Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_10-cv-01001/USCOURTS-casd-3_10-cv-01001-2/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 29:206 Collect Unpaid Wages

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

MEDIVAS, LLC, a California limited

liability company, et. al.

 

Plaintiffs,

CASE NO. 10-CV-1001 W (RBB)

(Consolidated w/ Case No. 11CV2852)

ORDER (1) GRANTING

PETITION TO CONFIRM

ARBITRATION AWARDS AND

(2) DENYING CROSS PETITION

TO VACATE AWARDS

v.

MARUBENI CORP., and DOES 1

through 100, 

Defendants.

Pending before the Court is Defendant Marubeni Corporation’s petition to

confirm the arbitration awards, and Plaintiff MediVas, LLC’s cross-petition to vacate

the awards. The Court decides the matters on the papers submitted and without oral

argument pursuant to Civil Local Rule 7.1(d.1). For the reasons stated below, the

Court GRANTS Marubeni’s petition to confirm and DENIES MediVas’ cross-petition

to vacate.

1

The petition and cross petition were filed in Case No. 11cv2852. However, because

1

the orders compelling arbitration were entered in this case, on March 10, 2014 this Court

ordered the two cases consolidated, with this case to serve as the lead case. (See Consolidation

Order [Doc. 59], 3:3–8.) The parties then filed their supporting and opposing memorandum

of points and authorities in this case.

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I. BACKGROUND

A. Factual history.

The following factual history is taken from the February 28, 2011 order granting

in part and denying in part Defendant Marubeni’s motion to compel arbitration, and

denying Plaintiffs’ motion to remand (the “Arbitration Order” [Doc. 23]).

Defendant Marubeni is a Japanese multinational corporation. Plaintiff MediVas

is a biomedical company. Plaintiffs Kenneth W. Carpenter, Joseph D. Dowling,

William G. Turnell, Sachio Okamura, T. Knox Bell, Dari Darabbeigi, Lindy Hartig,

William Summer, and Paul Teirstein (collectively, the “Individual Plaintiffs”) are

managers, employees, and investors of MediVas.2

On April 13, 2004, MediVas and Marubeni entered into an unsecured

Convertible Note Purchase Agreement (the “Note Purchase Agreement”), whereby

Marubeni agreed to make advances to MediVas of up to $5 million. In exchange,

MediVas agreed to make quarterly interest payments, and to pay the principal on the

note’s maturity date. The agreement contains an arbitration provision providing:

All disputes and differences which may arise out of or in connection with

this Agreement, or the breach thereof . . . shall be submitted to arbitration

under the commercial arbitration rules of the International Chamber of

Commerce (the “ICC”) for final and binding arbitration.

(Note Purchase Agreement [Doc. 67-2], ¶ 10.14. ) In addition to the Note Purchase 3

Agreement, the parties entered into an Agency Agreement, whereby MediVas

appointed Marubeni as its exclusive agent in Japan. The Agency Agreement also

contains an arbitration provision. (See Agency Agreement [Doc. 67-3], ¶ 9.2)

By June 2004, MediVas borrowed the entire $5 million from Marubeni. From

April 2004 to June 2007, MediVas made all quarterly interest payments. However, at

On August 2, 2011, the Individual Plaintiffs’ claims were remanded to the San Diego 2

Superior Court. (See Supplemental Arbitration Order [Doc. 37], 13:13–17.)

The Note Purchase Agreement and Agency Agreement are attached as Exhibits B and 3

C, respectively, to Marubeni’s points and authorities in support of the petition [Doc 67].

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some point in 2007, MediVas began experiencing cash flow shortages and liquidity

problems. By July 2007, when the principal became due, MediVas could no longer pay

its daily operating expenses. 

