15:10 PM Leopoldo Vielma, District Clerk Maverick County, Texas By: M Cazares, Deputy
Plaintiffs damages, if any, were caused by the misuse, abuse or inappropriate handling of the
product by Plaintiffs or a third party, which was unforeseeable to this answering Defendant, and
was the sole intervening cause of the damages alleged by Plaintiff.
7. Defendant asserts that it intends to rely upon such other defenses as may become
available or apparent during discovery proceedings in this case and hereby reserves its right to
amend its Answer to plead such defenses.
II.
COUNTERCLAIMS
A. Discovery Control Plan
As stated above, Defendant Crisp Industries has an Application to Compel Arbitration on
file and pending before this Court. If after a ruling and all appeals the Application to Compel
Arbitration is denied then this case should proceed as a Level 3 case pursuant to Rule 190.4 of
the Texas Rules of Civil Procedure.
B. Parties
1. Crisp Industries, Inc. is a Texas corporation with its principle place of business in
Bridgeport, Texas.
2. Maverick Aggregates, Inc. is a Texas corporation with its principal place of
business located in Eagle Pass, Texas. Maverick Aggregates, Inc. has appeared herein through
its attorney of record: Daniel R. Dutko, HANSZWN LAPORTE, 11767 Katy Freeway, Suite
850, Houston, Texas 77079.
3. IPE Aggregates, L.L.C. is a Texas Limited Liability Company with its principal
place of business located in New Braunfels, Texas. IPE Aggregates, Inc. has appeared herein
through its attorney of record: Oscar A. Garza, THE LAW FIRM OF OSCAR A. GARZA,
L.L.C., 111 Soledad Street, San Antonio, Texas 78201.
First Amended Answer and Counterclaim - Page 3
Electronically Filed at 8/12/2015 4:15:10 PM Leopoldo Vielma, District Clerk Maverick County, Texas By: M Cazares, Deputy
4. Metso Minerals Industries, Inc. is a corporation who has appeared herein through
its attorney of record: Heriberto Morales, Jr., LANGLEY & BANACK, 401 Quarry Street,
Eagle Pass, Texas 78852.
B. Jurisdiction and Venue
1. The Court has subject-matter jurisdiction over this lawsuit because the amount in
conversation exceeds the minimum jurisdictional amount of this court.
2. Venue is proper pursuant to TEX. Crv. PRAC. & REM. CODE ANN. § 15.002(a)(1)
because all or a substantial part of the events giving rise to the claims occurred in Maverick
County. Venue is also proper because these are counterclaims. TEX. Crv. PRAC. & REM. CODE
ANN.§ 15.062(a).
C. Facts
1. Crisp Industries is a distributor for Metso Minerals (USA) Inc. Crisp Industries
purchased a refurbished Metso ST358 Screener from Defendant Metso Minerals (USA) Inc.
Crisp Industries then resold the Metso ST385 Screener to Defendant IPE Aggregate, LLC.
Crisp Industries did not have any contractual relationship with Plaintiff regarding the sale of the
Metso ST358 Screener. Despite this fact, Plaintiff is asserting claims against Crisp Industries.
2. Because Crisp Industries is a distributor for Metso Minerals (USA) Inc. , Crisp
performs work on Metso equipment. On a number of occasions, Maverick Aggregates, Inc.
contacted Crisp Industries to perform work on the Metso ST385 Screener.
3. In November 2011, Crisp Industries performed work on the Metso ST385
Screener at Maverick Aggregates, Inc.'s request. The work performed in November 2011 on the
Metso ST385 Screener was not work covered by the Metso warranty. As such, Crisp Industries
sent Maverick Aggregates, Inc. an invoice to be paid for the work performed. As shown in the
First Amended Answer and Counterclaim -Page 4
Electronically Filed at 8/12/2015 4:15:10 PM Leopoldo Vielma, District Clerk Maverick County, Texas By: M Cazares, Deputy
itemized and verified account attached hereto and incorporated herein and on the dates evidenced
thereby Crisp Industries sold goods to and performed services for Maverick Aggregates, Inc.
Maverick Aggregates, Inc. accepted the goods and services provided.
4. The invoice dated November 15, 2011, in the amount of $15,579.34 was mailed
to Maverick Aggregate, Inc. and payment was due on December 15, 2011. The price charged for
the work done and goods provided by Crisp Industries were the usual, customary and reasonable
prices for the goods and services performed. Despite the demand for payment to be made, to
date, Crisp Industries' invoice in the amount of $15,579.34 has not been paid. As such, Crisp
Industries has incurred damages for the nonpayment of its invoices for services and goods
rendered.
D. Causes of Actions
l. Suit On Sworn Account (Maverick Aggregates, Inc.).: In November 2011, Crisp
Industries sold goods and furnished services to Maverick Aggregates, Inc. regarding the Metso
ST385 Screener The prices charged for the goods and services rendered were just and true
because they were the usual, customary and reasonable prices for the goods and services
provided. Attached hereto as Exhibit A and incorporated herein is a systematic record of the
transaction for the services and ·goods rendered for the Metso ST385 Screener. All lawful
offsets, payments and credits, if any, have been applied to Maverick Aggregates, Inc. account.
To date, the invoice in the amount of $15,579.34 that was due on December 15, 2011 remains
unpaid. As such, Crisp Industries is entitled to damages for its actual liquidated damages. In
addition, Crisp Industries is entitled to reasonable and necessary attorney fees. TEX.CIV.PRAC. &
REM.CODE §38.001.
First Amended Answer and Counterclaim - Page 5
Electronically Filed at 8/12/2015 4:15:10 PM Leopoldo Vielma, District Clerk Maverick County, Texas By: M Cazares, Deputy
2. Breach of Contract (Maverick Aggregates, Inc.): In the alternative, Maverick
Aggregate, Inc. breached its agreement to pay for services and goods provided by Crisp
Industries. As set forth above, Maverick Aggregates, Inc. breached its contract by failing to pay
the invoice for the services and goods provided by Crisp Industries in the amount of $15,579.34.
The breach of contract by Maverick Aggregates, Inc. caused legal injury damages to Crisp
Industries. The damages sustained by Crisp Industries are general and specific, as well as direct
and consequential. Crisp Industries damages including, but are not limited to, benefit of the
bargain damages, out-of-pocket damages, reliance damages, and consequential damages. In
addition, Crisp Industries is entitled to reasonable and necessary attorney fees. TEx.Civ.PRAC. &
REM.CODE §38.00 1.
3. Quantum Meruit (Maverick Aggregates, Inc.): In the alternative, Crisp
Industries provided valuable services or materials for the benefit of Maverick Aggregates, Inc.,
including but not limited to the work performed on or about November 15, 20 11 on the Metso
ST385 Screener. Maverick Aggregates, Inc. accepted and benefited from those services and
materials. Maverick Aggregates, Inc. had reasonable notice that Crisp Industries anticipated
compensation for such services and materials as recognized by Carlos Gonzalez signed
acceptance of the services and goods on behalf of Maverick Aggregates, Inc. on November 11 ,
2011. As such, Maverick Aggregates, Inc. caused injuries to Crisp Industries. Crisp Industries
are entitled to actual damages. In addition, Crisp Industries is entitled to reasonabl e and
necessary attorney fees. TEx.Civ.PRAc. & REM.CODE §38.001.
4. Promissory Estoppel (Maverick Aggregates, Inc.): In the alternative, Maverick
Aggregates, Inc. made one or more promises, including but not limited to promising Crisp
Industries payment for the services and goods provided to Maverick Aggregates, Inc. for work
First Amended Answer and Counterclaim - Page 6
Electronically Filed at 8/12/2015 4:15:10 PM Leopoldo Vielma, District Clerk Maverick County, Texas By: M Cazares, Deputy
done on the Metso ST385 Screener. Crisp Industries reasonably and substantially relied on this
promise to their detriment by providing their time and services in working on the Metso ST385
Screener. Crisp Industries reliance was foreseeable to Maverick Aggregates, Inc. and law and
equity requires that Maverick Aggregates, Inc. 's promise be enforced. Crisp Industries is
entitled reliance damages where it is entitled to be compensated for the time, effort and expense
of the work done on the Metso ST385 Screener. In addition, Crisp Industries is entitled to
reasonable and necessary attorney fees. TEx.CJv.PRAC. & REM.CODE §38.001.
WHEREFORE, PREMISES CONSIDERED, Crisp Industries, Inc. prays (1) that all
relief prayed for by Maverick Aggregates be denied; (2) judgment be entered in Defendant Crisp
Industries, Inc.; (3) that Crisp Industries, Inc. recover damages; (4) court costs; (5) reasonable
attorney fees; (6) pre-judgment and post-judgment interest as provided by law; (7) for such other
and further relief to which it may be justly entitled; and (8) that Maverick Aggregates take
nothing.
BY: Is/ G. Alan Powers
SIMPSON, BOYD, POWERS & WILLIAMSON Michael A. Simpson Texas State Bar No. 18403650 G. Alan Powers State Bar No. 24005089 P.O. Box 685 1119 Halsell Street Bridgeport, Texas 76426 Telephone No. (940) 683-4098 Facsimile No. (940) 683-3122 ATTORNEYS FOR CRISP INDUSTRIES, INC.
First Amended Answer and Counterclaim - Page 7
Electronically Filed at 8/12/2015 4:15:10 PM Leopoldo Vielma, District Clerk Maverick County, Texas By: M Cazares, Deputy
CERTIFICATE OF SERVICE
By my signature above, I hereby certify that a true and correct copy of the forgoing document was served on Defendants via Fax and/or Certified Mail on this the lth day of August, 2015.
First Amended Answer and Counterclaim - Page 8
Tab 9 Amended Rule 11 Agreement
Tab 10 August 2015 emails between Plaintiff’s counsel and Metso’s counsel
From: Daniel Dutko To: Paula Boston Cc: Eddie Morales; Eric W. Matzke; Norma Moreno; Oscar Garza; Alan Powers Subject: RE: Mav v Metso: Conferring on possible Motion for Temporary Orders (to stay trial court proceedings while interlocutory appeal is decided)
Date: Friday, August 21, 2015 8:37:39 AM Attachments: image001.png image002.png image003.png
I have no objection to suspending the deadlines (expert designations, discovery deadline, etc.) while the interlocutory appeal is being considered. When the appeal is decided we can enter into a new DCO with new deadlines if that is what everyone wants. However, there is no reason to stay the entire case while the Court of Appeals decides whether the case against one of the parties should be sent to arbitration. We need to take depositions and resolve several discovery disputes. This can all be accomplished while the appeal is being heard.
Daniel
From: Paula Boston [mailto:pboston@langleybanack.com] Sent: Thursday, August 20, 2015 6:25 PM To: Daniel Dutko Cc: Eddie Morales; Eric W. Matzke; Norma Moreno; Oscar Garza; Alan Powers Subject: RE: Mav v Metso: Conferring on possible Motion for Temporary Orders (to stay trial court proceedings while interlocutory appeal is decided)
Hi Daniel,
Could you please clarify what you mean by agreeing to move current deadlines as requested by Crisp? The last draft of the Rule 11 you were in agreement with stated: “[t]his letter will confirm our agreement that the parties agree to suspend the deadlines in the current amended docket control order until after a ruling on the mandamus that will be filed regarding the Order on the Motion to Compel Arbitration.” But, now it appears that you’re opposed to staying the underlying case during an accelerated appeal. Perhaps I’ve missed an email or conversation with additional details?
