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FULLER CO. v. COMPAGNIE DES BAUXITES DE GUINEE

October 19, 1976

FULLER COMPANY
v.
COMPAGNIE DES BAUXITES DE GUINEE



The opinion of the court was delivered by: KNOX

 In this case, the court must interpret the scope and meaning of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, enacted into law in the United States as 9 U.S.C. 201 et seq. and the extent of the parties' contractual agreement to arbitrate. On June 5, 1970, Fuller Company, a Pennsylvania corporation, and Compagnie Des Bauxites De Guinee [Hereinafter: CBG], a Delaware Corporation, executed a contract under which Fuller would design, manufacture, and sell a drying and calcining plant and certain related equipment to be used at CBG's bauxite plant in the Republic of Guinea. The equipment was to be manufactured by Fuller in the United States and shipped FOB at Philadelphia.

 In April, 1974, Societe de Traction et d'Electricite, S.A. ("Tractionel"), a Belgian corporation retained by CBG as a consulting engineer, issued a draft of a provisional acceptance certificate with certain reservations relating to alleged defects in the equipment supplied by Fuller. Fuller refused to sign this certificate as well as three subsequent drafts of provisional acceptance certificates issued in December, 1974, by Tractionel.

 On January 28, 1975, a meeting of representatives of CBG, Tractionel, and Fuller was held in Pittsburgh, Pennsylvania. Fuller alleges that the purpose and effect of this meeting was to settle all outstanding differences of the parties. CBG, on the other hand, alleges that the meeting was solely concerned with the parties' differences over the drafts of the provisional acceptance certificates and that the meeting did not result in any final settlement agreements.

 On November 5, 1975, CBG submitted a request for arbitration to the Court of Arbitration of the International Chamber of Commerce seeking indemnification for certain costs related to alleged defects in the equipment supplied by Fuller. Fuller responded on December 29, 1975, but pleaded the alleged January 28, 1975, settlement as a defense. On April 14, 1975, Fuller, filed a petition for a declaratory judgment in the Court of Common Pleas of Allegheny County. Fuller's petition sought a determination of the binding effect of the January 28, 1975, settlement. On May 20, 1975, CBG removed the case to this court.

 This opinion will not resolve the underlying claims and disputes between the parties. Rather, the court at this stage of the proceedings is called upon to determine which of three possible forums should proceed with factual hearings on the merits:

 (1) This court.

 (2) An arbitration panel in Pittsburgh. *fn1"

 (3) The Court of Common Pleas of Allegheny County.

 Four motions are pending before the court:

 (1) Fuller's motion to strike the supplemental affidavit of John Lambert and the affidavit of Paul DuPont.

 (2) Fuller's motion to remand.

 (3) CGB's motion for stay of trial and all further proceedings pending issuance of final award or determination in the arbitration.

 (4) Fuller's motion for a preliminary injunction.

 (1) Motion to Strike Affidavits

 This motion will be denied and the court will consider all of the evidence presented by the parties. While the affidavits of John W. Lambert and Paul DuPont are parol evidence, as Fuller argues, they are clearly admissible under two well recognized exceptions to the parol evidence rule.

 First, the court has the right to consider extrinsic evidence when the terms of a contract are ambiguous. Keystone Aeronautics Corporation v. R. J. Enstrom Corporation, 499 F.2d 146 (3d Cir. 1974); Thompson-Starrett International, Inc. v. Tropic Plumbing, Inc., 457 F.2d 1349 (3d Cir. 1972). Such an ambiguity exists in regard to Fuller's contractual obligation to provide personnel in Guinea -- a matter of crucial significance in considering the jurisdiction of this court. (Discussed in detail in Part Two of this opinion). The contract contains the following conflicting provisions, clearly creating an ambiguity:

 
"The supervision of erection and the provisions of a chief operator after the startup of industrial operation are not included.
 
Appendix II to the contract.
 
Section 6. At the request of the Engineer, the Contractor shall provide the services of an experienced chief erection supervisor and one or more other experienced erection supervisors who shall collectively supply the necessary know-how, technical information and advice for proper off-loading at Port Kamsar, erection, installation and Start-up of Industrial Operation of the Equipment, and who shall give the necessary instructions for such erection and installation to the erection and electrical personnel designated by the Engineer to receive such instructions. The Contractor shall provide the services of such supervisors for such periods as shall have been reasonably requested in writing by the Engineer.
 
Section 7. In order to ensure the proper operation of the Equipment after the Start-up of Industrial Operation, the Contractor shall provide the services of a chief operator if so requested in writing by the Engineer, to operate the Equipment for such period as shall have been reasonably requested by the Engineer."

 A second exception to the parol evidence rule is that the conduct of the parties may serve to vary the terms of a contract. Under the Uniform Commercial Code, applying to this case under either New York or under Pennsylvania law, courses of dealing, usages of trade, courses of performance, modifications, and waivers may all supplement or alter the written terms of a contract. *fn2" The affidavits of Lambert and DuPont fall under one or more of these five exceptions to the parol evidence rule.

 (2) Motion to Remand

 
(1) The agreement involves property located abroad.
 
(2) The agreement envisages performance abroad.
 
(3) The agreement envisages enforcement abroad.
 
(4) The agreement has some other reasonable relation with one or ...

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