As a way to deal with its financial hardship, MediVas began merger discussions

with Nastech Pharmaceutical Company, Inc. By September 2007, MediVas and

Nastech drafted an Agreement and Plan of Merger, but Nastech requested the consent

of MediVas’ lenders. Marubeni refused and threatened to pursue legal action. In order

to obtain Marubeni’s consent, on October 10, 2007, MediVas and Marubeni entered

into three additional contracts: a Forbearance Agreement, a Security Agreement, and

an Intellectual Property Security Agreement (“IP Security Agreement”). 

4

Under the Forbearance Agreement, Marubeni agreed not to exercise any

remedies available under the Note Purchase Agreement and promissory note as a result

of MediVas’ failure to pay the outstanding principal. (Forbearance Agree., ¶ 1.) 

However, the agreement specified that“[s]uch forbearance does not apply to any other

Event of Default . . . or other failure by Borrower to perform in accordance with the

Loan Documents and the Security Documents . . . .” (Id., ¶ 2. )

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In exchange for Marubeni’s agreement to forbear from exercising its remedies,

MediVas agreed to limit its ability to issue equity, and granted Marubeni “a first priority

security interest in all of [MediVas’] assets.” (Forbearance Agree., ¶ 4.) The Security

Agreement, therefore, grants Marubeni “a continuing security interest in and to all

right, title, and interest” in MediVas’ collateral. (Security Agree., ¶ 2.1.) The IP

Security Agreement grants Marubeni a security interest in all of its “intellectual

property, copyrights, patents, patent applications, trademark, know-how, trade secrets,

and related goodwill.” (IP Security Agree., p.1)

The Forbearance Agreement, Security Agreement and IP Security Agreement were

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attached to MediVas’ motion to remand as Exhibits 3, 4 and 5, respectively. (See Pls.’ Notice

of Lodgement in Support of Remand Mt. [Doc. 7-4].) 

“Loan Documents” means the Note Purchase Agreement and the Note. (See 5

Forbearance Agree., ¶ A.)

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Unlike the 2004 agreements, none of the 2007 agreements include an arbitration

provision. However, the Security Agreement contains a “Venue and Jurisdiction”

clause (hereinafter, “venue provision”) providing, in relevant part:

Venue and Jurisdiction. Grantor and Lender agree that the state and

federal courts located in San Diego, California (the “San Diego Courts”),

will have exclusive jurisdiction to hear and determine any dispute, claim

or controversy between or among them concerning the interpretation or

enforcement of this Agreement, or any other matter arising out of or

relating to this Agreement.

(Security Agreement, ¶ 6.14.) The term “Agreement” is defined under section 1.3 as

“this Security Agreement, as amended from time to time.” (Id., ¶ 1.3.) 

 Despite executing the 2007 agreements, the Nastech merger failed. MediVas

alleges the failure was caused by Marubeni’s refusal to timely consent to the merger.

In March 2008, MediVas entered into discussions with DSM Biomedical

Materials B.V. (“DSM”) forthe acquisition of MediVas for between $100-$130 million. 

MediVas alleges that the Forbearance Agreement, Security Agreement and IP Security

Agreement caused the negotiations to degrade into discussions about a license

agreement. MediVas also contends that Marubeni’s refusal to consent to the license

agreement, and its insistence on certain conditions, led DSM to reduce the license from

$8 million to $7 million. 

B. MediVas sues Marubeni.

On April 28, 2010, MediVas filed this action in the San Diego County Superior

Court. The Complaint alleges eight state-based causes of action for: (1) Avoidance of

Illegal Contracts; (2) Breach of Contract - Note Purchase Agreement; (3) Breach of

Contract - Agency Agreement; (4) Fraudulent Conveyance / Avoidable Transfer;

(5) Intentional Interference with Prospective Economic Advantage - Nastech Merger;

(6) Intentional Interferencewith Prospective Economic Advantage - DSM Acquisition;

(7) Declaratory Relief - Note Purchase, Agency, Forbearance, and Security

Agreements; and (8) Declaratory Relief - Incentive Notes. 

