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Steel Corporation of the Phillipines v. International Steel Services

July 31, 2006

STEEL CORPORATION OF THE PHILLIPINES, PLAINTIFF,
v.
INTERNATIONAL STEEL SERVICES, INC., DEFENDANT.



The opinion of the court was delivered by: Ambrose, Chief District Judge.

OPINION and ORDER OF COURT SYNOPSIS

Plaintiff, Steel Corporation of the Philippines ("SCP"), has brought the instant action seeking an order from this Court confirming a foreign arbitral award arising out of an arbitration proceeding conducted before the International Chamber of Commerce, International Court of Arbitration. (Docket No. 11). Defendant, International Steel Services, Inc. ("ISSI"), has filed a Motion for Judgment on the Pleadings pursuant to Rule 12(c). (Docket No. 14). Plaintiff, SCP, has filed a Response and Memorandum in Opposition (Docket Nos. 19 and 20). After careful consideration of the submissions of the parties and for the reasons set forth below, said Motion (Docket No. 14) is denied.

OPINION

I. BACKGROUND

The facts of this case are largely undisputed. SCP is a producer and wholesaler of steel products in the Philippines. ISSI is in the business of designing and constructing acid regeneration plants, which regenerate and recycle pickle liquor and other wastes from the steelmaking process. On April 1, 1996, ISSI and SCP entered into an Acid Regeneration Plant Supply and Installation Agreement ("Agreement I"), in which ISSI was to, inter alia, build a plant for SCP. On April 15, 1997, the parties entered into an Iron Oxide Sales Agreement ("Agreement II"), in which ISSI agreed to buy iron oxide produced by the plant that was the subject of Agreement I.

A dispute arose over Agreement II. Agreement II provides:

The validity, performance and enforcement of this Contract shall be governed by Philippine Laws. The parties agree that any dispute or claim arising out of this Contract shall be settled by arbitration in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. The proceedings on arbitration shall be conducted in Singapore. The arbitral award shall be final and binding on both parties. (Docket No. 1). SCP filed a Request for Arbitration on May 5, 2003. On June 24, 2004, the arbitrator issued an order in favor of SCP and requiring ISSI to pay a sum of money to SCP in accordance with the award. (Docket No. 1, pp. 12-45).

On January 19, 2006, SCP filed a Petition to Confirm Foreign Arbitration Award in the Court of Common Pleas of York County, Pennsylvania. (Docket No. 11). On March 10, 2006, ISSI filed a Notice of Removal in the United States District Court for the Middle District of Pennsylvania. On March 17, 2006, the case was transferred to the Western District of Pennsylvania. (Docket No. 11). Pending is a Motion for Judgment on the Pleadings, pursuant to Rule 12(c) of the Federal Rules of Civil Procedure. (Docket No. 14).

II. ANALYSIS

A. Legal Standard

The same standard of review applies to Motions brought pursuant to Rule 12(c) as it does to Motions brought pursuant to Rule 12(b)(b). Turbe v. Government of Virgin Isl., 938 F.2d 427, 428 (3d Cir. 1991). In deciding this motion, I must accept all the factual allegations as true, and must view the complaint in a light most favorable to the plaintiff. Colburn v. Upper Darby Twp., 838 F.2d 663, 664-65 (3d Cir.1988), cert. denied, 489 U.S. 1065, 109 S.Ct. 1338, 103 L.Ed.2d 808 (1989). I may dismiss the petition only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations. Haynes v. Metropolitan Life Ins. Co., 94 Fed.Appx. 956 (3d Cir. 2004). In other words, "[u]nder Rule 12(c), a court must 'view the facts in the pleadings in the light most favorable to the plaintiff and must grant the motion only if the moving party establishes that no material issue of fact remains and that it is entitled to judgment as a matter of law.'" Citisteel USA, Inc. v. General Elec. Co., 78 Fed.Appx. 832, *3 (3d Cir. 2003), quoting Shelly v. Johns-Manville Corp., 798 F.2d 93, 97 n. 4 (3d Cir.1986). With this standard in mind, I now turn to the issues of the case.

B. The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, 21 U.S.T. 2517

SCP seeks a confirmation of a foreign award. (Docket No. 1). As such, this case arises under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958 ("the Convention"), 21 U.S.T. 2517. 9 U.S.C. §201, et seq. "Within three years after an arbitral award falling under the Convention is made, any party to the arbitration may apply to any court having jurisdiction under this chapter for an order confirming the award as against any other party to the arbitration. The court shall confirm the award unless it finds one of the grounds for the refusal or deferral of recognition or enforcement of the award specified in the said Convention." 9 U.S.C. §207. Article V of the Convention sets forth the grounds for refusing to recognize or enforce an arbitral award. 21 U.S.T. 2517, Art. V.

ISSI had filed a Motion for Judgment on the Pleadings arguing that the foreign arbitral award in this case should not be confirmed based on three reasons set forth in Article V of the Convention. (Docket No. 14). The first reason specified by ISSI is that the award has not yet become binding on the parties. Id. The second reason is that the recognition or enforcement of the award would be contrary to public policy. Id. The third reason raised by ISSI is that the composition of the arbitral authority was not in accordance with the agreement of the parties. Id. SCP disagrees with ISSI arguing that the award is final and binding, the award is not ...


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