certainly thank you very much thank you to both counsel for well presented argument for take the twenty nine ninety twenty nine ninety one twenty nine ninety two i think there's others after that miss cohen is goldman company ation referred to the statutory liquidator in the liquidated companies as legion i will be addressing all of the issues on appeal except for the issue of sanctions were ordered against pepper ha convention for we get there i take it you don't appear to still be disputing the subject matter jurisdiction of the district court or used appeared now to be saying that the right of remove opener to a five was way  we have opted out of the convention which they are by result that in the elimination of the removal provision we do not contest that the district court had jurisdiction to consider whether or not the was removed honor to a five the argument that caused the court obviously some heartburn was that the argument that the court didn't have jurisdiction and it looks to me like the briefing on this is now saying the there was a waiver of the right removal in effect yes your honor in the sense that the parties had this is the way that this piece comes to this point is fairly court seeking review of the arbitration of one of the award under the pennsylvania uniform arbitration that was the agreement of the parties legion never went into federal court there is no federal jurisdiction through procedures right well if it is rules and procedures your honor when you go to the pennsylvania uniform arbitration act which is referenced what that yes soup to nuts it provides for a system a state system for arbitration inter both in terms of the initiation the conduct and post award review including specifically vacate your standards so we gen was and with it together with syndicate fifty there i think it was i recall any controversy should be under state law and that's where i was had had the hang up but here is doesn't say any controversy it just says arbitration went to the federal district court in the first instance on diversity of jurisdiction and sought review under the fired federal arbitration act so the context in which the court was considering the issue and roadway was when you have an architecture of the federal arbitration can you opt out for a portion because you were going to only be waiving are opting out in that particular the whole thing the hear it's just rules and procedures well i think again rules and procedures you have to go to the pennsylvania from arbitration itself because the use of the word rules is to apply to the entire subchapter in the p you ed it is clearly intending to adopt the entire subchapter because number one the words used in the arbitration act that the the language that you're citing to you in the contract says that you shall  arbitration shall be the chorus again i keep them obviously my hang up here with you is rules and procedures that's not it's not a clear intent that you want to do anything beyond that well i disagree if you actually look at the pennsylvania uniform because the rule then what does the term rules and procedures and had if it's not really a limitation that is only rules the procedure well i don't think that there is anything the rules and procedures established by could be deleted here they add nothing it is consistent with your position it could reach all be in accordance with the uniform of attrition it isn't interpret in contract well is that the way we find clear and well i do think it is clear intent your honor because i think the question is that the way we go about finding well usually you want to look at the text i mean having drafted a lot of these things if you want what you want to do you would you graph that differently in hindsight i realize you were but i mean looking forward what made you think that system which is the pennsylvania uniform arbitration you are necessarily displacing or ousting the federal arbitration because if you were required mandatorily to get some help here considering the convention what is it two of five gives this street court's jurisdiction and when we get to that which we have been words that there it is and it is just simply a way of illustrating what is the intention of the party and with respect to your question about whether you can trump the section two of five i think that the answer to five right karim move because there is now a clear preference for a federal or yes now if not the question i put to you is that were it was a motion to compel can be no waiver of a right to remove under the convention act that would in the absence of iraq in the absence of clear and unambiguous language requiring such a waiver the convention of the policy choices the pointed you to is that clear and on embed in big u s language but we also have to look at souter from another angle which is subsequent to suit a suit or another issue was presented to the for foreign international contracts and what has been what was referred to in the court below as this international public policy that in the cases that that public policy doesn't have the same weight as the circumstances that are presented here which is where you have a u s arbitration which is awarded and enforced in the with a public policy strain it is different when you are confronted with a situation when you have an award from country which is being enforced in country big but that is not the same where it may well be that because of the the facts of this case as opposed to the roadway that there was that that the standard might be considered to be that's because there's not the same policy consideration and i just want you my time is up so i do want to just leave with one point which is there is no case which says that you cannot opt out of the convention and it is our belief that the words expressed good afternoon your honour's and nancy gellman for