Valent Biosciences Corp. v. Kim-C1, LLC
952 N.E.2d 657
Ill. App. Ct.2011Background
- Valent BioSciences and Kim-C1 entered into a 1999 License Agreement governing CPPU and agricultural use, with arbitration provisions but no fixed arbitration location.
- Section 21.3 provides Illinois law governs the contract, but exclusive jurisdiction is limited by Section 21.4 and Exhibit 5.0 for dispute resolution.
- Exhibit 5.0 provides arbitration location to be chosen by the arbitrator if the parties cannot agree, with location outside either party's principal place of business.
- Arbitrations under the pact occurred in California, resulting in a 2008 final award and a 2010 interim award, both held in California.
- VBS filed March 22, 2010 in Cook County Circuit Court to vacate the interim award and sought a declaratory judgment on Illinois' exclusive jurisdiction; KIM countered by seeking confirmation of the 2010 award in California.
- The circuit court granted KIM’s 2-619 motion to dismiss for lack of subject matter jurisdiction; VBS appealed, challenging waiver and the declaratory judgment issue.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Illinois court has jurisdiction to vacate the arbitration award under the Act. | VBS argues Illinois has exclusive jurisdiction under the contract and Act. | KIM contends the silence about arbitration location defeats Illinois jurisdiction. | Illinois not proper tribunal; arbitration occurred in California per agreement. |
| Whether KIM waived objections to Illinois subject matter jurisdiction. | VBS asserts waiver by agreement and in KIM’s answer. | KIM argues no waiver of jurisdictional objections; answer preserved objections. | No waiver; objections preserved; waiver not shown. |
| Whether the circuit court erred in dismissing the declaratory judgment count. | VBS seeks declaratory relief on Illinois exclusivity to adjudicate the award. | KIM disputes Illinois jurisdiction; declaratory relief unnecessary if Illinois not proper tribunal. | Declaratory judgment count foregone; merits resolved by conclusion that Illinois not proper forum. |
| Whether the court should treat the dispute under the Act as justiciable in Illinois. | VBS frames the dispute as justiciable under the Act. | KIM emphasizes the contract’s arbitration venue dictates forum. | Act provides justiciability, but venue determined by contract; Illinois not proper forum. |
| Whether the agreement to arbitrate in Illinois was required for Illinois to exercise jurisdiction. | VBS contends Illinois has exclusive jurisdiction via contract. | KIM maintains arbitration location must be Illinois to confer jurisdiction. | Arbitration location not fixed in Illinois; agreement to arbitrate elsewhere precludes Illinois as proper forum. |
Key Cases Cited
- Belleville Toyota, Inc. v. Toyota Motor Sales, U.S.A., Inc., 199 Ill.2d 325 (2002) (justiciability and jurisdiction principles under Illinois Constitution)
- Chicago Southshore & South Bend R.R. v. Northern Indiana Commuter Transportation District, 184 Ill.2d 151 (1998) (arbitration venue must be designated for Illinois to hear arbitration awards)
- DHR International, Inc. v. Winston & Strawn, 347 Ill.App.3d 642 (2004) (where parties agree to arbitrate in another state, Illinois lacks jurisdiction to confirm the award)
- Costello v. Liberty Mutual Fire Insurance Co., 376 Ill.App.3d 235 (2007) (arbitration in Illinois or elsewhere affects circuit court jurisdiction under Act)
- Carr v. Gateway, Inc., 241 Ill.2d 15 (2011) (contract interpretation and parties' intent in arbitration provisions)
- In re Luis R., 239 Ill.2d 295 (2010) (subject matter jurisdiction and proper court review under constitutional framework)
- Southshore, Chicago Southshore & South Bend R.R. v. Northern Indiana Commuter Transportation District, 184 Ill.2d 151 (1998) (required arbitration in Illinois for Illinois courts to have jurisdiction to confirm awards)