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On May 10, 2010, Marubeni removed the lawsuit to the United States District

Court for the Southern District of California. Marubeni then filed a motion to compel

arbitration under the Convention on the Recognition and Enforcement of Foreign

Arbitral Awards (the “New York Convention”), 9 U.S.C. §§ 203–205, and to stay the

litigation. MediVas filed a motion to remand. 

In opposing Marubeni’s motion, MediVas argued that the 2007 Security

Agreement’s venue provision superseded the 2004 Note Purchase Agreement’s

arbitration provision. (MediVas Opp. To Mt. To Compel Arb. [Doc. 10], 10:5–8.) And

because MediVas was convinced that the arbitration provision was superseded,

MediVas asserted that all of its causes of action had the same factual genesis, “whether

arising under the 2004 Agency Agreements or the 2007 Forbearance Agreements, and

whether sounding in contract or in tort. . . .” (Id., 12:3–6.) 

On or about June 1, 2010, the case was reassigned to this Court. (See Low

Number Rule Transfer Order [Doc. 8].) Then on February 28, 2011, this Court issued

an order granting Marubeni’s motion to compel arbitration, and denying the motion to

remand as to MediVas. (See Arbitration Order.) In granting Marubeni’s motion, the

order rejected MediVas’ argument that the venue provision superseded and replaced

the arbitration provision. (Id., 6:1–8:6, 10:14–23.) And because MediVas asserted that

all of its causes of action were related and had the same factual genesis, the Court

ordered all of MediVas’ claims to arbitration. (Id., 10:14–23. )

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On March 22, 2011, Plaintiffs filed an ex parte application seeking leave to file

a motion for reconsideration. The Court granted the application with respect to the

Arbitration Order’s finding that all of MediVas’ claims were subject to arbitration

because of the Ninth Circuit’s decision in Polimaster LTD. v. RAE Systmes, Inc., 623

F.3d 832 (9th Cir. 2010), which was decided after the parties’ motions were filed. This

Court interpreted Polimaster as requiring an evaluation of whether each of MediVas’

The Arbitration Order also found that the Individual Plaintiffs were not bound by 6

the arbitration agreement. (Arbitration Order, 10:25–11:19.) 

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causes of action was subject to the arbitration provision. However, the order informed

the parties that the Court was not reconsidering its finding that the arbitration

provision was valid and binding on the parties. (Order Granting Ex Parte [Doc. 32],

3:8–13.) On June 7, 2011, MediVas filed the motion for reconsideration. 

On August 2, 2011, this Court issued an order compelling arbitration as to the

majority of MediVas’ claims, but denying arbitration as to the following:

(1) Avoidance of Illegal Contract (1st Cause of Action) with respect to the

Forbearance Agreement, Intellectual Property Security Agreement, and

Security Agreement;

(2) Declaratory Relief (7th Cause of Action) with respect to the Forbearance

Agreement, Intellectual Property Security Agreement, and Security

Agreement; and

(3) Declaratory Relief - Incentive notes (8th Cause of Action).

(Supplemental Arbitration Order [Doc. 37], 8:9–13:2, 14:7–16.)

On November 25, 2011, the Arbitral Tribunal issued a partial award on the

merits in favor of Marubeni (the “Initial Award”). Then on January 27, 2012, the

Arbitral Tribunal issued a Final Award after ruling on cost and fee issues. Marubeni’s

petition to confirm, and MediVas’ cross-petition to vacate followed.