pepper hamilton with respect to the rule eleven ash can i just ask the question at the outset on the amount you could use to play to the s around ok it was stipulated so that the matter could be yes normally there is a row supervisory rule that we have that you need to have brought before the court a motion for sanctions prior to judgment and the court having act but when you look at the reason for that is so you don't have duplicative appeals separate panels looking at the same stuff a you don't have that here at all it's all before us and b when you look at the gary case in effect what gary did even though it parroted the words what it actually did was remand is you're on your honor we we can see this is the court supervisory role too and ministers the court sees that it was happenstance that the appeals happen to be before the same panel we didn't know how long the judge would take to rule on this matter of law ye erroneous view was that there was no basis in the existing law for the position to assert that there was no watch it was doing what it didn't what he say is you know the thing that is front and center has to  you never cited two hundred five you cited vault and roadway which didn't talk about jurisdiction barely discussed two or three and i think in another context and i don't think he  found you don't have to find bad faith obviously and i don't think he guesses he did it here at all but it was just so below the standards that he expected here that he was upset be below the standards in terms of what made and on the rule eleven i'm not arguing whether the port should verse or not reverse the the issue on removal jurisdiction i'm arguing as to whether or not simply one rule eleven this was an argument that was well founded on existing law and that it was not it was a plausible view of the law it's an argument that the removal jurisdiction was a soley on the section two hundred five of the consequence of opting out of the federal arbitration act is you no longer have the jurists the removal jurisdiction provision of that act to support removal and you've selected in an act the pennsylvania uniform arbitration act which did not provide for removal jurisdiction under a federal question type basis and that was the argument was made to judge paul whether he accepted it or not it was an argument that was founded in existing law involved which says you are to enforce that this is a private arbitration among parties the fundamental principle of arbitration is to enforce the agreement the parties may the argument was these parties had it had selected a different arbitration regime the pennsylvania regime and wh caldwell did was he said well i have jurisdiction removal jurisdiction under the federal regime he looked at the say this is the arbitration regime which the parties did not select he didn't look at the arbitration regime which the parties argues they decided we have here is arbitrary and capricious i mean you know maybe in his shoes i wouldn't of wouldn't of entertain actions against you but what he was there was it just sort of got the impression that what he thought was this was a way of trying to string out litigation or whatever it might be but obviously he was upset well your honor i agree something cause to grant this but this court's review is abuse of discretion and the task under the couter the supreme court case for abuse of discretion is whether these sanctions were based on an erroneous view of the law and the view of the law that judge the district court applied was that there was no basis in existing law for this argument and there was a basis for this argument in the existing law that was cited involved that you apply the agreement that the parties then are going to you sad agreement roadway and haul that you can opt out of the federal arbitration act if you opt out of the federal arbitration act which was the only basis for removal cited in the removal petition then you have no basis for jurisdiction that is an argument that is based on existing law it is not frivolous it's not paid only without merit it's a plausible view of the law and rule eleven sanction shouldn't be imposed on a party simply because they are on the losing side of  motion this was an argument that was was based on existing cases cited to those who are just argument that i've made was set forth in the papers he rejected it but that doesn't mean that it's a basis for does look like the judge here was you know was careful in terms of on the second sanction issue that they cater did not enter any sanctions we have to look at each one separately and one when you deny rule eleven sanctions remember the rule as amended in one nine hundred ninety three doesn't riven require imposition of sanctions if there is a violation of rule so the part part of the  ruling that he made where he denied the rule eleven sanctions with respect to the motion to vacate and that was a well founded decision because as everyone agreed this underwriter be in crane had no recollection of anything that happened and all the theories of rescission that had been argued for were based either on a misrepresentation theory which required reliance or a contract theory whether expressed or implied it was based on there being a term added to the contract about the underwriting methods that were allegedly breach and he had no recollection so that their it was the judge was looking at something that the record supported making the argument about the lack of recollection and his denying you know sanctions there i think the courts need to look at rule eleven sanctions where they are granted much more carefully than when they were denied because these are scientists live and africa maybe you can help me  what did happen here what was before the judges to look ok we think there was a basis for the motion we made which is in effect that we had chosen to be a