First Circuit affirms lower court's decision that Fed. R. Civ. P. 59(e) prevents presentation of new arguments in motions for reconsideration even when issues concerned relate to international arbitration
In 2000, Marks 3-Zet-Ernst Marks GmbH (Plaintiff), a German company, and Presstek, Inc. (Defendant), a Delaware corporation, had entered into a commercial agreement. The agreement stated that the Plaintiff would market Defendant's products in various parts of Europe. Neither party had the right to terminate the contract for three years, except under certain conditions.
Section 10(g) of the contract provided in part: "Applicable Law and Jurisdiction. Any dispute . . . between the Parties arising out of, or relating to, this Agreement which cannot be settled amicably shall be referred to, and determined by, arbitration in the Hague under the International Arbitration rules. The ruling by the arbitration court shall be final and binding....."
The arbitration clause notably fails to designate the specific arbitral body at The Hague for there are several. The contract also states that "the International Arbitration Rules" would govern the dispute when there are no rules by that name.
In April 2002, Defendant notified Plaintiff that it wished to terminate the contract. Plaintiff looked upon this termination as a contract breach and tried several times to persuade Defendant to arbitrate. The record shows only that the first request was under the UNCITRAL Arbitration Rules. All other attempts were unsuccessful. Plaintiff next sent letters to the Permanent Court of Arbitration at The Hague (PCA) asking it to launch an arbitration proceeding. In its application, Plaintiff asserted that the arbitration clause calls for UNCITRAL to provide the governing rules. The PCA did notify Defendant of Plaintiff's arbitration request, but raised questions about the PCA's competence to arbitrate this case. Defendant eventually responded to the PCA. It refused to stipulate to the applicability of the UNCITRAL Arbitration Rules, contending that the contract language was not clear enough. The PCA later concluded that it did lack the competence to handle this case.
In March 2004, Plaintiff again implored Defendant to arbitrate the dispute, this time pursuant to the Netherlands Arbitration Act. Defendant failed to respond. Plaintiff moved the New Hampshire federal court in April 2005 to compel arbitration under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, [21 U.S.T. 2517; T.I.A.S. 6997; 330 U.N.T.S. 3; June 7, 1959.] Plaintiff asked, inter alia, for an order directing Defendant to arbitrate in The Hague under the American Arbitration Act's International Rules. In effect, Plaintiff was trying to arbitrate the dispute at the PCA under rules which the PCA could not honor.
In September 2005, the district court dismissed Plaintiff's petition. Plaintiff moved for reconsideration under Fed. R. Civ. P. 59(e) which the district court denied. Plaintiff appealed but the First Circuit affirms.
In his Rule 59 motion, Plaintiff had urged new arguments. Stressing the broad federal policy favoring arbitration of disputes, it claimed (1) that it is entitled to arbitration in some forum (not necessarily the PCA), (2) that this could take place under some set of arbitration rules, (3) that it required a court hearing to sort out the possibilities. It argued that "the Supreme Court has noted that the policy favoring arbitration has "applies [sic] with special force in the field of international commerce.' See Restoration Pres. Masonry Inc. v. Grove Eur. Ltd., 325 F.3d 54, 60 (1st Cir. 2003) ...." [Slip op. 9] According to Plaintiff, it was not improper to wait until the motion for reconsideration to specify this relief since the petition was seeking "such other and further relief as the Court deems appropriate and just."
The First Circuit, however, disagrees. "[B]road policy favoring arbitration -- even in the context of international arbitration -- does not create an exception to the general rule that a motion to reconsider does not allow a party "to introduce new evidence or advance arguments that could and should have been presented to the district court prior to the judgment.' Aybar, 118 F.3d 10, 16 (1st Cir. 1997)." [Slip op. 10] .
"Arbitration clauses were not meant to be another weapon in the arsenal for imposing delay and costs in the dispute resolution process. . . . In the context of international contracts, the opportunities for increasing the cost, time, and complexity of resolving disputes are magnified by the presence of multiple possible fora, each with its own different substantive rules, procedural schematas, and legal cultures. This is fertile ground for manipulation and mischief, and acceptance of [plaintiff's] arguments would lead to the very problems the [New York] Convention sought to avoid." [Slip op. 10]
Citation: Marks 3-Zet-Ernst Marks GmbH & Co. KG v. Presstek, Inc., 455 F.3d 7 (1st Cir. 2006).
USA visa and immigration information is available at www.immigrationtelevision.com.
|
