Control Screening LLC v. Technological Application & Production Co. (Tecapro), HCMC-Vietnam
687 F.3d 163
3rd Cir.2012Background
- Control Screening (NJ) and Tecapro (Vietnam) contract for 28 AutoClear X-ray machines at $1,021,156 total.
- Arbitration clause states disputes to be settled at an ‘International Arbitration Center of European countries’ for claims in the suing party’s country under Center rules.
- Tecapro initiated arbitration in Belgium in 2010; Control Screening sought to compel arbitration in New Jersey in 2011.
- District Court: subject matter jurisdiction under the New York Convention; personal jurisdiction over Tecapro; held arbitration in NJ.
- Court held the forum clause non-existent as written, found it null and void, and severed it, allowing arbitration under FAA to proceed in NJ.
- This appeal concerns whether NJ is the proper arbitration forum and whether the district court erred on jurisdiction, procedure, or forum interpretation.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court had personal jurisdiction over Tecapro. | Tecapro contacts NJ were sufficient for specific jurisdiction. | Contacts were insufficient or too attenuated; mixed with non-forum activities. | Yes, specific jurisdiction over Tecapro. |
| Whether the arbitration forum clause should govern the arbitration location. | Clause implicitly contemplates Forum in New Jersey. | Clause points to European centers; unclear and non-existent center. | Null and void due to non-existent forum; severable from arbitration agreement. |
| Whether the null and void forum clause affects the validity or location of arbitration. | Arbitration should proceed where agreement directs, i.e., New Jersey. | Forum ambiguity undermines enforceability of arbitration clause. | Arbitration remains valid; court can compel arbitration in the district. |
| Whether the district court properly applied the FAA in compelling arbitration within its district. | FAA Article II(3) and §206 permit arbitration in the suing party’s location. | Procedural burdens or evidentiary requirements misapplied; must follow New York Convention. | Affirmed; NJ arbitration compelled consistent with FAA. |
| Whether the district court’s handling of evidentiary matters and burden of proof was correct. | Court properly treated burden as on Tecapro after PJ established. | Court abused discretion by not holding evidentiary hearing. | No reversible error; no mandatory evidentiary hearing required. |
Key Cases Cited
- Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985) (minimum contacts for specific jurisdiction; contractual disputes)
- Gen. Elec. Co. v. Deutz AG, 270 F.3d 144 (3d Cir. 2001) (contract case; purposeful direction and connection to forum)
- World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286 (1980) (purposeful availment and fair play; international disputes)
- Rhone Mediterranee Compagnia Francese di Assicurazioni v. Lauro, 712 F.2d 50 (3d Cir. 1983) (null and void defense narrowly construed under NY Convention)
- PaineWebber Inc. v. Faragalli, 61 F.3d 1063 (3d Cir. 1995) (accrual of action to compel arbitration under §4; international context)
- Jain v. de Mérè, 51 F.3d 686 (7th Cir. 1995) (limits of §4; international arbitration jurisdiction)
- Great Earth Cos., Inc. v. Simons, 288 F.3d 878 (6th Cir. 2002) (severability of arbitration clause from void forum provision)
- Carteret Savings Bank v. Shushan, 954 F.2d 141 (3d Cir. 1992) (burden of proof in personal jurisdiction matters)