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US 31 August 2020 Flextronics
United States District Court, Northern District of California, 31 August 2020
(Flextronics International USA, Inc. v. Murata Manufacturing Co., Ltd. et al.)
US 31 August 2020 Flextronics
The Court referred the case to arbitration in Hong Kong pursuant to the arbitration clause in the parties' agreement. It held that the arbitration was governed by the New York Convention because all the conditions therefor were met: there was an agreement in writing within the meaning of the Convention; the agreement provided for arbitration in the territory of a Convention signatory – here, Hong Kong; the agreement arose out of a commercial relationship; and at least one of the parties to the agreement is not an American citizen. Since the contract between the parties incorporated the rules of the HKIAC, all arbitrability questions were delegated to the arbitrator.
The court discusses the meaning and effect of the referral of the resolution of disputes to arbitration, including: who can ask for referral and when, whether a party has waived its right to request arbitration, the defense that there was no contract at all; whether there was a condition precedent to the commencement of arbitration (e.g. mediation), stay of proceedings v. compelling arbitration, and national procedural specificities such as remand and removal (US), effect of class action. etc.
The court discusses the principle of competence-competence, including whether the parties “intended to have arbitrability decided by an arbitrator”, and the separability of the arbitration agreement from the main contract.