II. STANDARD

The grounds for vacating an arbitration award under the New York Convention

are set forth in Article V, 21 U.S.T. 2517. See 9 U.S.C. § 207. Under Article V,

section 1, a court may refuse to confirm an award where the party against whom the

award was made “furnishes . . . proof that:”

(a) The parties to the agreement . . . were, under the law applicable to

them, under some incapacity, or the said agreement is not valid

under the law to which the parties have subjected it or, failing any

indication thereon, under the law of the country where the award

was made; or

(b) the party against whom the award is invoked was not given proper

notice of the appointment of the arbitrator or the arbitration

proceedings or was otherwise unable to present his case; or

(c) The award deals with a difference not contemplated by or not

falling within the terms of the submission to arbitration, or it

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contains decisions on matters beyond the scope of the submission

to arbitration, provided that, if the decisions on matters submitted

to arbitration can be separated from those not so submitted, that

part of the award which contains decisions on matters submitted to

arbitration may be recognized and enforced; or

(d) The composition of the arbitral authority or the arbitral procedure

was not in accordance with the agreement of the parties, or, failing

such agreement, was not in accordance with the law of the country

where the arbitration took place; or

(e) The award has not yet become binding on the parties, or has been

set aside or suspended by a competent authority of the country in

which, or under the law of which, that award was made.

21 U.S.T. 2517, Art. V, §§ 1(a)–(e). Additionally, confirmation of an award may be

refused where “recognition or enforcement of the award would be contrary to the public

policy” of the country where confirmation is sought. Id., Art. V, § 2(b). 

“In a case governed by the Convention, ‘the party opposing enforcement of an

arbitral award has the burden to prove that one of the seven defenses under the New

York Convention applies.” Zeiler v. Deitsch, 500 F.3d 157, 164 (2d Cir. 2007) (citation

omitted). The “burden is substantial because the public policy in favor of international

arbitration is strong, [citation omitted] and the New York Convention defenses are

interpreted narrowly.” Polimaster, Ltd. v. RAE Systems, Inc., 623 F.3d 832, 836 (9th

Cir. 2010); Zeiler, 500 F.3d at 836 (stating that the burden for opposing confirmation

is a “heavy one, as the showing required to avoid summary confirmance is high.”). 

Accordingly, MediVas bears the substantial burden of establishing that one of the

defenses set forth in Article V applies. 

 

III. DISCUSSION

MediVas argues that the awards should be vacated under each of the grounds

listed in Article V, sections 1 and 2(b). For the following reasons, the Court disagrees.

//

//

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A. MediVas’ arguments premised on the theory that the Security

Agreement amended or voided the arbitration provision lack merit.

MediVas argues that the awards should be vacated because: (1) the awards deal

with disputes outside the terms of submission; (2) the subject matter is not capable of

settlement by arbitration under United States law; (3) the awards are invalid under

controlling federal and state law; (4) the arbitration was inconsistent with the parties’

agreement; and (5) recognition of the awards would be contrary to public policy. 

(MediVas Combined Opp. And P&A [Doc. 70], 25:1–36:16.) Although MediVas cites

five different grounds for vacating the award, each is based on the same underlying

premise: the 2007 Security Agreement’s venue provision rescinded and replaced the

2004 Note Purchase Agreement’s arbitration provision. (Id.) Because the Court

disagrees with MediVas’ underlying premise, MediVas has failed to satisfy its burden of

demonstrating that any of the five stated grounds justify vacating the awards.

The terms of the 2004 and 2007 agreements establish that the venue provision

did not rescind or replace the arbitration provision. As explained more fully in the

Arbitration Order, in entering into the 2004 Note Purchase Agreement, the parties set

forth requirements for amending its terms. Paragraph 10.1 provides that the Note

Purchase Agreement “may be amended or supplemented only by a writing that refers

explicitly to this Agreement, . . . and expressly states that it is an amendment to the

terms hereof.” (Note Purchase Agree., ¶ 10.1.) Accordingly, in order to limit, rescind

or otherwise amend the agreement’s arbitration provision,the 2007 Security Agreement

(or one of the other 2007 agreements) must contain language that refers to the

arbitration provision and “expressly states” that it is an amendment to that provision. 

No such language exists in any of the 2007 agreements.