law be a law should agreement that selected a state arbitration regime and the consequence of that was you don't have jurisdiction for removal because that regime doesn't have jurisdiction that was the consequence of those cases and the reading of those cases whether they talk about jurisdiction or not they talk about arbitration and enforcing the agreement that the parties made and the agreement that was preserved argued to judge caldwell and this was a plausible view of the law was that those that are right to have the parties contract in force and the parties contract selected a regime that didn't support removing the reception therefore there is no removal jurisdiction fun of the court and whether there would be removeable jurisdiction under the federal regime is irrelevant for this argument because the federal regime wasn't the regime that the party selected and that was the argument and that was the reason that it was proper here not to that afternoon your honor i place the court my name is david ram counsel for the underwriting members of syndicate fifty three at lloyd in the one nine hundred ninety eight year of a count on the on the removal under two of five as a sort o not there's a federal forum i think clear and unequivocal means that you have to say any removal or other any vacant chair confirmation petition here will be held in state court as  matter of fact we had here in this particular contract was the exact opposite we had actually in two specific places in this contract the specific invocation of federal the federal court system first of all in the service of soup clause we have it specifically preserve my client's right to remove to federal court and additionally in article suppression clause in the contract its pacifically stated that if there was a dispute between the parties as to who the umpire should be that dispute would be resolved in the east in the federal court for the eastern district of pennsylvania in this situation where the parties were not diverse and there was no other basis for federal court jurisdiction other than the convention search i just would like you at the beginning of this argument to tell us what if you had your druthers what would you like chris court to way the court decided it an honorable engagement clause which relieves the panel following the strict rules of law said that the panel could look at this as an honorable was the reason and i don't think he is i don't think it focused on the difference between the p and the convention but rather he said that they had asserted a basis standards should apply analyze this arbitration award but that the question of whether or not there is federal court jurisdiction and what standards what there's all sorts you want you want to finish up that line you know i i don't i'm confused but i and i understand i understand what he said  i'm saying that you one could posit an arbitration clause which working backwards on the sanctions the key thing it would appear that was missed by the law firm here was a sight to souter and yet the clear thing that was missed by the district judge was a cite to souter so how can the program alton's failure to cite souter in its motion to egregiously bad why didn't this record deal with i think because the argument itself was that was that there was no jurisdiction in the first place which they argued somehow that domestic at baker standards you are still under the convention or you're still under the f a a it's because the f a a allows you to do that correct permitted to do that so their argument was in essence defeated by that portion of roadway and i don't think the judge was going to address the waiver if that wouldn't be the first time that litigants misread a case  that would be the first time to judges have misread cases correct but they never made that argument and they never argued that there was a waiver so how was the judge supposed to in his own mind think well maybe there was some argument other argument they could have made and if you take a look at souter and the clear not an unambiguous standard they weren't going to meet that anyway so here essentially suggesting that maybe the opposing confirmation some clearly confirmable away and and it's just being dragged out on the on the motion for jurisdiction actually the very first question i asked was how did we get as high as one hundred thousand and i guess obviously that's the pilate too but just for that for the sake of understanding there is a motion to respond to what the court you would think the court would deny what went into play here besides the the briefing the motion and the briefing on the motion was or argument there was not but there was there was also  i have to ask my colleague the answer i don't want to get it wrong answer it if you want me to ask i will i didn't go put those figures together i'm sorry your honor my understanding my colleagues to correct me if i mistake was there was several rounds of briefing on the motion to remand the motion to defer and then also the amount of time spent in briefing rule eleven on this issue ok so it was also about time ok i got it counsel this is john john of the survey again i was interested in your expression and your accept your comment that they have the right to initially bring the litigation in pennsylvania court but once we move to remain and the back to the federal court and we have a contract which specifically provides provides that we have to remove all rights i think that should have been accepted at that point but what is to prevent a solution all along these lines the convention applies the district court has jurisdiction jurisdiction but although it's going to be  federal court it will be applying the rules and regulations of the p u s ok i think that would be improper here for four three separate reasons you vacate your standards the entire arbitration