Shaw Group Inc. v. Triplefine Intern. Corp.

Decision Date04 March 2003
Docket NumberDocket No. 01-9038.,Docket No. 01-9352.
Citation322 F.3d 115
PartiesThe SHAW GROUP INC., Stone & Webster, Inc., and Stone & Webster Asia, Inc., Petitioners-Appellees/Cross-Appellants, v. TRIPLEFINE INTERNATIONAL CORPORATION, Respondent-Appellant/Cross-Appellee.
CourtU.S. Court of Appeals — Second Circuit

William J.T. Brown, LeBoeuf, Lamb, Greene & MacRae, LLP, New York, NY, for Respondent-Appellant/Cross-Appellee.

Judith A. Lockhart, Carter, Ledyard & Milburn (William F. Sondericker, Gerald W. Griffen, of Counsel), New York, NY, for Petitioners-Appellees/Cross-Appellants.

Before: KEARSE, SACK, and RAGGI, Circuit Judges.

RAGGI, Circuit Judge.

Appellant Triplefine International Corporation ("Triplefine") appeals from an order of the District Court for the Southern District of New York (Lawrence M. McKenna, Judge) dated October 17, 2001, enjoining it from claiming as contract damages in arbitration those attorneys' fees and costs incurred in opposing motions to stay arbitration made by appellees Stone & Webster, Inc. ("Stone & Webster"), its affiliate, Stone & Webster Asia, Inc. ("S & W Asia"), and their parent company, The Shaw Group Inc. ("Shaw"), in the state and federal courts. Triplefine submits that the injunction should be vacated because the district court erred in (1) holding that the arbitrability of Triplefine's claim for fees and costs was an issue for the court rather than the arbitrator, and (2) concluding that the claim was outside the scope of the arbitration agreement. Stone & Webster, S & W Asia, and Shaw cross-appeal from the district court's order dated April 11, 2002, staying the injunction against Triplefine pending resolution of this appeal or an arbitral award on the fee claim.

Because the arbitration agreement at issue in this case provides for all disputes between the parties to be referred to the International Chamber of Commerce ("ICC"), and because the rules of that organization expressly provide for the International Court of Arbitration ("ICA") to resolve in the first instance any disputes about its own jurisdiction, we conclude that the arbitrability of Triplefine's contract claim for attorneys' fees and costs was a question for the arbitrator rather than the court. Accordingly, we vacate the district court's injunction.

I. Background

The issue on appeal concerns one aspect of a complex commercial dispute that has presented the district court with a host of motions, cross-motions, and motions for reconsideration over many months. We discuss only those facts necessary to place our decision in context.

A. The Triplefine Agreement with Stone & Webster International

Triplefine is a Taiwan corporation that on November 9, 1993 entered into a contract ("the Representation Agreement") with Stone & Webster International Corporation ("Stone & Webster International"), a Delaware corporation, to assist with the latter's business projects in Taiwan, notably, the construction of a nuclear power plant for the Taiwan Power Company. Pursuant to section III, paragraph 15, of the Representation Agreement, the parties agreed to submit any disputes concerning or arising out of their contract to the ICC for arbitration.

On June 2, 2000, with the Taiwan plant only partially completed, Stone & Webster International filed for federal bankruptcy protection in the District of Delaware. Its assets and liabilities were acquired at auction in mid-July, 2000, by a Louisiana corporation, Shaw, which in turn arranged for their formal assumption by Shaw's newly created subsidiary, Stone & Webster. In connection with this acquisition, and pursuant to 11 U.S.C. § 365 (1994), Stone & Webster International rejected its contract with Taiwan Power, and a new contract to complete the power plant was entered into by another Shaw subsidiary, S & W Asia.

Soon thereafter, on July 27, 2000, Stone & Webster International advised Triplefine that it was cancelling the Representation Agreement, which in turn prompted Triplefine to file a bankruptcy claim against Stone & Webster International for approximately $1.5 million. Later that same year, Triplefine attempted to garnish Stone & Webster International's assets in Taiwan, but the bankrupt corporation persuaded a Taiwan tribunal that Triplefine was first obligated to arbitrate the parties' dispute pursuant to the Representation Agreement.

B. Triplefine Files for Arbitration

On April 17, 2001, Triplefine filed a request for arbitration with the ICC, naming as respondents not only Stone & Webster International, but also Shaw, Stone & Webster, and S & W Asia. Before filing an answer to the arbitration notice, Shaw, Stone & Webster, and S & W Asia, on May 14, 2001, petitioned the New York Supreme Court to stay the arbitration. Shaw and S & W Asia asserted that they were not bound by the Representation Agreement, and Stone & Webster submitted that it should not be required to arbitrate a claim then pending in the bankruptcy court. Triplefine promptly removed the action to the United States District Court for the Southern District of New York.

