Case of the Day: In re Dubey
Posted on June 25, 2013
The case of the day is In re Dubey (C.D. Cal. 2013). The case raises a question we have considered many times before, and which is also the subject of S.I. Strong’s excellent paper: is a private arbitration a “proceeding in a foreign or international tribunal,” for purposes of 28 U.S.C. § 1782?
Microelectronics Technology, Inc., a Taiwanese firm, and its US subsidiary, MTI Laboratory, commenced an arbitration against Prabhat K. Dubey and others. The arbitration involved a 2009 sale of assets to MTI. A third party, Powerwave Technologies, Inc., had sued MTI for patent infringement, and MTI sought indemnification from Dubey and others under the terms of the agreement governing the asset sale. The arbitration was to take place in Los Angeles under the American Arbitration Association’s International Dispute Resolution Procedures.
The decision contains a useful summary of the state of the law: prior to Intel it was clear that private arbitration tribunals were not within the scope of the statute, but that in light of Intel a split of authority on the question developed. The judge helpfully cites cases on both sides of the question from around the country. In the end, the judge concluded that private international arbitrations are not within the scope of § 1782. The judge reasoned that Intel was not meant to expand the meaning of “foreign or international tribunal” and that there was a real distinction between private arbitrations and treaty arbitrations that justified different treatment.
The most interesting aspect of the decision, I think, is the judge’s consideration of whether the arbitration was international in the first place—a question the judge found it unnecessary to decide given his announcement of a per se rule regarding private arbitrations. (Wouldn’t it have been preferable to decide the case on the narrower ground? But I digress). On the one hand, the place of the arbitration was California, and the parties were mostly US parties. On the other hand, the case was “international in nature” and conducted under the AAA rules applicable to international disputes. A more relevant consideration, which the court didn’t mention, was that the arbitral award would be subject to the New York Convention, as not all of the parties were US citizens. See 9 U.S.C. § 202. But it seems to me that it is kind of crazy to think of a private arbitral tribunal sitting in the United States as a foreign or international tribunal. Wouldn’t the better answer be to seek a subpoena from the arbitrators themselves under 9 U.S.C. § 7? Of course, unlike an application under § 1782, that would require an order from the tribunal itself.