Many thanks, Paula
Paula Boston pboston@langleybanack.com
From: Daniel Dutko [mailto:DDutko@hanszenlaporte.com] Sent: Thursday, August 20, 2015 5:42 PM
To: Paula Boston Cc: Eddie Morales; Eric W. Matzke; Norma Moreno; Oscar Garza; Alan Powers Subject: Re: Mav v Metso: Conferring on possible Motion for Temporary Orders (to stay trial court proceedings while interlocutory appeal is decided)
Paula,
Unfortunately after talking to my client we are opposed to staying the underlying case during the Interlocutory appeal. However, we will agree to move current deadlines as requested by Crisp.
Daniel
Sent from my iPhone
On Aug 20, 2015, at 12:25 PM, Paula Boston <pboston@langleybanack.com> wrote:
Good afternoon, Daniel:
When we last spoke, you mentioned that Maverick Aggregates would not likely be opposed to a motion staying the underlying trial court proceedings during this appeal. Oscar and Alan have responded to my email, below, that they are unopposed . . . but we haven’t heard back from Maverick. To avoid any last-minute filing issues, I will assume that there remains no opposition from Maverick Aggregates to our requesting that the appellate court stay the trial court proceedings pending the 4th Court’s determination, unless I hear otherwise from you before noon tomorrow. If you have any questions, as always, I am available to confer via phone: 210-736-6600 (ext. 168).
All the best, Paula
Paula Boston pboston@langleybanack.com
<image002.png>
From: Paula Boston Sent: Tuesday, August 18, 2015 4:55 PM To: Daniel Dutko; Oscar Garza; Alan Powers Cc: Eddie Morales; Eric W. Matzke; Norma Moreno Subject: Mav v Metso: Conferring on possible Motion for Temporary Orders (to stay trial court proceedings while interlocutory appeal is decided)
Hi Alan, Daniel, and Oscar,
If we receive the trial court’s signed order shortly, we may well request temporary orders from the appellate court to stay the trial court proceedings. Is there any objection to our requesting that the 4th Court of Appeals stay all trial court proceedings in this matter pending the 4th Court’s determination on our (soon-to-be-perfected) accelerated interlocutory appeal?
Many thanks, Paula
Paula Boston pboston@langleybanack.com
<image002.png>
Tab 11 Plaintiff’s Response and Objections to Application to Compel Arbitration of Metso Minerals Industries, Inc.
Cause No. 12-09-27789-MCVAJA
MAVERICK AGGREGATES, INC. § IN THE DISTRICT COURT OF § v. § MAVERICK COUNTY § IPE AGGREGATE, LLC; and METSO § MINERALS INDUSTRIES, INC. § 365TH JUDICIAL DISTRICT
PLAINTIFF’S RESPONSE AND OBJECTIONS TO APPLICATION TO COMPEL ARBITRATION OF METSO MINERALS INDUSTRIES, INC.
COMES NOW, Maverick Aggregates, Inc. (“Plaintiff”) and files this Plaintiff’s Response
and Objections to Application to Compel Arbitration of Metso Minerals Industries, Inc.,
(“Metso”) and in support thereof would show unto this Honorable Court the following:
1. REQUEST FOR ADDITIONAL TIME TO SUPPLEMENT RESPONSE
Plaintiff respectfully requests additional time to respond to this Application to Compel
Arbitration. Current Plaintiff’s counsel recently substituted into the case and needs time to
familiarize with the documents and the facts.
More importantly, the depositions of the representative of IPE Aggregate LLC (“IPE”)
may have a direct impact on the alleged arbitration provision. As such, Metso’s Application
should not be considered until the deposition of IPE’s representative can be taken.
2. METSO’S APPLICATION IS EXTREMELY UNTIMELY AND SHOULD BE DENIED
Under Texas law, the right to a jury trial is so strongly favored that the right to a jury
trial should not be not be interfered with lightly. 1
1 See In re Prudential Ins. Co. of America, 148 S.W.3d 124, 132 33 (Tex.2004).
There is a presumption against the waiver of the constitutional right to a jury trial. 2 The
existence of the basic fact of a contractual jury trial waiver gives rise to a presumed fact that the
waiver was not knowingly and voluntarily made until the presumed fact is rebutted, and the
burden is on the party seeking to enforce the prelitigation contractual jury waiver to rebut the
presumption with evidence that the waiver was knowingly and voluntarily made with full
awareness of the legal consequences. Id.
A. Metso’s Reliance on Jury Waiver is Untimely
Because the right to a jury trial is so strongly favored, to enforce a contractual jury waiver
the party asserting the waiver must act with diligence in asserting its rights. See Rivercenter
Associates v. Rivera, 858 S.W.2d 366 (Tex. 1993); see also Rogers v. Ricane Enters., 772 S.W.2d 76, 80
(Tex.1989). The failure to act with diligence results in a waiver of the right to enforce a
contractual jury waiver. 3
In Rivercenter Associates v. Rivera, Rivercenter brought suit against All Ashore, Inc. and Les
Robbins to recover rental payments after All Ashore's alleged default on its lease of store space
in the Rivercenter shopping mall. 4 Defendants filed a jury demand and paid the filing fee on
March 17, 1992. On July 14, 1992, Rivercenter filed a motion to set a date for trial on the jury
docket. Two weeks later, Rivercenter filed a motion to quash the jury demand based on jury
waiver provisions in its contracts with All Ashore and Robbins. The trial court overruled this
motion and assigned the case to the jury docket. 5
The Texas Supreme Court denied mandamus because Rivercenter did not move to quash
2 Mikey's Houses LLC v. Bank of America, N.A., 232 S.W.3d 145 (Tex. App. Fort Worth 2007, no pet.). 3 Id. 4 See Rivercenter Associates v. Rivera, 858 S.W.2d 366 (Tex. 1993). 5 Id.
a jury demand that conflicted with a jury waiver until four months after receiving notice of the
jury demand. The court reasoned that “those who slumber on their rights” are not entitled to the
rights. 6
The Texas Supreme Court held:
Rivercenter waited over four months after the filing of the Defendants' jury demand before asserting any rights it may have had under the jury waiver provisions. The record reveals no justification for this delay. Under these circumstances, Rivercenter has not shown diligent pursuit of any right to a non-jury trial. See Bailey v. Baker, 696 S.W.2d 255, 256 (Tex.App.-Houston [14th Dist.] 1985, orig. proceeding). . . Accordingly, the petition is denied. 7
In this case, Plaintiff filed its Petition on September 4, 2012 and Metso filed its Original
Answer on September 28, 2012. Metso filed its Application to Compel Arbitration on February
5, 2015, more than two years after Metso made an appearance.
According to the Texas Supreme Court, waiting four months would be a lack of due
diligence. 8 In this case, Plaintiff waited more than two years to assert their rights under the
alleged arbitration provisions. Therefore, Metso failed to act with the diligence necessary to
assert its rights and its Application should be denied as a matter of law.
3. METSO FAILED TO MEET ITS INITIAL BURDEN OF PROOF
There is a presumption against the waiver of the constitutional right to a jury trial. 9 The
existence of the basic fact of a contractual jury trial waiver gives rise to a presumed fact that the
waiver was not knowingly and voluntarily made until the presumed fact is rebutted, and the
burden is on the party seeking to enforce the prelitigation contractual jury waiver to rebut the
6 See Rivercenter Associates v. Rivera 858 S.W.2d 366 (Tex. 1993). 7 Id. 8 See Rivercenter Associates v. Rivera 858 S.W.2d 366 (Tex. 1993). 9 Mikey's Houses LLC v. Bank of America, N.A., 232 S.W.3d 145 (Tex. App. Fort Worth 2007, no pet.); In re Wells Fargo Bank Minnesota N.A., 115 S.W.3d 600 (Tex. App. Houston 14th Dist. 2003).
presumption with evidence that the waiver was knowingly and voluntarily made with full
awareness of the legal consequences. 10 The party seeking to enforce a contractual jury waiver
must rebut the presumption against the waiver by bringing forward prima facie evidence that
the jury waiver was knowingly and voluntarily made. 11
The party seeking to enforce a contractual jury waiver should present evidence of the
following factors:
• The parties' experience in negotiating the particular type of contract signed;
• Whether the parties were represented by counsel;
• Whether the waiving party's counsel had an opportunity to examine the agreement;
• The parties' negotiations concerning the entire agreement;
• The parties' negotiations concerning the waiver provision, if any;
• The conspicuousness of the provision; and
• The relative bargaining power of the parties. 12
Defendant, in its three page Motion, presented no evidence to prove its burden. Before
this Court takes away the Constitutional and fundamental right to a jury trial, Defendant must
present prima facie evidence that the jury waiver was knowingly and voluntarily made.
Defendant failed to present any evidence in this case to rebut the presumption against the
waiver of the constitutional right to a jury trial.
10 Id. 11 Id. 12 See Mikey's Houses LLC v. Bank of America, N.A., 232 S.W.3d 145 (Tex. App. Fort Worth 2007, no pet.); In re Wells Fargo Bank Minnesota N.A., 115 S.W.3d 600 (Tex. App. Houston 14th Dist. 2003).
Therefore, this Court should deny Defendant’s Motion as a matter of law. 13
Assuming arguendo that this Court entertains Metso’s Application, Plaintiff responds as
follows:
4. FACTUAL BACKGROUND
Plaintiff has initiated litigation in this Court against Defendants for misrepresentations
made by Defendants in conjunction with the sale and purchase of a Metso ST358 screener to
Plaintiff. Plaintiff is seeking damages and relief pursuant to the Texas Deceptive Trade
Practices—Consumer Protection Act as well as other relief pursuant to Texas law. Metso seeks
through its Application to Compel Arbitration to force an arbitration proceeding upon Plaintiff
based upon its allegation that Plaintiff’s claims in this suit are subject to an arbitration
agreement.