article of this contract in article twelve deals only with the conduct of the arbitration it does not as does many other arbitration talk about what happens under under motions to to confirm it when you're talking about rules and procedures you're talking about seventy three out of six through seventy three able to opt out of the domestic f h they are standards there is not been a single case which allowed for opting out of the conventions make it your standards the purpose of the convention is different than the purpose of the domestic f a a pursuant to the shirt case it is unify the standards by which arbitration arbitral awards are enforced in the signatory countries and i don't think that's unified if you had fifty plus different standards here finally i think after all saint i do not think you can opt out of the domestic f a a standards at least in federal court i think the holding up all street is that sections ten and eleven of the domestic f a a those standards are exclusive legion has argued in their reply that that that holding is substance soon by the dicta in the case which provides for other avenues into court the question is how to harmonize those sixty eight minutes and i think the way that you do it at least in the context of the domestic f a q s is if you look at sections ten and eleven they are binding only on the federal court they do not say anything about what the standard should be in state court so i think after hall straight you are permitted if you say choose a state or to opt for different they get your standards if you have a domestic ethic case but not in federal you thank you all right if we want to accept all of that counsel how do we what do we do with the expression rules and procedures established by the p section seventy three a six through seventy three twelve and i think that that is is what the parties have put forward and have decided to apply the law is that you need to have a clear and unequivocal a clear and unequivocal out there now i think where you use the rule the language rules and procedures of the you know of the arbitration i think you cannot possibly say that that is an opt out of the vacant your standard it's not clear and it's not political the chapter two and what the guiding principle is as articulated in most cases is where the principle to be drawn out for most cases is if fully apocryphal then they are they may you may cross fertilize and in particular in chinaman metal the court said this principle whether the government is obligated to and force the private agreement of the parties is one such principle that  transcends both domestic and international cases and so that is why we were lying on full roadway all because in ruled we took the principle that it is a private contract to be enforced yours for one second the question of job search ok you say that you're going to apply the rules and procedures of the of the p us what does that mean and the rankin who said oh well when we were talking about the rules of procedure of the pennsylvania uniform arbitration act we're only talking about seven three zero six two seven three one two we don't get to those sections which are the big picture it could have said we are only accepting this portion of the p u a are not accepting the whole portion we said we are accepting the whole portion and that reference to rules and procedure rules is the word that is used in the introduction to the p u a they said that this is the the rules of or betray should so it's really belts and suspend the clearly  and the effect of that is to completely displace the the the f a a track to your knowledge is drafting today that wishes to have state law apply including without limitation all matters relating to rules procedures the ball the ball the ball above the book well there's no question you could make you can make this this language better or tighter but i think that all of us who have drafted  past we tend to be you know sort of crazy about how we draft that's why documents get so long it would seem that in light of this that's the way that one would drafted in order to do it especially in light of the particular case the parties clearly expressed their intent not just to have a choice of law using pennsylvania law but a separate it provides for the use of the pennsylvania arbitration act and i think that it would render surpasses the arbitration selection provision the rules and procedures if it was only intended as a choice of laws and i just would like to refer the court to a recent case out sky five seventy nine of them again third or fourth chair which is a case which did address the question of math and can choose the conclusion that there were no magic words and there could be you simply because the parties on the losing side of the motion and this is not that exceptional case are those exceptional circumstances that we're not arguing a position that's plainly contrary to controlling authority there's no case that says that legions position was incorrect that you can't select another regime other than the f a a for purposes of arbitration in fact you're going to affect your argument is look we may have gone down the wrong path no one questions that we did it in good faith and to some extent the wrong path that that was a wrong was that this the basic argument that's being made with regard to the merits here and and the court coming back you're saying but there are so many basic things that were missed and you're sure then come back and say yeah but you missed the most basic of which is that the the the the case that everybody seems to now say is on point well that i think what this argument is shown is that this is a complex area and that there isn't i think that rule eleven is a reserved for cases where there is controlling authority that you know is on point you it's we'll call you about ten minutes on the phone thank