The absence of language in any of the 2007 agreements amending the arbitration

provision is also significant because the parties followed paragraph 10.1’s requirement

in drafting the 2007 Forbearance Agreement. Specifically, paragraph 7 of the

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ForbearanceAgreement, which is entitled “Amendment of Note Purchase Agreement,”

expressly states that it is amending paragraph 8.1(a) of the Note Purchase Agreement: 

 

Paragraph 8.1(a) of the Note Purchase Agreement is amended to read: [¶]

“(a) Issuance of Equity. The Borrower shall not issue any equity of the

Borrower or any other securities convertible into equity of the Borrower

in excess of 20,000,000 Unite without the priorwritten consent of Lender.

. . . 

(Forbearance Agree., ¶ 7.) Thus, paragraph 7 confirms that where the parties sought to

amend a provision in the 2004 agreement, the parties followed paragraph 10.1’s

requirement of explicitly referring to the Note Purchase Agreement and identifying the

provision amended.

MediVas, nevertheless, argues that Applied Energetics, Incorporated v. Newoak

Capital Markets, LLC, 645 F.3d 522 (2d Cir. 2011), “published mere days before this

Court’s August 2011 [Supplemental Arbitration] Order, is on all fours with this

dispute” and establishes that the venue provision superseded the arbitration provision. 

(MediVas Combined Opp. and P&A, 25:17–18, 30:1–6.) MediVas is wrong.

In Applied Energetics, the parties included an arbitration clause in an

Engagement Agreement, which the Second Circuit described as a “preliminary letter

agreement.” Id. 645 F. 3d at 523. The letter agreement“specifically contemplated that

the parties would enter into a subsequent, more formal agreement setting forth ‘the

terms and conditions contained [in the Engagement Agreement] as well as those

customarily contained in agreements of such character.’” Id. 645 F. 3d at 523.

The parties’ subsequent “more formal agreement,” entitled Placement

Agreement, “though embodying much of the substance of the Engagement Agreement,

omitted any reference to arbitration. Instead, the Placement Agreement expressly

provided that the agreement would be governed by New York law” and that any dispute

would be adjudicated in New York. Id. 645 F. 3d at 523. Additionally, the Placement

Agreement contained a merger clause stating that it, and certain other related

documents (which did not include the Engagement Agreement) “constitute the entire

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understanding and agreement between the parties” and that “there are no [other]

agreements or understanding that apply.” Id. at 523–524. 

When a subsequent dispute arose, one of the parties attempted to enforce the

arbitration clause in the Engagement Agreement. The Second Circuit found the

arbitration clause was revoked by the forum-selection clause in the “more formal”

Placement Agreement because the two clauses stood in direct conflict with each other: 

 

Here, the Placement Agreement’s language that “[a]ny dispute” between

the parties “shall be adjudicated” by specified courts stands in direct

conflict with the Engagement Agreement’s parallel language that “any

dispute . . . shall be resolved through binding arbitration.” Both provisions

are all-inclusive, both are mandatory, and neither admits the possibility of

the other.

Id. 645 F. 3d at 525. In addition, the Second Circuit reasoned that the omission of the

Engagement Agreement from the Placement Agreement’s merger clause cleared “the

path for the [forum-selection] clause to displace the Engagement Agreement’s

arbitration clause.” Id. at 526 n. 2.

Contrary to MediVas’ argument, Applied Energetics is not“on all fours” with this

case. First, the arbitration provision at issue in Applied Energetics was included in the

parties’ “preliminary letter agreement” that “specifically contemplated that the parties

would enter into a subsequent, more formal agreement.” Id. at 645 F.3d at 523. In

contrast, here, neither party has ever asserted that the Note Purchase Agreement was

a preliminary agreement that would be replaced by a subsequent, more formal

agreement. To the contrary, the Note Purchase Agreement constitutes a formal, 25-

page contract specifying the parties’ rights and obligations in relation to Marubeni’s $5

million loan to MediVas. And, as discussed above, the Note Purchase Agreement

specifically limited the ability of the parties to amend its terms by requiring compliance

with paragraph 10.1.