5. LEGAL BURDENS AND STANDARDS
A. Defendant must first establish the existence of an enforceable contract to arbitrate the claims at issue in this suit
The first inquiry this Court must undertake is to determine whether Metso has
established, under the laws of the State of Texas 14, (1) “that a valid arbitration agreement
exists” 15 and also (2) “whether the dispute in question falls within the scope of that
arbitration” 16 agreement. “Arbitration is a matter of contract and a party cannot be required to
13 See Mikey's Houses LLC v. Bank of America, N.A., 232 S.W.3d 145 (Tex. App. Fort Worth 2007, no pet.); In re Wells Fargo Bank Minnesota N.A., 115 S.W.3d 600 (Tex. App. Houston 14th Dist. 2003). 14 Banc One Acceptance Corp. v. Hill, 367 F.3d 426, 429 (5th Cir. Miss. 2004); Jones v. Defendant Co., 2008 U.S. Dist. LEXIS 38099, 8-9 (S.D. Tex. May 9, 2008). 15 In re Igloo Prods. Corp., 238 S.W.3d 574, 577 (Tex. App.−Houston [14th Dist.] 2007, no pet.) (Citations Omitted) see also Tex. Civ. Prac. & Rem. Code §171.021. 16 Webb v. Investacorp, Inc., 89 F.3d 252, 258 (5th Cir. 1996); In re Kellogg Brown & Root, Inc., 166 S.W.3d 732, 737 (Tex. 2005).
submit to arbitration any dispute which he has not agreed so to submit.” 17 “Arbitration may be
ordered only for a dispute that the parties have agreed to arbitrate.” 18 “When [the courts] are
called upon to decide whether the parties have agreed to arbitrate, [they] do not resolve doubts
or indulge a presumption in favor of arbitration.” 19
“Under standard contract principles, the presence or absence of signatures on a written
contract is relevant to determining whether the contract is binding on the parties.” 20 In the
absence of a signature, other evidence must be relied upon to prove the party’s unconditional
assent. 21
Similarly, an agreement to arbitrate is valid under the Federal Arbitration Act (“FAA”) if
it meets the requirements of the general contract law of the applicable state. In determining the
validity of an agreement to arbitrate under the FAA, courts must first apply state law governing
contract formation. 22 Section 4 of the FAA requires a court to order a party to arbitration only
upon a showing that an agreement to arbitrate the claims at issue exists. 23 Therefore, “a state
court must initially determine—through the neutral application of its own contract law—
whether an enforceable agreement exists in the first instance, and whether ‘generally applicable
contract defenses . . . may be applied to invalidate arbitration agreements without contravening’
the policies of the FAA.’” 24 In other words, the FAA has not been read so broadly as to mandate
17 AT&T Techs., Inc. v. Communications Workers of Am., 475 U.S. 643 (1986). See also Rice Co. v. Precious Flowers Limited, 523 F.3d 528 (5th Cir. 2008); Baton Rouge Oil & Chem. Workers Union v. Exxonmobil Corp., 289 F.3d 373 (5th Cir. 2002). 18 Baton Rouge Oil & Chem. Workers Union v. Exxonmobil Corp., 289 F.3d 373 (5th Cir. 2002). 19 In re: Bunzl USA Inc., 155 S.W.3d 202, 208 (Tex.App.—El Paso, 2004). 20 Id. at 209.
21 Id. (emphasis added). 22 In re Poly-America, L.P., 2008 Tex. Lexis 770 at *3 (Tex. 2008) (citing In re Advance PCS Health L.P., 172 S.W.3d 603, 606 (Tex 2005) (citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct.1920, 131 L.Ed.2d 985 (1995))) (emphasis added). 23 9 U.S.C. § 4. 24 In re Poly-America, L.P., 2008 Tex. Lexis 770 at *4 (Tex. 2008) (citing Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996) (emphasis added).
preemption of all state public-policy grounds for finding an arbitration agreement
unenforceable.
When both the FAA and Texas state law are applicable to an arbitration agreement, the
Fifth Circuit has clarified the interplay between the two bodies of law by holding that “the FAA
and Texas law, including [Texas’] arbitration law, apply concurrently because Texas law
incorporates the FAA as part of the substantive law of that state.” 25
If Metso establishes the existence of a valid arbitration agreement between it and
Plaintiff, and that both the claims and issues in this case fall within the terms of that agreement,
then “the burden shifts to the party opposing arbitration to present a valid defense to the
agreement,” 26 as adjudged under the laws of this state.
B. Unless the Application is denied, an evidentiary hearing is required when material facts are in dispute
11. The Court’s standard for consideration of an application to compel arbitration,
under Texas law, is the same as that for consideration of a motion for summary judgment. 27
“Under Texas Rule of Civil Procedure 166a(c), the party moving for summary judgment bears
the burden to show that no genuine issue of material fact exists and that it is entitled to
judgment as a matter of law.” 28 “When reviewing a summary judgment, we take as true all
25 Jones v. Defendant Co., 2008 U.S. Dist. LEXIS 38099, 23 (S.D. Tex. May 9, 2008) (citing Freudensprung v. Offshore Technical Services, Inc., 379 F.3d 327, 338 n.7 (5th Cir. 2004) (citing Pedcor Management Co., Inc. Welfare Benefit Plan v. Nations Personnel, 343 F.3d 355, 361 (5th Cir. 2003); L & L Kempwood Associates v. Omega Builders, Inc., 9 S.W.3d 125, 127-28 & n. 15 (Tex. 1999)). 26 In re Igloo Prods. Corp. at 577. 27 Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266 (Tex. 1992). 28 Joe v. Two Thirty Nine J.V., 145 S.W.3d 150 (Tex. 2004). See also Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211 (Tex. 2002); Haase v. Glazner, 62 S.W.3d 795, 797 (Tex. 2001); Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997); Nixon v. Mr. Property Management Co., 690 S.W.2d 546 (Tex. 1985); Nichols v. Tanglewood Manor Apts., 2006 Tex. App. LEXIS 975 (Tex. App. Houston 14th Dist. Feb. 7, 2006).
evidence favorable to the nonmovant, and we indulge every reasonable inference and resolve any
doubts in the nonmovant's favor.” 29
In a case of first impression on the issue in Texas, the Court in Jack B. Anglin Co, Inc. sets
out the following reasoning for the standard:
Summary disposition of contested issues is the exception under our rules of civil procedure. Ordinarily, contested issues are decided after a plenary hearing, that is, a hearing at which witnesses present sworn testimony in person or by deposition rather than by affidavit. For example, our rules permit trial courts to render final judgments in civil cases on motions for summary judgment. A trial court may render a summary judgment based on a record consisting of deposition transcripts, interrogatory answers, and other discovery responses, along with pleadings, admissions, affidavits, stipulations, and authenticated or certified public records . . . . Our rules also prescribe summary determination of motions to transfer venue, objections to discovery requests, and special appearances contesting jurisdiction. These matters are likewise determinable on the basis of affidavits, pleadings, the results of discovery, and the stipulations of the parties. TEX. R. CIV. P. 87, 88 (venue); TEX. R. CIV. P. 166b(4) (objections to discovery); TEX. R. CIV. P. 120a(3) (special appearance). 30
The Court in Jack B. Anglin Co, Inc. then held that “[w]ith these considerations in mind, a
trial court may summarily decide whether to compel arbitration on the basis of affidavits,
pleadings, discovery, and stipulations. However, if the material facts necessary to determine the
issue are controverted, by an opposing affidavit or otherwise admissible evidence, the trial court
must conduct an evidentiary hearing to determine the disputed material facts.” 31
Appellate Courts have explained the procedure to compel arbitration as follows:
The party alleging an arbitration agreement must present complete summary proof of his ‘case in chief’ that an agreement to arbitrate requires arbitration of the issues in dispute. If that summary proof intrinsically raises issues about the procedural enforceability of the agreement, the movant’s summary proof should include any evidence that resolves those issues without creating an issue of
29 Joe v. Two Thirty Nine J.V., 145 S.W.3d 150 (Tex. 2004). See also Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211 (Tex. 2002); Haase v. Glazner, 62 S.W.3d 795, 797 (Tex. 2001); Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); Sci. Spectrum, Inc. v. Martinez, 941 S.W.2d 910, 911 (Tex. 1997); Nixon v. Mr. Property Management Co., 690 S.W.2d 546 (Tex. 1985); Nichols v. Tanglewood Manor Apts., 2006 Tex. App. LEXIS 975 (Tex. App. Houston 14th Dist. Feb. 7, 2006). 30 Jack B. Anglin Co. at 269 (Citations Omitted). 31 Id. (Emphasis Added).
material fact. Naturally, the non-movant, to resist summary arbitration, needs only to raise an issue of material fact about a necessary element of its opponent’s ‘case in chief’ or present some evidence supporting every element of a defensive claim that there is no enforceable agreement to arbitrate. 32
Similarly, the FAA also provides a procedure for obtaining an evidentiary hearing, prior
to deciding a motion to compel arbitration, if the “making of the arbitration agreement or the
failure, neglect, refusal to perform the same be in issue.” 33 Section 4 of the FAA further provides
that the party alleged to be in default may request a jury at the trial thereof, and such shall be
provided upon proper request. The hearing shall be held in accordance with the Federal Rules
of Civil Procedure. 34 If the jury, or the court if no jury is requested, “finds that no agreement in
writing for arbitration was made or that there is no default in proceeding thereunder, the
proceeding [on the motion to compel] shall be dismissed.” 35
6. ARGUMENTS
A. The Application to Compel Should Properly Be Denied Because Defendant Has Failed to Show the Existence of a Valid and Enforceable Arbitration Agreement with Plaintiff
Metso has the burden to prove with sufficient evidence that a valid and enforceable
arbitration agreement exists between the parties which encompasses and governs the disputes
and issues forming the basis for this suit. Defendant’s Application fails in this respect because
Defendant has failed to show that there was ever an agreement between it and Plaintiff to
arbitrate—that is, to submit a dispute to arbitration.
i. Defendant has failed to proffer any valid and enforceable arbitration agreement between Plaintiff and Defendant
32 In re: Bunzl USA Inc., 155 S.W.3d 202, 208 (Tex.App.—El Paso, 2004) (citing In re Jebia, 26 S.W.3d 753 (Tex.App.—Houston [14th Dist.] 2000, orig. proceeding)). 33 9 U.S.C. § 4 34 Id. 35 Id.
Subject to the objections to the documentary evidence below, and without waiving same,
Defendant has not offered any admissible evidence of a valid and enforceable arbitration
agreement between Plaintiff and Defendant that encompasses the claims at issue in this case.
Plaintiff cannot be held to an agreement that Defendant cannot show was ever entered
into by Plaintiff. Basic contract law mandates an offer and meeting of the minds to form a
contract. There was no meeting of the minds between Plaintiff and Defendant with respect to
any agreement to arbitrate. In fact, there was not even a discussion or negotiation whatsoever
regarding the arbitration clause. Further, no consideration was given to support the alleged
arbitration agreement. Simply, Defendant has failed to proffer any arbitration agreement that
satisfies the requirements of basic contract law. In fact, in its own application to compel
arbitration, Defendant states that “Metso did not have any contractual relationship with
Plaintiff with regard to the sale of this Screener.” 36 Clearly, Defendant has wholly failed to show,
as a matter of law, that Plaintiff intended to assent to the instrument containing the arbitration
clause. Moreover, Plaintiff cannot be held to an agreement that cannot be read and is illegible
and indecipherable. As Defendant has wholly failed to carry its evidentiary burden in this case
and proffer any enforceable and valid arbitration agreement between Plaintiff and Defendant,
Defendant’s Application must be denied.
36 See Application to Compel Arbitration of Metso Minerals Industries, Inc., Page 2, Paragraph 2, attached hereto as Exhibit A and incorporated by reference for all purposes.
ii. Objections to Exhibits proffered by Defendant in its Application
Defendant’s Application further fails, based upon the following objections, because the
evidence it is seeking to submit and rely upon in its Application is inadmissible as a matter of
law.
