Nokia Corp., et al. v. AU Optronics Corp. (AUO), et al., MDL No. 1827 (N.D. Cal. July 2011), orders arbitration on the basis of reasoning that is noteworthy for the litigation of international disputes. Nokia’s complaint alleges a price-fixing conspiracy by suppliers of liquid crystal display (LCD) panels. AUO asserted, as its fifty-second affirmative defense: To the extent Nokia has agreed to arbitration or chosen a different form for the resolution of its claims against AUO, its claims are barred and should be dismissed”.
Still, the District Court granted the motion to compel arbitration.
First, the District Court held that international commercial arbitration agreements were governed by the New York Convention and that the “federal policy favoring enforcement of arbitration agreements ‘applies with special force in the field of international commerce” (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 489 U.S. 614 (1985).
Second, the District Court reviewed the arbitration language, which required the arbitration of “[a]ny disputes related to this Agreement”. The District Court rejected the argument that claims of alleged industry-wide price-fixing “existing wholly apart from the parties’ contractual relationship and thus are not governed” the by arbitration clause. In so deciding, the District Court found that the language of the agreement was sufficiently similar to that in Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999), which also compeled arbitration of an antitrust claim. Yet the language in Simula was “[a]ll disputes arising in connection with” the agreement, not “disputes related to” the agreement. The District Court also found that “it is also necessary to find that some reference to the contract is essential to determining the outcome of the dispute”.
Third, the District Court found that AUO had not waived its right to compel arbitration even though AUO litigated for over a year, joined other defendants in a motion to dismiss, filed an answer, participated in discovery, and took part is a meet-and-confer process.