C. The District Court Decisions
1. The August 1, 2001 Order Denying a Stay of Arbitration Between Triplefine and Stone & Webster

After reviewing extensive written submissions and hearing argument, the district court, in an unpublished Memorandum and Order dated August 1, 2001, denied Stone & Webster's motion to stay arbitration with Triplefine. Shaw Group, Inc. v. Triplefine Int'l Corp., No. 01 Civ. 4273, 2001 WL 883076 (S.D.N.Y. filed Aug. 3, 2001). Relying on our decision in Thomson-CSF, S.A. v. American Arbitration Ass'n, 64 F.3d 773, 776-79 (2d Cir.1995) (discussing theories on which non-signatories can be bound to arbitration agreements), the court concluded that Stone & Webster, by assuming the assets of Stone & Webster International, had obligated itself to comply with the arbitration provision of the Representation Agreement regarding any dispute over monies due Triplefine on the Taiwan power plant project. Further, because Stone & Webster was not itself a bankrupt entity, the court declined to stay ICC arbitration pending the outcome of Stone & Webster International's bankruptcy proceedings. On the other hand, because the district court found no evidence that Shaw or S & W Asia had assumed or directly benefitted from the Representation Agreement, it granted these parties' motion to stay arbitration with Triplefine.

On this appeal, the parties challenge none of these rulings.1 Instead, they focus on ensuing events and orders.

2. The October 17, 2001 Order Enjoining Triplefine from Pursuing an Arbitration Claim for Attorneys' Fees and Costs

On August 15, 2001, Triplefine amended its ICC arbitration request to charge Stone & Webster with breaching the Representation Agreement by pursuing a court stay of arbitration. It sought damages in an amount equal to its attorneys' fees and costs in opposing the stay motions.

Stone & Webster, Shaw, and S & W Asia moved to enjoin Triplefine from pursuing its amended arbitration claim. In an unpublished Memorandum and Order dated October 17, 2001, the district court granted appellees' motion. See Shaw Group, Inc. v. Triplefine Int'l Corp., No. 01 Civ. 4273, 2001 WL 1246583 (S.D.N.Y. filed Oct. 18, 2001). Preliminarily, it found that the arbitrability of Triplefine's claim for fees and costs was a question for the court since the parties had not expressly committed the issue to the arbitrator in their Representation Agreement. Id. at *2. The court then concluded that Triplefine's claim was not arbitrable because it did "not concern or arise out of the agreement containing the arbitration clause, but rather, it concern[ed] and ar[ose] out of separate, if related, court proceedings." Id.

3. The April 11, 2002 Order Staying the October 17, 2001 Injunction

On reconsideration, the district court refused to vacate its injunction, but granted Triplefine's request for a stay until this appeal was decided or an arbitral award was entered, whichever occurred earlier. Shaw Group Inc. v. Triplefine Int'l Corp., No. 01 Civ. 4273, 2002 WL 553733, at *1 (S.D.N.Y. filed Apr. 12, 2002).

II. Discussion

We review de novo the district court's conclusion that it rather than an arbitrator should decide the arbitrability of Triplefine's claim for attorneys' fees and costs. See Bell v. Cendant Corp., 293 F.3d 563, 565-66 (2d Cir.2002) (and cases cited therein).

A. Arbitrability

The arbitration clause at issue in this case is found at section III, paragraph 15, of the parties' Representation Agreement, which provides as follows:

15. All disputes between you [Triplefine] and us [Stone & Webster2] concerning or arising out of this Agreement shall be referred to arbitration to the International Chamber of Commerce, New York, New York, in accordance with the rules and procedures of International Arbitration. This Agreement and the rights and obligations of the parties shall be construed in accordance with and governed by the laws of New York.

Because this provision is part of a contract affecting interstate and international commerce, it is governed by the Federal Arbitration Act ("FAA"). See 9 U.S.C. §§ 1, 2 (1999); Allied-Bruce Terminix Companies v. Dobson, 513 U.S. 265, 273-81, 115 S.Ct. 834, 130 L.Ed.2d 753 (1995); Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); PaineWebber Inc. v. Bybyk, 81 F.3d 1193, 1198 (2d Cir.1996). Pursuant to the FAA, the role of courts is "limited to determining two issues: i) whether a valid agreement or obligation to arbitrate exists, and ii) whether one party to the agreement has failed, neglected or refused to arbitrate." PaineWebber Inc. v. Bybyk, 81 F.3d at 1198.