Plaintiff objects to the admissibility of Exhibit A, B, and C to Defendant’s Application in
that Defendant fails to provide the requisite evidentiary predicate and testimony required by
Texas Rules of Evidence 803(6), 803(7), and 902(10), and fails to provide testimony, from a
person with knowledge, that the alleged records:
• were made at or near the time the matter recorded occurred; 37 • were made either by a person with knowledge of the matter recorded or from information transmitted by a person with knowledge of the matter recorded; 38 • were kept in the course of a regularly conducted business activity; and • it was the regular practice of Defendant to make the records. 39
Pursuant to Texas Rule of Evidence 1002, Plaintiff further objects that Exhibits A, B, and
C to Defendant’s Application are not the best evidence of the contents of the documents
Defendant is attempting to proffer in this case. Additionally, Exhibits A and B to Defendant’s
Application are illegible. The terms of the alleged agreement cannot be read or determined, and
are thus unenforceable. 40
As such, the inadmissible evidence contained in Defendant’s Application must be
stricken. The evidentiary failures and lack of proper authentication of the proffered documents
cause Defendant to fail in its burden to establish that a valid arbitration agreement exists
between Plaintiff and Defendant, and the Application should therefore be denied. 37 GT & MC, Inc. v. Texas City Refining, Inc., 822 S.W.2d 252, 257 (Tex.App.—Houston [1st Dist.] 1991, writ denied). 38 Sholdra v. Bluebonnet Sav. Bank, 858 S.W.2d 533, 535 (Tex.App.—Ft. Worth 1993, writ denied); Woodard v. State, 696 S.W.2d 622, 628 (Tex.App.—Dallas 1985, no writ). 39 Texas Employer’s Ins. Ass’n v. Sauceda, 636 S.W.2d 494, 499 (Civ.App.—San Antonio 1982, no writ). 40 Attached hereto as Exhibit “B” is a true and correct copy of Exhibits A and B to Defendant’s Application received by Plaintiff.
iii. Demand for evidentiary hearing, discovery, and jury trial of arbitrability
Alternatively, by way of alternative pleading and without waiving the foregoing, if the
Court is not inclined to strike the inadmissible evidence contained in Defendant’s Application,
and deny the Application, Plaintiff requests the Court schedule a formal evidentiary hearing of
all contested and disputed fact issues in this matter. Plaintiff requests such hearing be
scheduled with sufficient time to allow Plaintiff to conduct written and deposition discovery of
witnesses relevant to these issues, including but not limited to all electronic versions of
documents at issue in this case, and all individuals identified as authors of any and all
documents Defendant seeks to admit into evidence in this case, together with sufficient time in
that discovery period for the forensic analysis of all documents, necessary computers, hard
drives, backup tapes, and metadata of/from such documents and items. Plaintiff further requests
this Court issue an Order allowing Plaintiff to conduct electronic discovery with regard to the
relevant documents to Defendant’s Application, permitting the necessary time frame for Plaintiff
to conduct forensic computer analysis prior to the evidentiary hearing in this case. Plaintiff
further demands a jury trial of this hearing, pursuant to 9 U.S.C. §4.
B. The Application to Compel Should Be Denied Because The Scope of the Arbitration Agreement Sought to be Enforced Does Not Encompass Plaintiff’s Claims in this Cause
The alleged agreement proffered by Defendant in this case is illegible, and its terms and
provisions cannot be read and analyzed. Plaintiff objects to Exhibit A to Defendant’s
Application, as such is not legible and thus cannot form the basis for the relief sought by
Defendant. In the event this Honorable Court finds that Defendant has proffered a valid and
legally enforceable arbitration agreement against Plaintiff in this case, by way of alternative
pleading and without waiving the foregoing, the arbitration agreement proffered by Defendant
in its Application does not encompass the claims at issue in this case. Indeed, to the extent any
valid and enforceable arbitration agreement has been proffered by Defendant, such agreement is
believed to be very narrow and limited in scope.
The mere existence of an arbitration agreement does not mandate that all claims and
causes of action between the parties be referred to arbitration. Indeed, “Courts distinguish
‘narrow’ arbitration clauses that only require arbitration of disputes ‘arising out of’ the contract
from broad arbitration clauses governing disputes that ‘relate to’ or ‘are connected with’ the
contract.” 41 “Even broad clauses have their limits.” 42 Plaintiff’s claims in this case pertain to a
failure by Defendant to disclose extensive and significant repairs made to the screener and
misrepresentations about the screener. The arbitration agreement proffered by Defendant is not
believed to be broad enough to encompass these claims.
C. The Application to Compel Should Properly Be Denied Because the Arbitration Agreement Sought to be Imposed Upon Plaintiff is Unconscionable
Under Texas law, unconscionability includes two aspects: (1) procedural
unconscionability, which refers to the circumstances surrounding the adoption of the
arbitration provision, and (2) substantive unconscionability, which refers to the fairness of the
arbitration provision itself. 43 Courts may consider both procedural and substantive
unconscionability of an arbitration clause in evaluating the validity of an arbitration provision. 44
Substantive unconscionability is intended to reach oppression and unfair surprise, not adjust
the bargaining power between the parties. 45
The arbitration agreement Defendant seeks to impose upon Plaintiff is substantively and
procedurally unconscionable because it is illegible, has not been shown to be binding upon or
41 Pennzoil Exploration and Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1067 (5th Cir. 1998). 42 Pennzoil at 1067 n. 8. 43 Carter v. Countrywide Credit Industries, Inc., 362 F.3d 294, 301 (5th Cir. 2004) (citing In re Halliburton Co., 80 S.W.3d 566, 571 (Tex. 2002). 44 In re Halliburton Co., 80 S.W.3d 566, 572 (Tex. 2002). 45 In re FirstMerit Bank, N.A., 52 S.W.3d 749, 757 (Tex. 2001) (quoting Tex. Bus. & Com. Code §2.302 cmt.1).
agreed upon by Plaintiff, and deprives Plaintiff of substantive and statutory rights and
remedies. 46
Additionally, if this case is stayed and referred to arbitration as sought by Defendant,
Plaintiff will most likely be required to incur and pay unreasonable and exorbitant initial filing
fees, case service fees, fees to the arbitrator(s) in this case, and other costs associated therewith.
Such costs would deny Plaintiff a forum in which to have this case heard, as such costs and
expenses would be prohibitive to Plaintiff. Defendant would thereby deny justice to Plaintiff by
forcing Plaintiff into arbitration.
Further, Plaintiff is unfairly surprised by Defendant’s attempt to refer this case to
arbitration, as Plaintiff has no knowledge or recollection of seeing, signing, or agreeing to the
arbitration agreement. The arbitration agreement Defendant seeks to impose upon Plaintiff is
unconscionable, and Defendant’s Application must therefore be denied.
7. CONCLUSION
Defendant has failed to proffer any enforceable arbitration agreement between it and
Plaintiff which governs the claims and issues in this case. Further, Exhibit A to Defendant’s
Application is illegible and cannot be imposed upon Plaintiff. Plaintiff disputes the facts and
assertions in Defendant’s Application, denies that it executed or assented to any alleged
arbitration agreement Defendant seeks to impose upon Plaintiff in this case (and requests and
evidentiary hearing in this regard), and denies that the claims and issues in this case are
governed by any alleged arbitration agreement. Any such agreement would be unconscionable
and void under Texas law. In the event the Court finds an enforceable arbitration agreement
exists between Plaintiff and Defendant, Plaintiff demands a jury trial of all disputed fact issues
and the arbitrability of this case pursuant to 9 U.S.C. §4.
46 See Defendant Metso Minerals, Inc.’s Original Answer.
WHEREFORE, PREMISES CONSIDERED, Plaintiff prays that this Honorable Court
deny Defendant’s Application to Compel Arbitration. Alternatively, Plaintiff prays that this
Honorable Court grant Plaintiff an evidentiary hearing and jury trial of all disputed facts in the
Application, and allow Plaintiff time to conduct written and deposition discovery as pled for
herein, and that this Court grant Plaintiff the right to conduct e-discovery upon Defendant,
securing computer forensic discovery as pled for herein. Plaintiff prays for all relief to which it
may show itself justly entitled, whether at law or in equity.
Respectfully submitted,
_/s/ Daniel R. Dutko____________ DANIEL R. DUTKO State Bar No. 24054206 HANSZEN LAPORTE 11767 Katy Freeway, Suite 850 Houston, Texas 77079 Telephone: (713) 522-9444 Facsimile: (713) 524-2850
ATTORNEY FOR PLAINTIFFS
CERTIFICATE OF SERVICE
I hereby certify that on June 3, 2015, a true and correct copy of the Plaintiff’s Response and Objections to Application to Compel Arbitration of Metso Minerals Industries, Inc. has been served to all counsel of record as indicated: Mr. Heriberto Morales, Jr. VIA FACSIMILE (830) 757-4045 Langley & Banack, Inc. and/or E-service: Efile Texas 401 Quarry Street Eagle Pass, Texas 78852
Mr. Eric Matzke VIA FACSIMILE (414) 978-8906 Quarles & Brady and/or E-service: Efile Texas 411 East Wisconsin Avenue, Suite 2350 Milwaukee, Wisconsin 53202
Mr. Oscar A. Garza VIA FACSIMILE (210) 299-7711 The Law Firm of Oscar A. Garza, LLC and/or E-service: Efile Texas 111 Soledad Street, Suite 300 San Antonio, Texas 78205
Mr. Michael A. Simpson VIA FACSIMILE (940) 683-3122 Mr. G. Alan Powers and/or E-service: Efile Texas Simpson, Boyd & Powers P.O. Box 685 1119 Halsell Street Bridgeport, Texas 76426
_/s/ Daniel R. Dutko__________ Daniel R. Dutko
Tab 12 ICC Rules
ARBITRATION RULES MEDIATION RULES
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FOREWORD
ARBITRATION RULES MEDIATION RULES This booklet contains two discrete but complementary dispute resolution procedures offered by the International Chamber of Commerce (ICC). Arbitration under the ICC Arbitration Rules is a formal procedure leading to a binding decision from a neutral arbitral tribunal, susceptible to enforcement pursuant to both domestic arbitration laws and international treaties such as the 1958 New York Convention. Mediation under the ICC Mediation Rules is a flexible procedure aimed at achieving a negotiated settlement with the help of a neutral facilitator. The two sets of Rules are published together in this booklet in answer to the growing demand for a holistic approach to dispute resolution techniques. Each set of Rules defines a structured, institutional framework intended to ensure transparency, efficiency and fairness in the dispute resolution process while allowing parties to exercise their choice over many aspects of procedure. Arbitration is administered by the International Court of Arbitration and mediation by the International Centre for ADR. These are the only bodies empowered to administer proceedings under their respective Rules, thereby affording parties the benefit of the experience, expertise and professionalism of a leading international dispute resolution provider. Drafted by dispute resolution specialists and users representing a wide range of legal traditions, cultures and professions, these Rules provide a modern framework for the conduct of procedures and respond to the needs of international trade today. At the same time, they remain faithful to the ethos and essential features of ICC dispute resolution and, in particular, its suitability for use in any part of the world in proceedings conducted in any language and subject to any law.
FOREWORD
The Arbitration Rules are those of 2012 when new provisions were added to address such matters as disputes involving multiple contracts and parties; updated case management procedures; the appointment of an emergency arbitrator to order urgent measures; and changes to facilitate the handling of disputes arising under investment treaties and free trade agreements. References to the ICC ADR Rules in Appendices III and IV of the Arbitration Rules have been replaced with references to the Mediation Rules. The Mediation Rules, in force from 2014, reflect modern practice and set clear parameters for the conduct of proceedings, while recognizing and maintaining the need for flexibility. Like the ADR Rules, which they replace, they can be used for conducting other procedures or combinations of procedures that are similarly aimed at an amicable settlement of the dispute, such as conciliation or neutral evaluation. Parties wishing to have recourse to ICC arbitration, mediation, or both, are encouraged to include an appropriate dispute resolution clause in their agreements. For this purpose, each set of Rules is followed by model clauses, together with guidance on their use and how they may be adjusted to particular needs and circumstances. The recommended clauses include multi-tiered clauses providing for a combination of techniques as well as clauses contemplating a single technique. Both the Rules and the model clauses are available for use by parties, whether or not members of the ICC. For the convenience of users, they have been translated into several languages and can be downloaded from the ICC website.
