Business Law 13th Edition by Frank Cross, Kenneth Clarkson, Roger LeRoy Miller

تمرين 16

S T Oil Equipment Machinery, Ltd.
v. Juridica Investments, Ltd.
United States Court of Appeals, Fifth Circuit, 2012 WL 28242 (2012).
BACKGROUND AND FA CTS Juridica Investments, Ltd. (JIL), entered into a financing contract with S T Oil Equipment Machinery, Ltd., a U.S. company. The contract included an arbitration provision stating that any disputes would be arbitrated "in St. Peter Port, Guernsey, Channel Islands." The contract between the parties, JIL initiated arbitration in Guernsey. Nevertheless, S T filed a suit in federal district court in the United States. When JIL filed a motion to dismiss in favor of arbitration, the court granted the motion and compelled arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. S T appealed.
IN THE LANGUAGE OF THE COURT PER CURIAM: [By the Whole Court] * * * * The parties dispute whether the fourth * * * factor [that one party is not an American citizen] is satisfied in this case. In considering this fourth factor, courts must ask the following: Is a party to the agreement not an American citizen or does the commercial relationship have some reasonable relation with one or more foreign states? If either question is answered in the affirmative, then the fourth * * * factor is satisfied.
* * * * Although it is not absolutely clear where JIL has its principal place of business, it is evident that the commercial relationship between S T and JIL has some reasonable relation with one or more foreign states. Even if JIL's principal place of business is in the United States, the * * * agreement's arbitral clause can still be enforceable under the Convention if the legal relationship between JIL and S T involved "property abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states." As we stated in [another case], this reasonable relation with a foreign state must be "independent of the arbitral clause itself." [Emphasis added.]
Here, it is evident that the legal relationship between JIL and S T envisaged performance abroad. The * * * agreement specifically states that it was executed in Guernsey and would be performed by JIL "exclusively and wholly in and from Guernsey." Indeed, pursuant to the terms of the * * * agreement, JIL performed part of the agreement abroad when it wired funds from Guernsey to cover * * * legal fees and costs
* * *. Given these facts, it is evident that the commercial relationship between S T and JIL has some reasonable relation with one or more foreign states that is independent of the arbitral clause itself. As such, the fourth * * * factor is satisfied in this case. The district court therefore did not err in compelling arbitration.
DECISION AND REMEDY The U.S. Court of Appeals for the Fifth Circuit held that arbitration was required under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It therefore affirmed the district court's judgment compelling arbitration.
THE GLOBAL DIMENSION?What would happen if Congress did not require a reasonable relationship with a foreign state for arbitration agreements between U.S. citizens doing business abroad? Would there be more or fewer agreements to arbitrate disputes abroad?
THE TECHNOLOGICAL DIMENSION?How might these parties have avoided the time and expense of settling their dispute in a foreign jurisdiction?