ISC Holding AG v. Nobel Biocare Finance AG
688 F.3d 98
| 2d Cir. | 2012Background
- ISC challenges a district court order vacating its notice of dismissal and a later judgment dismissing its petition to compel arbitration with prejudice.
- The dispute centers on an Asset Management Facilitation Agreement that allegedly required arbitration under ICC rules; Nobel argued lack of enforceable arbitration and questioned authority and personal jurisdiction.
- ISC sought to dismiss under Rule 41(a)(1)(A)(i) at a late stage, shortly before an evidentiary hearing, while Nobel pressed for recusal and for relief from dismissal.
- The district court denied the recusal motion and vacated the notice of dismissal, allowing Nobel to proceed, leading to dismissal of the petition to compel arbitration with prejudice.
- On appeal, the court holds that recusal was not warranted and that vacatur of the voluntary dismissal was proper, because Rule 41(a)(1)(A)(i) does not apply to petitions to compel arbitration and FAA provisions interact with Rule 81 to preclude unilateral dismissal in this context.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the district court abused its discretion by denying ISC’s recusal motion. | ISC contends Judge Stanton’s ex parte, in camera exchange with ISC’s counsel disclosed prejudicial information. | Nobel argues the information was incidental; no improper bias existed. | No abuse of discretion; recusal denied. |
| Whether the district court properly vacated ISC’s Rule 41(a)(1)(A)(i) notice of dismissal. | ISC’s voluntary dismissal was proper under Rule 41(a)(1)(A)(i). | Rule 41(a)(1)(A)(i) does not apply to petitions to compel arbitration under the FAA; vacatur was appropriate. | Vacatur affirmed; Rule 41(a)(1)(A)(i) inapplicable to §4 petitions. |
| Whether Rule 41(a)(1)(A)(i) can be applied in §4 proceedings given FAA 6 and Rule 81(a)(6). | Rule 41 remains available; the FAA does not preempt Rule 41. | FAA provisions preclude serving an answer or motion; Rule 81 allows FAA procedures to govern. | Rule 41 not preempted by FAA; in this context, Rule 41 cannot govern unilateral dismissal. |
Key Cases Cited
- Liteky v. United States, 510 U.S. 540 (U.S. 1994) (bias standard; appearance of bias evaluated objectively)
- In re IBM, 45 F.3d 641 (2d Cir. 1995) (recusal affirmed in rare cases)
- Harvey Aluminum, Inc. v. American Cyanamid Co., 203 F.2d 105 (2d Cir. 1953) (recusal/Rule 41 limitations discussed; extreme facts)
- Thorp v. Scame, 599 F.2d 1169 (2d Cir. 1979) (limitations on unilateral dismissals; Rule 41.)
- Productos Mercantiles E Industriales, S.A. v. Faberge USA Inc., 23 F.3d 41 (2d Cir. 1994) (Rule 12(b) in arbitration contexts; pleading vs motion distinction)