02 ICC Publication 865-1 ENG
Table of contents
Arbitration rules 07 Introductory Provisions 08 Article 1 International Court of Arbitration 08 Article 2 Definitions 09 Article 3 Written Notifications or Communications;
Time Limits 09
Commencing the Arbitration 11 Article 4 Request for Arbitration 11 Article 5 Answer to the Request; Counterclaims 12 Article 6 Effect of the Arbitration Agreement 14
Multiple Parties, Multiple Contracts and Consolidation 17 Article 7 Joinder of Additional Parties 17 Article 8 Claims Between Multiple Parties 18 Article 9 Multiple Contracts 18 Article 10 Consolidation of Arbitrations 19
The Arbitral Tribunal 20 Article 11 General Provisions 20 Article 12 Constitution of the Arbitral Tribunal 21 Article 13 Appointment and Confirmation of the Arbitrators 23 Article 14 Challenge of Arbitrators 24 Article 15 Replacement of Arbitrators 25
The Arbitral Proceedings 26 Article 16 Transmission of the File to the Arbitral Tribunal 26 Article 17 Proof of Authority 26 Article 18 Place of the Arbitration 26 Article 19 Rules Governing the Proceedings 26 Article 20 Language of the Arbitration 27 Article 21 Applicable Rules of Law 27 Article 22 Conduct of the Arbitration 27 Article 23 Terms of Reference 28 Article 24 Case Management Conference and Procedural Timetable 29 Article 25 Establishing the Facts of the Case 30 Article 26 Hearings 31 Article 27 Closing of the Proceedings and Date for Submission of Draft Awards 32 Article 28 Conservatory and Interim Measures 32 Article 29 Emergency Arbitrator 33
Table of contents
Awards 35 Article 30 Time Limit for the Final Award 35 Article 31 Making of the Award 35 Article 32 Award by Consent 35 Article 33 Scrutiny of the Award by the Court 36 Article 34 Notification, Deposit and Enforceability of the Award 36 Article 35 Correction and Interpretation of the Award; Remission of Awards 37
Costs 38 Article 36 Advance to Cover the Costs of the Arbitration 38 Article 37 Decision as to the Costs of the Arbitration 39
Miscellaneous 41 Article 38 Modified Time Limits 41 Article 39 Waiver 41 Article 40 Limitation of Liability 41 Article 41 General Rule 41
Appendix I – Statutes of the International Court of Arbitration 42 Article 1 Function 42 Article 2 Composition of the Court 42 Article 3 Appointment 42 Article 4 Plenary Session of the Court 43 Article 5 Committees 43 Article 6 Confidentiality 44 Article 7 Modification of the Rules of Arbitration 44
Appendix II – Internal Rules of the International Court of Arbitration 45 Article 1 Confidential Character of the Work of the International Court of Arbitration 45 Article 2 Participation of Members of the International Court of Arbitration in ICC Arbitration 46 Article 3 Relations Between the Members of the Court and the ICC National Committees and Groups 47 Article 4 Committee of the Court 47 Article 5 Court Secretariat 48 Article 6 Scrutiny of Arbitral Awards 48
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Appendix III – Arbitration Costs and Fees 49 Article 1 Advance on Costs 49 Article 2 Costs and Fees 51 Article 3 ICC as Appointing Authority 53 Article 4 Scales of Administrative Expenses and Arbitrator’s Fees 53
Appendix IV – Case Management Techniques 57
Appendix V – Emergency Arbitrator Rules 59 Article 1 Application for Emergency Measures 59 Article 2 Appointment of the Emergency Arbitrator; Transmission of the File 61 Article 3 Challenge of an Emergency Arbitrator 62 Article 4 Place of the Emergency Arbitrator Proceedings 62 Article 5 Proceedings 63 Article 6 Order 63 Article 7 Costs of the Emergency Arbitrator Proceedings 64 Article 8 General Rule 65
ARBITRATION CLAUSES 67
Table of contents
MEDIATION RULES 71 Article 1 Introductory Provisions 72 Article 2 Commencement Where there is an Agreement to Refer to the Rules 73 Article 3 Commencement Where there is No Prior Agreement to Refer to the Rules 74 Article 4 Place and Language(s) of the Mediation 75 Article 5 Selection of the Mediator 75 Article 6 Fees and Costs 77 Article 7 Conduct of the Mediation 78 Article 8 Termination of the Proceedings 78 Article 9 Confidentiality 79 Article 10 General Provisions 80
Appendix – Fees and Costs 82 Article 1 Filing Fee 82 Article 2 Administrative Expenses 82 Article 3 Mediator’s Fees and Expenses 83 Article 4 Prior ICC Arbitration 84 Article 5 Currency, VAT and Scope 84 Article 6 ICC as Appointing Authority 85
MEDIATION CLAUSES 87
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ARBITRATION RULES Rules of Arbitration of the International Chamber of Commerce In force as from 1 January 2012
ICC Arbitration Rules Introductory Provisions
Article 1
International Court of Arbitration 1 The International Court of Arbitration (the “Court”)
of the International Chamber of Commerce (the “ICC”) is the independent arbitration body of the ICC. The statutes of the Court are set forth in Appendix I. 2 The Court does not itself resolve disputes. It administers the resolution of disputes by arbitral tribunals, in accordance with the Rules of Arbitration of the ICC (the “Rules”). The Court is the only body authorized to administer arbitrations under the Rules, including the scrutiny and approval of awards rendered in accordance with the Rules. It draws up its own internal rules, which are set forth in Appendix II (the “Internal Rules”). 3 The President of the Court (the “President”) or, in the President’s absence or otherwise at the President’s request, one of its Vice-Presidents shall have the power to take urgent decisions on behalf of the Court, provided that any such decision is reported to the Court at its next session. 4 As provided for in the Internal Rules, the Court may delegate to one or more committees composed of its members the power to take certain decisions, provided that any such decision is reported to the Court at its next session. 5 The Court is assisted in its work by the Secretariat of the Court (the “Secretariat”) under the direction of its Secretary General (the “Secretary General”).
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Arbitration Article 2
Definitions In the Rules: (i) “arbitral tribunal” includes one or more arbitrators; (ii) “claimant” includes one or more claimants, “respondent” includes one or more respondents, and “additional party” includes one or more additional parties;
(iii) “party” or “parties” include claimants, respondents or additional parties;
(iv) “claim” or “claims” include any claim by any party against any other party;
(v) “award” includes, inter alia, an interim, partial or final award.
Article 3
Written Notifications or Communications; Time Limits 1 All pleadings and other written communications submitted by any party, as well as all documents annexed thereto, shall be supplied in a number of copies sufficient to provide one copy for each party, plus one for each arbitrator, and one for the Secretariat. A copy of any notification or communication from the arbitral tribunal to the parties shall be sent to the Secretariat. 2 All notifications or communications from the Secretariat and the arbitral tribunal shall be made to the last address of the party or its representative for whom the same are intended, as notified either by the party in question or by the other party. Such notification or communication may be made by delivery against receipt, registered post, courier, email, or any other means of telecommunication that provides a record of the sending thereof.
ICC Arbitration Rules Introductory Provisions
3 A notification or communication shall be deemed to have been made on the day it was received by the party itself or by its representative, or would have been received if made in accordance with Article 3(2). 4 Periods of time specified in or fixed under the Rules shall start to run on the day following the date a notification or communication is deemed to have been made in accordance with Article 3(3). When the day next following such date is an official holiday, or a non-business day in the country where the notification or communication is deemed to have been made, the period of time shall commence on the first following business day. Official holidays and non-business days are included in the calculation of the period of time. If the last day of the relevant period of time granted is an official holiday or a non- business day in the country where the notification or communication is deemed to have been made, the period of time shall expire at the end of the first following business day.
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ICC Arbitration Rules
Arbitration COMMENCING THE ARBITRATION
Article 4
Request for Arbitration 1 A party wishing to have recourse to arbitration under the Rules shall submit its Request for Arbitration (the “Request”) to the Secretariat at any of the offices specified in the Internal Rules. The Secretariat shall notify the claimant and respondent of the receipt of the Request and the date of such receipt. 2 The date on which the Request is received by the Secretariat shall, for all purposes, be deemed to be the date of the commencement of the arbitration. 3 The Request shall contain the following information:
a) the name in full, description, address and other contact details of each of the parties;
b) the name in full, address and other contact details of any person(s) representing the claimant in the arbitration;
c) a description of the nature and circumstances of the dispute giving rise to the claims and of the basis upon which the claims are made;
d) a statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;
e) any relevant agreements and, in particular, the arbitration agreement(s);
f) where claims are made under more than one arbitration agreement, an indication of the arbitration agreement under which each claim is made; g) all relevant particulars and any observations or proposals concerning the number of arbitrators and their choice in accordance with the provisions of Articles 12 and 13, and any nomination of an arbitrator required thereby; and h) all relevant particulars and any observations or proposals as to the place of the arbitration, the applicable rules of law and the language of the arbitration.
ICC Arbitration Rules COMMENCING THE ARBITRATION
The claimant may submit such other documents or information with the Request as it considers appropriate or as may contribute to the efficient resolution of the dispute. 4 Together with the Request, the claimant shall:
a) submit the number of copies thereof required by Article 3(1); and b) make payment of the filing fee required by Appendix III (“Arbitration Costs and Fees”) in force on the date the Request is submitted.
In the event that the claimant fails to comply with either of these requirements, the Secretariat may fix a time limit within which the claimant must comply, failing which the file shall be closed without prejudice to the claimant’s right to submit the same claims at a later date in another Request. 5 The Secretariat shall transmit a copy of the Request and the documents annexed thereto to the respondent for its Answer to the Request once the Secretariat has sufficient copies of the Request and the required filing fee.
Article 5
Answer to the Request; Counterclaims 1 Within 30 days from the receipt of the Request from the Secretariat, the respondent shall submit an Answer (the “Answer”) which shall contain the following information:
a) its name in full, description, address and other contact details;
b) the name in full, address and other contact details of any person(s) representing the respondent in the arbitration;
c) its comments as to the nature and circumstances of the dispute giving rise to the claims and the basis upon which the claims are made;
d) its response to the relief sought;
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Arbitration e) any observations or proposals concerning the number of arbitrators and their choice in light of the claimant’s proposals and in accordance with the provisions of Articles 12 and 13, and any nomination of an arbitrator required thereby; and f) any observations or proposals as to the place of the arbitration, the applicable rules of law and the language of the arbitration.
The respondent may submit such other documents or information with the Answer as it considers appropriate or as may contribute to the efficient resolution of the dispute. 2 The Secretariat may grant the respondent an extension of the time for submitting the Answer, provided the application for such an extension contains the respondent’s observations or proposals concerning the number of arbitrators and their choice and, where required by Articles 12 and 13, the nomination of an arbitrator. If the respondent fails to do so, the Court shall proceed in accordance with the Rules. 3 The Answer shall be submitted to the Secretariat in the number of copies specified by Article 3(1). 4 The Secretariat shall communicate the Answer and the documents annexed thereto to all other parties. 5 Any counterclaims made by the respondent shall be submitted with the Answer and shall provide: a) a description of the nature and circumstances of the dispute giving rise to the counterclaims and of the basis upon which the counterclaims are made;
b) a statement of the relief sought together with the amounts of any quantified counterclaims and, to the extent possible, an estimate of the monetary value of any other counterclaims;
c) any relevant agreements and, in particular, the arbitration agreement(s); and d) where counterclaims are made under more than one arbitration agreement, an indication of the arbitration agreement under which each counterclaim is made.
ICC Arbitration Rules COMMENCING THE ARBITRATION
The respondent may submit such other documents or information with the counterclaims as it considers appropriate or as may contribute to the efficient resolution of the dispute. 6 The claimant shall submit a reply to any counterclaim within 30 days from the date of receipt of the counterclaims communicated by the Secretariat. Prior to the transmission of the file to the arbitral tribunal, the Secretariat may grant the claimant an extension of time for submitting the reply.
Article 6
Effect of the Arbitration Agreement 1 Where the parties have agreed to submit to arbitration under the Rules, they shall be deemed to have submitted ipso facto to the Rules in effect on the date of commencement of the arbitration, unless they have agreed to submit to the Rules in effect on the date of their arbitration agreement. 2 By agreeing to arbitration under the Rules, the parties have accepted that the arbitration shall be administered by the Court. 3 If any party against which a claim has been made does not submit an Answer, or raises one or more pleas concerning the existence, validity or scope of the arbitration agreement or concerning whether all of the claims made in the arbitration may be determined together in a single arbitration, the arbitration shall proceed and any question of jurisdiction or of whether the claims may be determined together in that arbitration shall be decided directly by the arbitral tribunal, unless the Secretary General refers the matter to the Court for its decision pursuant to Article 6(4).
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Arbitration 4 In all cases referred to the Court under Article 6(3), the Court shall decide whether and to what extent the arbitration shall proceed. The arbitration shall proceed if and to the extent that the Court is prima facie satisfied that an arbitration agreement under the Rules may exist. In particular: (i) where there are more than two parties to the arbitration, the arbitration shall proceed between those of the parties, including any additional parties joined pursuant to Article 7, with respect to which the Court is prima facie satisfied that an arbitration agreement under the Rules that binds them all may exist; and (ii) where claims pursuant to Article 9 are made under more than one arbitration agreement, the arbitration shall proceed as to those claims with respect to which the Court is prima facie satisfied (a) that the arbitration agreements under which those claims are made may be compatible, and (b) that all parties to the arbitration may have agreed that those claims can be determined together in a single arbitration.
The Court’s decision pursuant to Article 6(4) is without prejudice to the admissibility or merits of any party’s plea or pleas. 5 In all matters decided by the Court under Article 6(4), any decision as to the jurisdiction of the arbitral tribunal, except as to parties or claims with respect to which the Court decides that the arbitration cannot proceed, shall then be taken by the arbitral tribunal itself. 6 Where the parties are notified of the Court’s decision pursuant to Article 6(4) that the arbitration cannot proceed in respect of some or all of them, any party retains the right to ask any court having jurisdiction whether or not, and in respect of which of them, there is a binding arbitration agreement.
ICC Arbitration Rules COMMENCING THE ARBITRATION
7 Where the Court has decided pursuant to Article 6(4) that the arbitration cannot proceed in respect of any of the claims, such decision shall not prevent a party from reintroducing the same claim at a later date in other proceedings. 8 If any of the parties refuses or fails to take part in the arbitration or any stage thereof, the arbitration shall proceed notwithstanding such refusal or failure. 9 Unless otherwise agreed, the arbitral tribunal shall not cease to have jurisdiction by reason of any allegation that the contract is non-existent or null and void, provided that the arbitral tribunal upholds the validity of the arbitration agreement. The arbitral tribunal shall continue to have jurisdiction to determine the parties’ respective rights and to decide their claims and pleas even though the contract itself may be non-existent or null and void.
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ICC Arbitration Rules
Arbitration MULTIPLE PARTIES, MULTIPLE CONTRACTS AND CONSOLIDATION
Article 7
Joinder of Additional Parties 1 A party wishing to join an additional party to the arbitration shall submit its request for arbitration against the additional party (the “Request for Joinder”) to the Secretariat. The date on which the Request for Joinder is received by the Secretariat shall, for all purposes, be deemed to be the date of the commencement of arbitration against the additional party. Any such joinder shall be subject to the provisions of Articles 6(3)–6(7) and 9. No additional party may be joined after the confirmation or appointment of any arbitrator, unless all parties, including the additional party, otherwise agree. The Secretariat may fix a time limit for the submission of a Request for Joinder. 2 The Request for Joinder shall contain the following information: a) the case reference of the existing arbitration; b) the name in full, description, address and other contact details of each of the parties, including the additional party; and c) the information specified in Article 4(3), subparagraphs c), d), e) and f).
The party filing the Request for Joinder may submit therewith such other documents or information as it considers appropriate or as may contribute to the efficient resolution of the dispute. 3 The provisions of Articles 4(4) and 4(5) shall apply, mutatis mutandis, to the Request for Joinder. 4 The additional party shall submit an Answer in accordance, mutatis mutandis, with the provisions of Articles 5(1)–5(4). The additional party may make claims against any other party in accordance with the provisions of Article 8.
ICC Arbitration Rules MULTIPLE PARTIES, MULTIPLE CONTRACTS AND CONSOLIDATION
Article 8
Claims Between Multiple Parties 1 In an arbitration with multiple parties, claims may be made by any party against any other party, subject to the provisions of Articles 6(3)–6(7) and 9 and provided that no new claims may be made after the Terms of Reference are signed or approved by the Court without the authorization of the arbitral tribunal pursuant to Article 23(4). 2 Any party making a claim pursuant to Article 8(1)
shall provide the information specified in Article 4(3), subparagraphs c), d), e) and f). 3 Before the Secretariat transmits the file to the arbitral tribunal in accordance with Article 16, the following provisions shall apply, mutatis mutandis, to any claim made: Article 4(4) subparagraph a); Article 4(5); Article 5(1) except for subparagraphs a), b), e) and f); Article 5(2); Article 5(3) and Article 5(4). Thereafter, the arbitral tribunal shall determine the procedure for making a claim.
Article 9
Multiple Contracts Subject to the provisions of Articles 6(3)–6(7) and 23(4), claims arising out of or in connection with more than one contract may be made in a single arbitration, irrespective of whether such claims are made under one or more than one arbitration agreement under the Rules.
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Arbitration Article 10
Consolidation of Arbitrations The Court may, at the request of a party, consolidate two or more arbitrations pending under the Rules into a single arbitration, where: a) the parties have agreed to consolidation; or b) all of the claims in the arbitrations are made under the same arbitration agreement; or c) where the claims in the arbitrations are made under more than one arbitration agreement, the arbitrations are between the same parties, the disputes in the arbitrations arise in connection with the same legal relationship, and the Court finds the arbitration agreements to be compatible.
In deciding whether to consolidate, the Court may take into account any circumstances it considers to be relevant, including whether one or more arbitrators have been confirmed or appointed in more than one of the arbitrations and, if so, whether the same or different persons have been confirmed or appointed. When arbitrations are consolidated, they shall be consolidated into the arbitration that commenced first, unless otherwise agreed by all parties.
ICC Arbitration Rules THE ARBITRAL TRIBUNAL
Article 11
General Provisions 1 Every arbitrator must be and remain impartial and independent of the parties involved in the arbitration. 2 Before appointment or confirmation, a prospective arbitrator shall sign a statement of acceptance, availability, impartiality and independence. The prospective arbitrator shall disclose in writing to the Secretariat any facts or circumstances which might be of such a nature as to call into question the arbitrator’s independence in the eyes of the parties, as well as any circumstances that could give rise to reasonable doubts as to the arbitrator’s impartiality. The Secretariat shall provide such information to the parties in writing and fix a time limit for any comments from them. 3 An arbitrator shall immediately disclose in writing to the Secretariat and to the parties any facts or circumstances of a similar nature to those referred to in Article 11(2) concerning the arbitrator’s impartiality or independence which may arise during the arbitration. 4 The decisions of the Court as to the appointment, confirmation, challenge or replacement of an arbitrator shall be final, and the reasons for such decisions shall not be communicated. 5 By accepting to serve, arbitrators undertake to carry out their responsibilities in accordance with the Rules. 6 Insofar as the parties have not provided otherwise, the arbitral tribunal shall be constituted in accordance with the provisions of Articles 12 and 13.
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Arbitration Article 12
Constitution of the Arbitral Tribunal Number of Arbitrators 1 The disputes shall be decided by a sole arbitrator or by three arbitrators. 2 Where the parties have not agreed upon the number of arbitrators, the Court shall appoint a sole arbitrator, save where it appears to the Court that the dispute is such as to warrant the appointment of three arbitrators. In such case, the claimant shall nominate an arbitrator within a period of 15 days from the receipt of the notification of the decision of the Court, and the respondent shall nominate an arbitrator within a period of 15 days from the receipt of the notification of the nomination made by the claimant. If a party fails to nominate an arbitrator, the appointment shall be made by the Court. Sole Arbitrator 3 Where the parties have agreed that the dispute shall be resolved by a sole arbitrator, they may, by agreement, nominate the sole arbitrator for confirmation. If the parties fail to nominate a sole arbitrator within 30 days from the date when the claimant’s Request for Arbitration has been received by the other party, or within such additional time as may be allowed by the Secretariat, the sole arbitrator shall be appointed by the Court. Three Arbitrators 4 Where the parties have agreed that the dispute shall be resolved by three arbitrators, each party shall nominate in the Request and the Answer, respectively, one arbitrator for confirmation. If a party fails to nominate an arbitrator, the appointment shall be made by the Court.
ICC Arbitration Rules THE ARBITRAL TRIBUNAL
5 Where the dispute is to be referred to three arbitrators, the third arbitrator, who will act as president of the arbitral tribunal, shall be appointed by the Court, unless the parties have agreed upon another procedure for such appointment, in which case the nomination will be subject to confirmation pursuant to Article 13. Should such procedure not result in a nomination within 30 days from the confirmation or appointment of the co‑arbitrators or any other time limit agreed by the parties or fixed by the Court, the third arbitrator shall be appointed by the Court. 6 Where there are multiple claimants or multiple respondents, and where the dispute is to be referred to three arbitrators, the multiple claimants, jointly, and the multiple respondents, jointly, shall nominate an arbitrator for confirmation pursuant to Article 13. 7 Where an additional party has been joined, and where the dispute is to be referred to three arbitrators, the additional party may, jointly with the claimant(s) or with the respondent(s), nominate an arbitrator for confirmation pursuant to Article 13. 8 In the absence of a joint nomination pursuant to Articles 12(6) or 12(7) and where all parties are unable to agree to a method for the constitution of the arbitral tribunal, the Court may appoint each member of the arbitral tribunal and shall designate one of them to act as president. In such case, the Court shall be at liberty to choose any person it regards as suitable to act as arbitrator, applying Article 13 when it considers this appropriate.
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Arbitration Article 13
Appointment and Confirmation of the Arbitrators 1 In confirming or appointing arbitrators, the Court shall consider the prospective arbitrator’s nationality, residence and other relationships with the countries of which the parties or the other arbitrators are nationals and the prospective arbitrator’s availability and ability to conduct the arbitration in accordance with the Rules. The same shall apply where the Secretary General confirms arbitrators pursuant to Article 13(2). 2 The Secretary General may confirm as co‑arbitrators, sole arbitrators and presidents of arbitral tribunals persons nominated by the parties or pursuant to their particular agreements, provided that the statement they have submitted contains no qualification regarding impartiality or independence or that a qualified statement regarding impartiality or independence has not given rise to objections. Such confirmation shall be reported to the Court at its next session. If the Secretary General considers that a co-arbitrator, sole arbitrator or president of an arbitral tribunal should not be confirmed, the matter shall be submitted to the Court. 3 Where the Court is to appoint an arbitrator, it shall make the appointment upon proposal of a National Committee or Group of the ICC that it considers to be appropriate. If the Court does not accept the proposal made, or if the National Committee or Group fails to make the proposal requested within the time limit fixed by the Court, the Court may repeat its request, request a proposal from another National Committee or Group that it considers to be appropriate, or appoint directly any person whom it regards as suitable. 4 The Court may also appoint directly to act as arbitrator any person whom it regards as suitable where:
a) one or more of the parties is a state or claims to be a state entity; or
ICC Arbitration Rules THE ARBITRAL TRIBUNAL
b) the Court considers that it would be appropriate to appoint an arbitrator from a country or territory where there is no National Committee or Group; or c) the President certifies to the Court that circumstances exist which, in the President’s opinion, make a direct appointment necessary and appropriate.
5 The sole arbitrator or the president of the arbitral tribunal shall be of a nationality other than those of the parties. However, in suitable circumstances and provided that none of the parties objects within the time limit fixed by the Court, the sole arbitrator or the president of the arbitral tribunal may be chosen from a country of which any of the parties is a national.
Article 14
Challenge of Arbitrators 1 A challenge of an arbitrator, whether for an alleged lack of impartiality or independence, or otherwise, shall be made by the submission to the Secretariat of a written statement specifying the facts and circumstances on which the challenge is based. 2 For a challenge to be admissible, it must be submitted by a party either within 30 days from receipt by that party of the notification of the appointment or confirmation of the arbitrator, or within 30 days from the date when the party making the challenge was informed of the facts and circumstances on which the challenge is based if such date is subsequent to the receipt of such notification. 3 The Court shall decide on the admissibility and, at the same time, if necessary, on the merits of a challenge after the Secretariat has afforded an opportunity for the arbitrator concerned, the other party or parties and any other members of the arbitral tribunal to comment in writing within a suitable period of time. Such comments shall be communicated to the parties and to the arbitrators.
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Arbitration Article 15
Replacement of Arbitrators 1 An arbitrator shall be replaced upon death, upon acceptance by the Court of the arbitrator’s resignation, upon acceptance by the Court of a challenge, or upon acceptance by the Court of a request of all the parties. 2 An arbitrator shall also be replaced on the Court’s own initiative when it decides that the arbitrator is prevented de jure or de facto from fulfilling the arbitrator’s functions, or that the arbitrator is not fulfilling those functions in accordance with the Rules or within the prescribed time limits. 3 When, on the basis of information that has come to its attention, the Court considers applying Article 15(2), it shall decide on the matter after the arbitrator concerned, the parties and any other members of the arbitral tribunal have had an opportunity to comment in writing within a suitable period of time. Such comments shall be communicated to the parties and to the arbitrators. 4 When an arbitrator is to be replaced, the Court has discretion to decide whether or not to follow the original nominating process. Once reconstituted, and after having invited the parties to comment, the arbitral tribunal shall determine if and to what extent prior proceedings shall be repeated before the reconstituted arbitral tribunal. 5 Subsequent to the closing of the proceedings, instead of replacing an arbitrator who has died or been removed by the Court pursuant to Articles 15(1) or 15(2), the Court may decide, when it considers it appropriate, that the remaining arbitrators shall continue the arbitration. In making such determination, the Court shall take into account the views of the remaining arbitrators and of the parties and such other matters that it considers appropriate in the circumstances.
ICC Arbitration Rules THE ARBITRAL PROCEEDINGS
Article 16
Transmission of the File to the Arbitral Tribunal The Secretariat shall transmit the file to the arbitral tribunal as soon as it has been constituted, provided the advance on costs requested by the Secretariat at this stage has been paid.
Article 17
Proof of Authority At any time after the commencement of the arbitration, the arbitral tribunal or the Secretariat may require proof of the authority of any party representatives.
Article 18
Place of the Arbitration 1 The place of the arbitration shall be fixed by the Court, unless agreed upon by the parties. 2 The arbitral tribunal may, after consultation with the parties, conduct hearings and meetings at any location it considers appropriate, unless otherwise agreed by the parties. 3 The arbitral tribunal may deliberate at any location it considers appropriate.
Article 19
Rules Governing the Proceedings The proceedings before the arbitral tribunal shall be governed by the Rules and, where the Rules are silent, by any rules which the parties or, failing them, the arbitral tribunal may settle on, whether or not reference is thereby made to the rules of procedure of a national law to be applied to the arbitration.
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Arbitration Article 20
Language of the Arbitration In the absence of an agreement by the parties, the arbitral tribunal shall determine the language or languages of the arbitration, due regard being given to all relevant circumstances, including the language of the contract.
Article 21
Applicable Rules of Law 1 The parties shall be free to agree upon the rules of law to be applied by the arbitral tribunal to the merits of the dispute. In the absence of any such agreement, the arbitral tribunal shall apply the rules of law which it determines to be appropriate. 2 The arbitral tribunal shall take account of the provisions of the contract, if any, between the parties and of any relevant trade usages. 3 The arbitral tribunal shall assume the powers of an amiable compositeur or decide ex aequo et bono only if the parties have agreed to give it such powers.
Article 22
Conduct of the Arbitration 1 The arbitral tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute. 2 In order to ensure effective case management, the arbitral tribunal, after consulting the parties, may adopt such procedural measures as it considers appropriate, provided that they are not contrary to any agreement of the parties.
ICC Arbitration Rules THE ARBITRAL PROCEEDINGS
3 Upon the request of any party, the arbitral tribunal may make orders concerning the confidentiality of the arbitration proceedings or of any other matters in connection with the arbitration and may take measures for protecting trade secrets and confidential information. 4 In all cases, the arbitral tribunal shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case. 5 The parties undertake to comply with any order made by the arbitral tribunal.
Article 23
Terms of Reference 1 As soon as it has received the file from the Secretariat, the arbitral tribunal shall draw up, on the basis of documents or in the presence of the parties and in the light of their most recent submissions, a document defining its Terms of Reference. This document shall include the following particulars:
a) the names in full, description, address and other contact details of each of the parties and of any person(s) representing a party in the arbitration;
b) the addresses to which notifications and communications arising in the course of the arbitration may be made; c) a summary of the parties’ respective claims and of the relief sought by each party, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;
d) unless the arbitral tribunal considers it inappropriate, a list of issues to be determined; e) the names in full, address and other contact details of each of the arbitrators; f) the place of the arbitration; and
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Arbitration g) particulars of the applicable procedural rules and, if such is the case, reference to the power conferred upon the arbitral tribunal to act as amiable compositeur or to decide ex aequo et bono.
2 The Terms of Reference shall be signed by the parties and the arbitral tribunal. Within two months of the date on which the file has been transmitted to it, the arbitral tribunal shall transmit to the Court the Terms of Reference signed by it and by the parties. The Court may extend this time limit pursuant to a reasoned request from the arbitral tribunal or on its own initiative if it decides it is necessary to do so. 3 If any of the parties refuses to take part in the drawing up of the Terms of Reference or to sign the same, they shall be submitted to the Court for approval. When the Terms of Reference have been signed in accordance with Article 23(2) or approved by the Court, the arbitration shall proceed. 4 After the Terms of Reference have been signed or approved by the Court, no party shall make new claims which fall outside the limits of the Terms of Reference unless it has been authorized to do so by the arbitral tribunal, which shall consider the nature of such new claims, the stage of the arbitration and other relevant circumstances.
Article 24
Case Management Conference and Procedural Timetable 1 When drawing up the Terms of Reference or as soon as possible thereafter, the arbitral tribunal shall convene a case management conference to consult the parties on procedural measures that may be adopted pursuant to Article 22(2). Such measures may include one or more of the case management techniques described in Appendix IV.
ICC Arbitration Rules THE ARBITRAL PROCEEDINGS
2 During or following such conference, the arbitral tribunal shall establish the procedural timetable that it intends to follow for the conduct of the arbitration. The procedural timetable and any modifications thereto shall be communicated to the Court and the parties. 3 To ensure continued effective case management, the arbitral tribunal, after consulting the parties by means of a further case management conference or otherwise, may adopt further procedural measures or modify the procedural timetable. 4 Case management conferences may be conducted through a meeting in person, by video conference, telephone or similar means of communication. In the absence of an agreement of the parties, the arbitral tribunal shall determine the means by which the conference will be conducted. The arbitral tribunal may request the parties to submit case management proposals in advance of a case management conference and may request the attendance at any case management conference of the parties in person or through an internal representative.
Article 25
Establishing the Facts of the Case 1 The arbitral tribunal shall proceed within as short a time as possible to establish the facts of the case by all appropriate means. 2 After studying the written submissions of the parties and all documents relied upon, the arbitral tribunal shall hear the parties together in person if any of them so requests or, failing such a request, it may of its own motion decide to hear them. 3 The arbitral tribunal may decide to hear witnesses, experts appointed by the parties or any other person, in the presence of the parties, or in their absence provided they have been duly summoned.
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Arbitration 4 The arbitral tribunal, after having consulted the parties, may appoint one or more experts, define their terms of reference and receive their reports. At the request of a party, the parties shall be given the opportunity to question at a hearing any such expert. 5 At any time during the proceedings, the arbitral tribunal may summon any party to provide additional evidence. 6 The arbitral tribunal may decide the case solely on the documents submitted by the parties unless any of the parties requests a hearing.
Article 26
Hearings 1 When a hearing is to be held, the arbitral tribunal, giving reasonable notice, shall summon the parties to appear before it on the day and at the place fixed by it. 2 If any of the parties, although duly summoned, fails to appear without valid excuse, the arbitral tribunal shall have the power to proceed with the hearing. 3 The arbitral tribunal shall be in full charge of the hearings, at which all the parties shall be entitled to be present. Save with the approval of the arbitral tribunal and the parties, persons not involved in the proceedings shall not be admitted. 4 The parties may appear in person or through duly authorized representatives. In addition, they may be assisted by advisers.
ICC Arbitration Rules THE ARBITRAL PROCEEDINGS
Article 27
Closing of the Proceedings and Date for Submission of Draft Awards As soon as possible after the last hearing concerning matters to be decided in an award or the filing of the last authorized submissions concerning such matters, whichever is later, the arbitral tribunal shall: a) declare the proceedings closed with respect to the matters to be decided in the award; and b) inform the Secretariat and the parties of the date by which it expects to submit its draft award to the Court for approval pursuant to Article 33.
After the proceedings are closed, no further submission or argument may be made, or evidence produced, with respect to the matters to be decided in the award, unless requested or authorized by the arbitral tribunal.
Article 28
Conservatory and Interim Measures 1 Unless the parties have otherwise agreed, as soon as the file has been transmitted to it, the arbitral tribunal may, at the request of a party, order any interim or conservatory measure it deems appropriate. The arbitral tribunal may make the granting of any such measure subject to appropriate security being furnished by the requesting party. Any such measure shall take the form of an order, giving reasons, or of an award, as the arbitral tribunal considers appropriate. 2 Before the file is transmitted to the arbitral tribunal, and in appropriate circumstances even thereafter, the parties may apply to any competent judicial authority for interim or conservatory measures. The application of a party to a judicial authority for such measures or for the implementation of any such measures ordered by an arbitral tribunal shall not be deemed to be an infringement or a waiver of the arbitration agreement and shall not affect the relevant powers reserved to the arbitral tribunal.
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Arbitration Any such application and any measures taken by the judicial authority must be notified without delay to the Secretariat. The Secretariat shall inform the arbitral tribunal thereof.
Article 29
Emergency Arbitrator 1 A party that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal (“Emergency Measures”) may make an application for such measures pursuant to the Emergency Arbitrator Rules in Appendix V. Any such application shall be accepted only if it is received by the Secretariat prior to the transmission of the file to the arbitral tribunal pursuant to Article 16 and irrespective of whether the party making the application has already submitted its Request for Arbitration. 2 The emergency arbitrator’s decision shall take the form of an order. The parties undertake to comply with any order made by the emergency arbitrator. 3 The emergency arbitrator’s order shall not bind the arbitral tribunal with respect to any question, issue or dispute determined in the order. The arbitral tribunal may modify, terminate or annul the order or any modification thereto made by the emergency arbitrator. 4 The arbitral tribunal shall decide upon any party’s requests or claims related to the emergency arbitrator proceedings, including the reallocation of the costs of such proceedings and any claims arising out of or in connection with the compliance or noncompliance with the order.
5 Articles 29(1)–29(4) and the Emergency Arbitrator Rules set forth in Appendix V (collectively the “Emergency Arbitrator Provisions”) shall apply only to parties that are either signatories of the arbitration agreement under the Rules that is relied upon for the application or successors to such signatories.
ICC Arbitration Rules THE ARBITRAL PROCEEDINGS
6 The Emergency Arbitrator Provisions shall not apply if:
a) the arbitration agreement under the Rules was concluded before the date on which the Rules came into force;
b) the parties have agreed to opt out of the Emergency Arbitrator Provisions; or c) the parties have agreed to another pre-arbitral procedure that provides for the granting of conservatory, interim or similar measures.
7 The Emergency Arbitrator Provisions are not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority at any time prior to making an application for such measures, and in appropriate circumstances even thereafter, pursuant to the Rules. Any application for such measures from a competent judicial authority shall not be deemed to be an infringement or a waiver of the arbitration agreement. Any such application and any measures taken by the judicial authority must be notified without delay to the Secretariat.
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ICC Arbitration Rules
Arbitration AWARDS
Article 30
Time Limit for the Final Award 1 The time limit within which the arbitral tribunal must render its final award is six months. Such time limit shall start to run from the date of the last signature by the arbitral tribunal or by the parties of the Terms of Reference or, in the case of application of Article 23(3), the date of the notification to the arbitral tribunal by the Secretariat of the approval of the Terms of Reference by the Court. The Court may fix a different time limit based upon the procedural timetable established pursuant to Article 24(2). 2 The Court may extend the time limit pursuant to a reasoned request from the arbitral tribunal or on its own initiative if it decides it is necessary to do so.
Article 31
Making of the Award 1 When the arbitral tribunal is composed of more than one arbitrator, an award is made by a majority decision. If there is no majority, the award shall be made by the president of the arbitral tribunal alone. 2 The award shall state the reasons upon which it is based. 3 The award shall be deemed to be made at the place of the arbitration and on the date stated therein.
Article 32
Award by Consent If the parties reach a settlement after the file has been transmitted to the arbitral tribunal in accordance with Article 16, the settlement shall be recorded in the form of an award made by consent of the parties, if so requested by the parties and if the arbitral tribunal agrees to do so.
ICC Arbitration Rules AWARDS
Article 33
Scrutiny of the Award by the Court Before signing any award, the arbitral tribunal shall submit it in draft form to the Court. The Court may lay down modifications as to the form of the award and, without affecting the arbitral tribunal’s liberty of decision, may also draw its attention to points of substance. No award shall be rendered by the arbitral tribunal until it has been approved by the Court as to its form.
Article 34
Notification, Deposit and Enforceability of the Award 1 Once an award has been made, the Secretariat shall notify to the parties the text signed by the arbitral tribunal, provided always that the costs of the arbitration have been fully paid to the ICC by the parties or by one of them. 2 Additional copies certified true by the Secretary General shall be made available on request and at any time to the parties, but to no one else. 3 By virtue of the notification made in accordance with Article 34(1), the parties waive any other form of notification or deposit on the part of the arbitral tribunal. 4 An original of each award made in accordance with the Rules shall be deposited with the Secretariat. 5 The arbitral tribunal and the Secretariat shall assist the parties in complying with whatever further formalities may be necessary. 6 Every award shall be binding on the parties. By submitting the dispute to arbitration under the Rules, the parties undertake to carry out any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made.
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Arbitration Article 35
Correction and Interpretation of the Award; Remission of Awards 1 On its own initiative, the arbitral tribunal may correct a clerical, computational or typographical error, or any errors of similar nature contained in an award, provided such correction is submitted for approval to the Court within 30 days of the date of such award. 2 Any application of a party for the correction of an error of the kind referred to in Article 35(1), or for the interpretation of an award, must be made to the Secretariat within 30 days of the receipt of the award by such party, in a number of copies as stated in Article 3(1). After transmittal of the application to the arbitral tribunal, the latter shall grant the other party a short time limit, normally not exceeding 30 days, from the receipt of the application by that party, to submit any comments thereon. The arbitral tribunal shall submit its decision on the application in draft form to the Court not later than 30 days following the expiration of the time limit for the receipt of any comments from the other party or within such other period as the Court may decide. 3 A decision to correct or to interpret the award shall take the form of an addendum and shall constitute part of the award. The provisions of Articles 31, 33 and 34 shall apply mutatis mutandis. 4 Where a court remits an award to the arbitral tribunal, the provisions of Articles 31, 33, 34 and this Article 35 shall apply mutatis mutandis to any addendum or award made pursuant to the terms of such remission. The Court may take any steps as may be necessary to enable the arbitral tribunal to comply with the terms of such remission and may fix an advance to cover any additional fees and expenses of the arbitral tribunal and any additional ICC administrative expenses.
ICC Arbitration Rules costs
Article 36
Advance to Cover the Costs of the Arbitration 1 After receipt of the Request, the Secretary General may request the claimant to pay a provisional advance in an amount intended to cover the costs of the arbitration until the Terms of Reference have been drawn up. Any provisional advance paid will be considered as a partial payment by the claimant of any advance on costs fixed by the Court pursuant to this Article 36. 2 As soon as practicable, the Court shall fix the advance on costs in an amount likely to cover the fees and expenses of the arbitrators and the ICC administrative expenses for the claims which have been referred to it by the parties, unless any claims are made under Article 7 or 8 in which case Article 36(4) shall apply. The advance on costs fixed by the Court pursuant to this Article 36(2) shall be payable in equal shares by the claimant and the respondent. 3 Where counterclaims are submitted by the respondent under Article 5 or otherwise, the Court may fix separate advances on costs for the claims and the counterclaims. When the Court has fixed separate advances on costs, each of the parties shall pay the advance on costs corresponding to its claims. 4 Where claims are made under Article 7 or 8, the Court shall fix one or more advances on costs that shall be payable by the parties as decided by the Court. Where the Court has previously fixed any advance on costs pursuant to this Article 36, any such advance shall be replaced by the advance(s) fixed pursuant to this Article 36(4), and the amount of any advance previously paid by any party will be considered as a partial payment by such party of its share of the advance(s) on costs as fixed by the Court pursuant to this Article 36(4).
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Arbitration 5 The amount of any advance on costs fixed by the Court pursuant to this Article 36 may be subject to readjustment at any time during the arbitration. In all cases, any party shall be free to pay any other party’s share of any advance on costs should such other party fail to pay its share. 6 When a request for an advance on costs has not been complied with, and after consultation with the arbitral tribunal, the Secretary General may direct the arbitral tribunal to suspend its work and set a time limit, which must be not less than 15 days, on the expiry of which the relevant claims shall be considered as withdrawn. Should the party in question wish to object to this measure, it must make a request within the aforementioned period for the matter to be decided by the Court. Such party shall not be prevented, on the ground of such withdrawal, from reintroducing the same claims at a later date in another proceeding. 7 If one of the parties claims a right to a set-off with regard to any claim, such set-off shall be taken into account in determining the advance to cover the costs of the arbitration in the same way as a separate claim insofar as it may require the arbitral tribunal to consider additional matters.
Article 37
Decision as to the Costs of the Arbitration 1 The costs of the arbitration shall include the fees and expenses of the arbitrators and the ICC administrative expenses fixed by the Court, in accordance with the scale in force at the time of the commencement of the arbitration, as well as the fees and expenses of any experts appointed by the arbitral tribunal and the reasonable legal and other costs incurred by the parties for the arbitration. 2 The Court may fix the fees of the arbitrators at a figure higher or lower than that which would result from the application of the relevant scale should this be deemed necessary due to the exceptional circumstances of the case.
ICC Arbitration Rules costs
3 At any time during the arbitral proceedings, the arbitral tribunal may make decisions on costs, other than those to be fixed by the Court, and order payment. 4 The final award shall fix the costs of the arbitration and decide which of the parties shall bear them or in what proportion they shall be borne by the parties. 5 In making decisions as to costs, the arbitral tribunal may take into account such circumstances as it considers relevant, including the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner. 6 In the event of the withdrawal of all claims or the termination of the arbitration before the rendering of a final award, the Court shall fix the fees and expenses of the arbitrators and the ICC administrative expenses. If the parties have not agreed upon the allocation of the costs of the arbitration or other relevant issues with respect to costs, such matters shall be decided by the arbitral tribunal. If the arbitral tribunal has not been constituted at the time of such withdrawal or termination, any party may request the Court to proceed with the constitution of the arbitral tribunal in accordance with the Rules so that the arbitral tribunal may make decisions as to costs.
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ICC Arbitration Rules
Arbitration MISCELLANEOUS
Article 38
Modified Time Limits 1 The parties may agree to shorten the various time limits set out in the Rules. Any such agreement entered into subsequent to the constitution of an arbitral tribunal shall become effective only upon the approval of the arbitral tribunal. 2 The Court, on its own initiative, may extend any time limit which has been modified pursuant to Article 38(1) if it decides that it is necessary to do so in order that the arbitral tribunal and the Court may fulfil their responsibilities in accordance with the Rules.
Article 39
Waiver A party which proceeds with the arbitration without raising its objection to a failure to comply with any provision of the Rules, or of any other rules applicable to the proceedings, any direction given by the arbitral tribunal, or any requirement under the arbitration agreement relating to the constitution of the arbitral tribunal or the conduct of the proceedings, shall be deemed to have waived its right to object.
Article 40
Limitation of Liability The arbitrators, any person appointed by the arbitral tribunal, the emergency arbitrator, the Court and its members, the ICC and its employees, and the ICC National Committees and Groups and their employees and representatives shall not be liable to any person for any act or omission in connection with the arbitration, except to the extent such limitation of liability is prohibited by applicable law.
Article 41
General Rule In all matters not expressly provided for in the Rules, the Court and the arbitral tribunal shall act in the spirit of the Rules and shall make every effort to make sure that the award is enforceable at law.
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