Adam Technologies International S.A. De C v. v. Sutherland Global Services, Inc.
2013 U.S. App. LEXIS 18513
| 5th Cir. | 2013Background
- Arbitration demand filed in March 2010 for about $618,626 under the Master Services Agreement (MSA) directing arbitration in Rochester, NY with AAA rules.
- Adam asserted the Letter of Intent (LOI) controlled disputes about interpretation/enforcement; Sutherland contended the MSA superseded the LOI and governed arbitration.
- District court dismissed Adam’s claims for resolution by arbitration, indicating the MSA controlled and the LOI was superseded.
- Mediation in 2011 failed; the parties proceeded to arbitration per the MSA/ICDR rules, with Spellane appointed by the parties and later challenged.
- ICDR sustained Spellane’s challenge due to ex parte communications; arbitration panel appointed a replacement, and hearings were scheduled for 2012.
- In 2011–2012, Adam sought to compel arbitration via post-judgment §5 motion; the district court later denied relief and this appeal followed, with a related NY petition to confirm the award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether ancillary jurisdiction allowed the district court to decide the post-judgment §5 motion. | Adam argues Kokkonen ancillary jurisdiction applies to enforce the court’s arbitration decree. | Sutherland contends no ancillary jurisdiction exists absent a retention or independent basis. | Ancillary jurisdiction existed to vindicate the decree and enforce arbitration. |
| Whether the district court should have appointed an arbitrator under §5 due to a lapse in naming/arbitration process. | Adam contends a lapse occurred because ICDR sustained Spellane’s challenge and procedure broke down. | Sutherland argues there was no lapse; ICDR proper under its rules. | No lapse; district court properly declined to intervene, appellate review focused on arbitral procedure. |
| Whether procedural challenges to the ICDR appointment should be resolved by the arbitrator, not the district court. | Adam argues district court must resolve challenges to the arbitrator per FAA §5. | Sutherland asserts such challenges are procedural questions for the arbitrator. | Procedural challenges reserved for arbitration; court did not err in denying appointment. |
Key Cases Cited
- Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (U.S. 1994) (ancillary jurisdiction depends on retention or settlement terms in dismissal order)
- BP Exploration Libya Ltd. v. ExxonMobil Libya Ltd., 689 F.3d 481 (5th Cir. 2012) (lapse in naming/arbitrator process may justify court intervention)
- Brook v. Peak Int’l, Ltd., 294 F.3d 668 (5th Cir. 2002) (enforcement/arbitration appointment standards)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (U.S. 2002) (presumption that arbitrator questions go to arbitrator)
- Gulf Guar. Life Ins. Co. v. Conn. Gen. Life Ins. Co., 304 F.3d 476 (5th Cir. 2002) (procedural questions should be decided by arbitrator)