In addressing these issues, courts are mindful that "arbitration is a matter of contract," AT & T Technologies, Inc. v. Communications Workers of America, 475 U.S. 643, 648, 106...

To continue reading

Request your trial
263 cases
  • Republic of Ecuador v. Chevrontexaco Corp., 04 Civ. 8378(LBS).
    • United States
    • U.S. District Court — Southern District of New York
    • June 27, 2005
    ...courts generally ... should apply ordinary state-law principles that govern the formation of contracts." Shaw Group, Inc. v. Triplefine Int'l Corp., 322 F.3d 115, (2d Cir.2003), in turn cited Bell and First Options for the proposition that "[w]hether parties have obligated themselves to arb......
  • Patrowicz v. Transamerica Homefirst, Inc.
    • United States
    • U.S. District Court — District of Connecticut
    • March 2, 2005
    ...defenses, but instead would leave those issues, at least in the first instance, to the arbitrator. See Shaw Group Inc. v. Triplefine Intern. Corp., 322 F.3d 115, 120 (2d Cir.2003) ("Pursuant to the FAA, the role of courts is `limited to determining two issues: i) whether a valid agreement o......
  • Motorola Credit Corp. v. Uzan
    • United States
    • U.S. District Court — Southern District of New York
    • July 31, 2003
    ...e.g., First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 945, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995); Shaw Group Inc. v. Triplefine Intern. Corp., 322 F.3d 115, 120 (2d Cir.2003). With this bedrock principle in mind, the Court now addresses whether, in the absence of the RICO claims, a......
  • Orange County Choppers v. Olaes Enterprises
    • United States
    • U.S. District Court — Southern District of New York
    • July 27, 2007
    ...LaSalle Bank Nat'l Ass'n v. Nomura Asset Capital Corp., 424 F.3d 195, 206 (2d Cir.2005) (quoting Shaw Group, Inc. v. Triplefine Int'l Corp., 322 F.3d 115, 121 (2d Cir. 2003)); Faulkner v. Nat'l Geographic Soc'y, 452 F.Supp.2d 369, 375 (S.D.N.Y. 2006) (quoting Metro. Life Ins. Co. v. RJR Nab......
  • Request a trial to view additional results
1 firm's commentaries
  • GLI International Arbitration First Edition - April 2015
    • United States
    • Mondaq United States
    • May 5, 2015
    ...853 F.2d 59, 64 (2d Cir. 1988). Shaw Grp., Inc. v. Triplefi ne Int'l Corp., 2003 WL 22077332, at [*PIN] (S.D.N.Y. Sept. 8, 2003), aff'd 322 F.3d 115 (2d. Cir. 2003) (confi rming an arbitrator's award of attorneys' fees because the contract provided for arbitration under the ICC Rules, which......
3 books & journal articles
  • Table of Cases
    • United States
    • ABA Antitrust Library Antitrust Handbook for Franchise and Distribution Practitioners
    • January 1, 2008
    ...1988), 164, 165 Shaeffer v. Collins, No. 80-2797, 1980 WL 1965 (E.D. Pa. Dec. 9, 1980), 141 Shaw Group v. Triplefine Int’l Corp., 322 F.3d 115 (2d Cir. 2003), 37 Shreve Equip. v. Clay Equip. Corp., 650 F.2d 101 (6th Cir. 1981), 76 Siegel v. Chicken Delight, Inc., 448 F.2d 43 (9th Cir. 1971)......
  • The Antitrust Laws: An Overview
    • United States
    • ABA Antitrust Library Antitrust Handbook for Franchise and Distribution Practitioners
    • January 1, 2008
    ...for decades. 205 202. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002). 203. See, e.g. , Shaw Group v. Triplefine Int’l Corp., 322 F.3d 115, 122-24 (2d Cir. 2003) (holding that when parties explicitly incorporate rules that authorize an arbitrator to decide issues of arbitrabili......
  • Rationalizing costs in investment treaty arbitration.
    • United States
    • Washington University Law Review Vol. 88 No. 4, May 2011
    • May 1, 2011
    ...the provisions therein relating to the determination and allocation of costs."); see also Shaw Group Inc. v. Triplefine Int'l Corp., 322 F.3d 115, 120, 122 (2d Cir. 2003) (holding arbitrability of attorney's fees and costs must be decided by an arbitrator, because the parties agreed that "[......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT