Publicis Commun. v. True N. Commun.

• Decision Date: 14 March 2000
• Docket Number: Nos. 99-1199,s. 99-1199
• Citation: 206 F.3d 725
• Parties: (7th Cir. 2000) PUBLICIS COMMUNICATION, Plaintiff-Counterclaim Defendant-Appellant and PUBLICIS S.A., a French corporation, Counterclaim Defendant-Appellant, v. TRUE NORTH COMMUNICATIONS INC., Defendant-Counterclaim Plaintiff-Appellee. & 99-3424
• Court: U.S. Court of Appeals — Seventh Circuit

Page 725

206 F.3d 725 (7th Cir. 2000)

PUBLICIS COMMUNICATION, Plaintiff-Counterclaim Defendant-Appellant and PUBLICIS S.A., a French corporation, Counterclaim Defendant-Appellant, v. TRUE NORTH COMMUNICATIONS INC., Defendant-Counterclaim Plaintiff-Appellee.

Nos. 99-1199 & 99-3424

In the United States Court of Appeals For the Seventh Circuit

Argued February 14, 2000

Decided March 14, 2000

Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 97 C 8263--Joan B. Gottschall, Judge. [Copyrighted Material Omitted]

Before BAUER, FLAUM, and EVANS, Circuit Judges.

EVANS, Circuit Judge.

Arbitration can be an effective way to resolve a dispute in less time, at less expense, and with less rancor than litigating in the courts. Arbitration loses some of its luster, though, when one party refuses to abide by the outcome and the courts are called in after all for enforcement. This is one of those situations.

A joint venture between two advertising companies, Chicago-based True North Communications Inc. and Paris-based Publicis Communication (whose French corporate parent is Publicis S.A.), that had begun in 1989 came apart in May 1997. With one exception that is irrelevant to this case,¹ True North and Publicis agreed to arbitrate any disputes arising from their divorce before the London Court of International Arbitration under the arbitration rules of the United Nations Commission on International Trade Law. Needless to say, disagreements popped up, including whether Publicis had to turn over tax records that True North said it needed to file with the Internal Revenue Service and the Securities and Exchange Commission.

Danish attorney Allan Philip, French law professor Alain Viandier, and former U.S. Attorney General Nicholas Katzenbach were appointed to handle the arbitration, with Philip serving as chairman of the tribunal. In an October 30, 1998, "order" signed by Philip "for and on behalf of the Arbitrators," the tribunal told Publicis to provide True North with the tax information for 1994 to 1996 by November 23, 1998. When Publicis failed to comply, True North went to the Northern District of Illinois to try to confirm the arbitration decision, the first step toward federal court enforcement of an arbitration ruling. Judge Joan Gottschall confirmed the arbitration ruling and later rejected Publicis' Rule 60(b) motion to revisit her decision.

We are tempted to throw out this case as moot. True North has received from Publicis all the tax records it wanted,² a fact neither side bothered to disclose to us until prompted by our questions during the oral argument. As the parties might be aware, deciding live disputes keeps us busy enough and we feel no need to moonlight by rendering advisory opinions. Publicis insists, however, that although True North now says it is satisfied, the case is not moot because Publicis still has not turned over all of the records literally called for by the tribunal's broad order and thus still is not in full compliance with Judge Gottschall's ruling. Given the history of bickering between these litigants and the possibility they might find a way to return to court another day if we brand their current squabble moot, deciding this case on the merits seems prudent.

In reviewing the district court's confirmation of the arbitration decision, we review findings of fact for clear error and decide questions of law de novo. Geneva Sec., Inc. v. Johnson, 138 F.3d 688, 691 (7th Cir. 1998).

The Convention on the Recognition and Enforcement of Foreign Arbitral Awards, commonly known as the New York Convention and incorporated into American law at 9 U.S.C. sec. 201 et seq., governs judicial confirmation of arbitration decisions like this that arise out of agreements between a U.S. citizen (True North) and a citizen of a foreign nation such as France that signed the convention (Publicis). "The court shall confirm the award unless it finds one of the grounds for refusal or deferral of recognition or enforcement of the award specified in the said Convention." 9 U.S.C. sec. 207. Article V(1)(e) of the convention specifies several exceptions to judicial enforcement, including awards that have not yet become binding on the parties.

Publicis says the tribunal's decision was an interim order and, under the convention, only arbitral "awards" are final and subject to confirmation. Publicis insists that until the order was final, True North was confined to seeking relief from the tribunal itself or the courts of England, the site of the arbitration. True North says the convention allows judicial confirmation of final rulings, whether they are termed "awards" or "orders," and insists that the tribunal's October 30 opinion was final. Although Publicis suggests that our ruling will cause the international arbitration earth to quake and mountains to crumble, resolving this case actually requires determining only whether or not this particular order by this particular arbitration tribunal regarding these particular tax records was final. If the arbitration tribunal's October 30, 1998, decision was final, then Judge Gottschall had the authority to confirm it. If the arbitrators' decision was not final, then the district court jumped the gun.

Publicis places great importance on the difference between an award and an order. True North requested an "award" from the arbitration tribunal on the tax records issue, but the tribunal called its decision an "order." The arbitration rules the parties agreed upon refer to final decisions as "awards." UNCITRAL Arbitration Rules, Articles 31-37 (1977). The law governing judicial enforcement of arbitral decisions is called the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral "Awards." 9 U.S.C. sec. 201. The convention speaks only of recognizing and enforcing an arbitral "award"; it does not refer to an arbitral order or any other comparable term. Commentators describe "awards" as final and enforceable. See Alan Redfern & Martin Hunter, Law and Practice of International Commercial Arbitration 360, (1991); Mauro Rubino-Sammartano, International Arbitration Law 410 (1989); Douglas D. Reichert, Provisional Remedies in the Context of International Commercial Arbitration, 3 Int'l Tax & Bus. Lawyer 368, 395 (1986).

Publicis' position is that an arbitral ruling can be final in every respect, but unless the document bears the word "award" it is not final and is unenforceable. This is extreme and untenable formalism. The New York Convention, the United Nations arbitration rules, and the commentators' consistent use of the label "award" when discussing final arbitral decisions does not bestow transcendental significance on the term. Their treatment of "award" as interchangeable with final does not necessarily mean that synonyms such as decision, opinion, order, or ruling could not also be final. The content of a decision-- not its nomenclature--determines finality.

The Federal Arbitration Act also uses "award" in conjunction with finality, 9 U.S.C. sec.sec. 9 and 10, but this circuit and others have found arbitration decisions lacking the "award" tag to be final. In Yasuda Fire & Marine Insurance Company of Europe v. Continental Casualty Company, 37 F.3d 345 (7th Cir. 1994), we considered whether "an interim order of security" constituted a final award and thus was subject to being judicially vacated under 9 U.S.C. sec. 10(a)(4). Because the order was necessary to prevent the final award from becoming meaningless, we decided that the order was final and thus could be immediately challenged. 37 F.3d at 347-48. Other decisions cited in Yasuda reach similar results. See Pacific Reinsurance Management Corp. v. Ohio Reinsurance Corp., 935 F.2d 1019, 1022-23 (9th Cir. 1991) (arbitral "interim final order" providing temporary equitable relief necessary to make potential final award meaningful found to be final and subject to confirmation); Island Creek Coal Sales Co. v. City of Gainesville, 729 F.2d 1046, 1049 (6th Cir. 1984) (arbitral "interim order" that finally and definitively disposed of separate, discrete, self-contained issue found to be final and subject to confirmation); Sperry Int'l Trade v. Israel, 689 F.2d 301, 304 n.3 (2d Cir. 1982) (appeals court itself did not consider, but...