Second, and as explained in this Court’s previous orders, unlike the conflicting

provisions at issue in Applied Energetics, here, the arbitration clause and venue clause 

are not in direct conflict. The arbitration provision applies to disputes that may “arise

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out of or in connection with” the Note Purchase Agreement. (Note Purchase Agree.,

¶ 10.14.) In contrast, the venue provision is limited to “any dispute, claim or

controversy between or among [the parties] concerning the interpretation or

enforcement of this Agreement, or any other matter arising out of or relating to this

Agreement.” (Plt’s NOL, Ex. 4 at ¶ 6.14.) The term “Agreement” is defined as “this

Security Agreement, as amended from time to time.” (Id., ¶ 1.3) Thus, the arbitration

provision covers disputes arising out of or in connection with the 2004 Note Purchase

Agreement, while the venue provision covers disputes relating to the 2007 Security

Agreement.

Finally, in Applied Energetics, the Second Circuit’s finding was supported by the

Placement Agreement’s merger clause because it did not incorporate the Engagement

Agreement’s terms and, therefore, did not incorporate the arbitration provision. Id. at

524 (emphasis in original). In contrast, here, the 2007 Forbearance Agreement’s

merger clause specifically includes the Note Purchase Agreement: 

 

This Agreement, the Security Documents and the Loan Documents contain

the entire agreement of the parties hereto and supersede any other oral or

written agreement or understandings.

(Forbearance Agree. [Doc. 7-4], ¶ 11.b (emphasis added).) The “Loan Documents” are

defined as the 2004 Note Purchase Agreement and Promissory Note. (Id., ¶ A.) Thus,

unlike Applied Energetics, the merger clause in the subsequent agreements confirms

that the parties remain bound by the 2004 Note Purchase Agreement’s unamended

provisions, which as explained above includes the arbitration clause.

For all of these reasons, MediVas’ arguments that are premised on the theory that

the 2007 venue provision replaced or rescinded the 2004 arbitration provision lack

merit.

//

//

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B. MediVas has failed to identify any facts or evidence supporting the

contention that it was incapacitated.

MediVas also argues that the awards should be vacated because it was

incapacitated. Under Article V, section 1(a), the term “incapacity” refers to when the

agreement to arbitrate was made. Polytek Eng’g Co., Ltd. v. Jacobson Cos., 984 F.

Supp. 1238, 1242 (D. Minn. 1997) (the “challenging party must prove . . . it was under

an incapacity at the time the agreement was made”). 

Here, MediVas cites no facts and has provided no evidence suggesting that it was

under some incapacity when the 2004 Note Purchase Agreement was entered. 

Accordingly, MediVas has failed to establish that the awards should be vacated under

this ground.

C. The record does not support MediVas’ claim that it was unable to

present its case to the Arbitral Tribunal. 

MediVas argues that it was unable to present its case to the Arbitral Tribunal

because the arbitration proceeded while this Court was still considering the threshold

issue of arbitral jurisdiction. MediVas, therefore, contends that it was faced with a

“classic Catch-22” because if it participated in the arbitration, “it would waive its

contractual right to trial in the San Diego Courts,” but if it did not participate,

“Marubeni would pay the arbitrators to carry out an ex parte arbitration.” (MediVas

Combined Opp. And P&A, 22:7–10.) The problem with MediVas’ argument is that it

not only lacks evidentiary support, but the record confirms that MediVas actively

participated in the arbitration proceedings until the Arbitral Tribunal—like this

Court—ruled against MediVas on the jurisdictional issue. Additionally, the record

demonstrates that MediVas never intended to present its case to Arbitral Tribunal. 

The New York Convention has been interpreted to “essentially sanction[] the

application of the forum state’s standards of due process. . . .” Iran Aircraft Industries

v. Avco Corp., 980 F.2d 141, 145 (2d Cir. 1992) (citation omitted). A fundamental

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requirement of due process is “the opportunity to be heard ‘at a meaningful time and

in a meaningful manner.’” Id. at 146 (citation omitted). Thus, a court may refuse to

confirm an arbitration award under the New York Convention because one of the

parties “was unable to present its case to the Tribunal.” Id. at 145.

In support of its argument, MediVas suggests that it did not participate in the

arbitration proceedings and, instead, “protested” that the proceedings must await this

Court’s resolution of the jurisdictional issue:

 

MediVas vigorously protested throughout, objecting that any hearing as

to the merits of the dispute must await this Court’s decision on the

threshold issue of arbitral jurisdiction, which remained pending before this

Court from June 21, 2010, until August 2, 2011.

(MediVas Combined Opp. And P&A, 24:1–4 (emphasis in original.) But the record

before the Court contradicts MediVas’ contention that (1) it did not participate in the

arbitration proceedings and (2) it urged the Arbitral Tribunal to await this Court’s

decision. Instead, the record establishes that MediVas actively participated and

encouraged the arbitrators to resolve the jurisdictional issue. 

For example, on August 23, 2010, MediVas submitted a 9-page letter brief to the

Arbitral Tribunal arguing that the venue provision governed. (J. Davis Dec. [Doc. 19-

2], Ex. B at 57–65. ) In addition, MediVas specifically stated that the arbitrators must 7

decide the jurisdictional issue: 

 

We therefore assert that under the circumstances of this matter the very

first order of business of the Tribunal clearly should be to address the

merits of MediVas’ objection that there is no arbitral jurisdiction over

disputes between MediVas and Marubeni, and no applicable arbitration

agreement governing Marubeni’s claim. This is a preliminary,

foundational issue that, if decided correctly, will dispose of this spurious

proceeding. To defer the jurisdiction issue would only put the parties and

the Tribunal itself to further needless delay, effort and cost. No

Marubeni did not follow the same pagination scheme throughout Exhibit B. Some 7

pages are referred to with a page number (i.e., 52) while other pages are numbered with an

“Exhibit” number and “Page” number.

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alternative to immediate determination of the jurisdictional objection can

be justified.

(Id., at 59 (emphasis in original).) MediVas then ended the brief by urging the

“Tribunal to take account of” certain expenses MediVas had incurred “in [the

Tribunal’s] decision or award terminating Marubeni’s abusive proceeding for lack of

jurisdiction.” (Id., at 65.) Additionally, while asserting that it was not “participat[ing]

in the instant ICC proceedings,” MediVas nevertheless “invited” the Arbitral Tribunal

to “address any question you may have to us.” (Id.)

Another example is MediVas’ September 17, 2010 letter brief to the tribunal.

There, MediVas stated that “we see nothing in the ICC Rules suggesting that the

tribunal should defer the requested ruling on MediVas’ jurisdictional objection under

Article 6.” (J. Davis Dec., Ex. B at “Exhibit 5 Page 17.”) 

A final example is MediVas’ January 11, 2011 nine-page reply to Marubeni’s

letter brief. (J. Davis Dec., Ex. A at 162–170.) There, MediVas concluded by stating:

“Thank you once again for your attention to this matter. On behalf of MediVas, we

look forward to receiving your ruling.” (Id., at 170 (emphasis added).) 

Contrary to MediVas’ argument, these letters establish that MediVas actively

participated in the Arbitral Tribunal’s consideration of the jurisdictional issue. 

Additionally, the letters contradict MediVas’ suggestion that it urged the arbitrators to

await this Court’s resolution of the jurisdictional issue.

MediVas’ argument is also not persuasive for another reason. As Marubeni

points out, this Court’s Supplemental Arbitration Order was issued on August 2, 2011. 

At that time, the Arbitral Tribunal had not issued an award, and would not issue the

Initial Award for nearly three months or the Final Award for almost six months. Yet,

despite having participated in the arbitrator’s consideration of the jurisdictional issue,

and despite having been told twice by this Court that the majority of its claims were

subject to arbitration, MediVas did nothing after the Supplemental Arbitration Order

was issued to attempt to “present its case.” For example, there is no evidence that after

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August 2, 2011, MediVas requested that the Arbitral Tribunal allow additional briefing

or allow MediVas an opportunity to submit evidence regarding the merits of its claims.

In fact, the record confirms that MediVas never intended to participate in the

Arbitral Tribunal’s consideration of the merits, regardless of this Court’s rulings. In its

June 9, 2010 letter to the arbitrators, MediVas reiterated its “repeated” statements that

it would not submit any disputes to arbitration:

Since oursurprise receipt of notice of Marubeni’s sham arbitration request,

we have repeatedly advised the ICC that our client will not submit any

disputes – including any disputes over arbitration – to the ICC, because

MediVas has a binding agreement with Marubeni to submit all disputes

exclusively to the San Diego Courts. Marubeni has violated and tried to

evade that agreement; we will not do so. 

(J. Davis Dec., Ex. B at 2 (emphasis added).) Notably, there is no indication in the

letter that MediVas’“repeated” statement was contingent on this Court’s ruling on the

jurisdictional issue. 

Moreover, afterreceiving this Court’s SupplementalArbitration Order, MediVas

sent another letter to the Arbitral Tribunal confirming that it would not participate in

the arbitration and, instead, would await its opportunity to appeal the order: 

MediVas considers the remaining portions of Judge Whelan’s August 2

order to be inconsistent with settled federal and state law, all of which we

have previously briefed for the Tribunal. However, under federal law, an

order compelling arbitration is not appealable at this time. Therefore, we

will appealJudge Whelan’s decision as to MediVas’remaining claims when

the August 2, order becomes appealable.

In the meantime, we consider any and all of the Tribunal’s (and

Marubeni’s) activities in this matter to be void and extra-legal. Under

controlling federal authority, including Polimaster, Ltd. v. RAE Systems,

Inc., 623 F.3d 832 (9th Cir. 2010), any award the ICC renders in excess

of its jurisdiction is unenforceable, and any judgment thereon will be

vacated in due course. Therefore, as previously explained on many

occasions, we can not and will not participate in any way.

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(J. Davis Dec., Ex. B at “Exhibit 13, page 46” (emphasis added).) The concluding

language belies MediVas’ contention that it intended to participate in the arbitration.8

As the party challenging the Arbitral Tribunal’s awards, MediVas bears the

burden of establishing that it was unable to present its case to the arbitrators. MediVas

has failed to do so. To the contrary, its letter briefs to the Arbitral Tribunal

demonstrate that (1) it actively participated and encouraged the tribunal’s

consideration of the jurisdictional issue, and (2) had no intention of participating in the

tribunal’s consideration of the merits of the claims. For these reasons, the Court finds

MediVas’ contention that it was unable to present its case without merit.

 

IV. CONCLUSION & ORDER

For the reasons stated above, the Court GRANTS Marubeni’s petition to

confirm the arbitration awards and DENIES MediVas’ cross-petition to vacate. Upon

entry of the order, the Clerk of the Court shall close the District Court case file in this

case, and the Consolidated Case, 11cv2852.

IT IS SO ORDERED.

DATE: June 4, 2014

Hon. Thomas J. Whelan

United States District Judge

MediVas’ reference to Polimaster is also significant. Polimaster did not involve a

8

party’s inability to present its case to an arbitral tribunal, but instead held that arbitration

agreements must be enforced according to the parties’ intent. Id., 623 F.3d at 841. Thus,

MediVas’ reference to Polimaster indicates that MediVas’ considered the “Tribunal’s (and

Marubeni’s) activities ... void and extra legal” because of MediVas’ contention that the parties

intended to rescind the arbitration clause, and not because it could not present its case to the

arbitrators.

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