IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

CARL ZEISS VISION, INC.

 Plaintiff,

 v.

REFAC HOLDINGS, INC. and

U.S. VISION, INC.,

 Defendants.

REFAC HOLDINGS, INC. and

U.S. VISION, INC.,

 Counterclaim Plaintiffs,

 v.

CARL ZEISS VISION, INC.,

 Counterclaim Defendant.

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 C.A. No. 11513-VCS

MEMORANDUM OPINION

Date Submitted: June 14, 2017

Date Decided: August 24, 2017

Gregory E. Stuhlman, Esquire of Greenberg Traurig, LLP, Wilmington, Delaware

and Jeff E. Scott, Esquire and Valerie W. Ho, Esquire of Greenberg Traurig, LLP, 

Los Angeles, California, Attorneys for Plaintiff and Counterclaim Defendant.

William R. Denney, Esquire, Brian C. Ralston, Esquire, Andrew H. Sauder, Esquire 

and Jordan A. Braunsberg, Esquire of Potter Anderson & Corroon LLP and Jon M. 

Talotta, Esquire of Hogan Lovells US LLP, McLean, Virginia, Attorneys for 

Defendants and Counterclaim Plaintiffs.

SLIGHTS, Vice Chancellor 
1

Delaware courts do not take lightly applications to vacate arbitration awards.

Indeed, the standard of judicial review with respect to such applications is among 

“the narrowest . . . in all of American jurisprudence.”1 Acknowledging the nearly 

vertical mountain it must climb, Defendants/Counterclaim Plaintiffs, REFAC 

Holdings, Inc. and U.S. Vision, Inc. (collectively “USV”), nevertheless move the 

Court to vacate an arbitration award that construed a supply agreement between USV 

and Plaintiff/Counterclaim Defendant, Carl Zeiss Vision, Inc. (“Zeiss”), in a manner 

that supported Zeiss’ claim that USV had wrongfully terminated the agreement. 

According to USV, the arbitration panel “eviscerate[d] the essential term” of the 

agreement sua sponte and then “permit[ted] the agreement to remain in effect after 

gutting that term.”2 This grave error, according to USV, was the product of an 

arbitration panel that “abdicated its duties” and thereby “acted outside the scope of 

its authority.”3

USV’s motion would have the court turn the applicable standard of review on 

its head. Indeed, although it has not expressly advocated for de novo review, the 

tone of its motion suggests that the Court should construe the terms of the operative 

 

1 SPX Corp. v. Garda USA, Inc., 94 A.3d 745, 750 (Del. 2014).

2 Opening Br. in Supp. of Defs. and Countercl. Pls.’ Mot. to Vacate Arbitral Award 

(“Opening Br.”) 1. 

3

Id. 
2

contract anew without any regard for the fact that a carefully selected, experienced 

arbitration panel has already undertaken that exercise. In two words, USV seeks a 

“do over.” That relief is rarely justified. It is not justified here. The motion to 

vacate is DENIED. 

I. BACKGROUND

The parties have submitted rather extensive exhibits from the arbitration 

proceeding, including sworn testimony. I have drawn the facts from that record to 

the extent necessary to determine whether the arbitration award “can be rationally 

derived” from the contract the arbitrators were asked to construe and otherwise from 

the evidence.4

 

4 Brennan v. CIGNA Corp., F. App’x 132, 136–37 (3d Cir. 2008) (If “an arbitration award 

rationally can be derived from either the agreement of the parties or the parties' submission 

to the arbitrator, it will be enforced.”). I note that the procedural posture of the motion sub 

judice is not entirely clear. The motion is styled as a “Motion to Vacate Arbitral Award.” 

It does not purport to invoke any of this Court’s rules of procedure as the means by which 

USV seeks this case dispositive relief. Cf. Beebe Med. Ctr., Inc. v. InSight Health Servs. 

Corp., 751 A.2d 426, 431 (Del. Ch. 1999) (observing that the filing of cross motions for 

summary judgment is the “common [method] for this court to determine whether to vacate 

or confirm an arbitration award.”). As noted, the parties have submitted extensive record 

evidence. If I had determined that material factual disputes were revealed in that record, 

the murky procedural context might confound the analysis here. Since I have found that 

no such material disputes of fact exist, I am satisfied that I may finally adjudicate this 

motion as styled rather than kick the can down the road in search of more procedural clarity. 
3

A. The Parties

Zeiss manufacturers ophthalmic lenses used in eyeglasses. USV operates as 

a retailer of ophthalmic products in the United States. Zeiss has supplied ophthalmic 

lenses to USV for the past 16 years.

B. The 2011 Supply Agreement

The contract at the heart of the parties’ dispute is the Amended and Restated 

Supply Agreement dated December 28, 2011 (the “Agreement”). Pursuant to the 

Agreement, USV committed to purchase 95% of its lenses from Zeiss, subject to 

certain identified conditions. In exchange, Zeiss committed to supply the lenses 

ordered by USV and to extend $20 million of unsecured financing to USV at belowmarket interest. The term of the Agreement is ten years. It is governed by Delaware 

law and requires the parties to submit disputes relating to the Agreement to binding 

arbitration. 

The conditions to USV’s purchase obligation are set forth in Paragraph 3.2(a) 

of the Agreement. Specifically, USV need only purchase 95% of its lenses from 

Zeiss if: (1) Zeiss makes the products required by USV in the quantities USV 

requires; (2) Zeiss’s products comply with industry quality standards; and (3) “CZV 
4

[Zeiss] offers USV competitive pricing with respect to the CZV Lenses.”5 

Paragraph 3.5 confirms that the purchase prices of Zeiss lenses are set forth on an 

exhibit attached to the Agreement and that “the purchase price to be charged USVRefac for the various CZV Lenses. . . shall be no higher than the prices charged by 

CZV to any other customer making an equivalent volume of purchases of CZV 

Lenses.”

6

 The parties have referred to this as a “most favored nation” or “MFN” 

provision. 

The present dispute arises under the “competitive pricing” provision in 

Section 3.2(a)(ii). USV maintains that it may avoid the 95% purchase requirement 

in the Agreement if it is able to obtain more competitive (i.e., better) pricing from 

another lens supplier. Zeiss interprets the competitive pricing provision as allowing 

USV to purchase its lenses elsewhere only if Zeiss does not provide pricing to USV 

that is competitive with what it offers other similarly situated customers, as further 

addressed in the Agreement’s MFN provision. 

 

5 Transmittal Aff. of Gregory E. Stuhlman in Supp. of Pl. and Countercl. Def. Carl Zeiss 

Vision, Inc.’s Opp’n to Defs. and Countercl. Pls.’ Mot. to Vacate Arbitral Award Ex. 55 

(“Agreement”) ¶ 3.2(a). Zeiss is referred to in the Agreement as CZV. 

6 Agreement ¶ 3.5.
5

C. The Arbitration

USV filed a Demand for Arbitration with the American Arbitration 

Association on August 28, 2015 (the “Demand”).

7

 The Demand sought a declaration 

that the Agreement (specifically Paragraph 3.2(a)(ii)) authorized USV to engage in 

price checks of the market to determine if Zeiss was offering competitive prices and, 

if not, to purchase some or all of its lenses from the suppliers offering the best price. 

USV identified in its Demand that one of Zeiss’s biggest competitors, Essilor

Laboratories of America (“Essilor”), was, in fact, able to offer more competitive 

pricing than Zeiss and it alleged that it was therefore entitled to purchase lenses from 

Essilor under the Agreement.8

A panel of three arbitrators (the “Panel”) was selected as called for in the 

Agreement. As the parties moved closer to the arbitration hearing, the Panel asked 

USV to state definitively the relief it would be seeking at the hearing. USV 

responded by expanding, or refining, the relief it was seeking to include declarations 

that: (1) when it compared Zeiss’s pricing with that of other manufacturers it could 

do so on a “portfolio” or “product line” basis; (2) if USV buys lenses from another 

 

7 Transmittal Aff. of Andrew H. Sauder in Supp. of Opening Br. in Supp. of Defs. and 

Countercl. Pls.’ Mot. to Vacate Arbitral Award (“Sauder Transmittal Aff.”) Ex. F. 

8 After filing its Demand, USV began to purchase lenses from Essilor. This prompted Zeiss 

to initiate an action in this Court for, inter alia, injunctive relief. The parties ultimately 

agreed to stay the litigation in this Court in favor of arbitration. 
6

supplier offering lower prices, USV would have ten days to notify Zeiss when that 

supplier’s prices increase; (3) if Zeiss offers to lower its pricing after USV moves to 

another supplier in order to return to “competitive pricing,” then USV will have three 

months to transition its purchasing back to Zeiss; (4) the pricing for Essilor’s product 

portfolio is more competitive than the pricing for Zeiss’s product portfolio; (5) the 

pricing of certain Essilor products is more competitive than the pricing of certain 

Zeiss products; and (6) USV could purchase any amount of lenses from Essilor until 

Zeiss matches Essilor’s pricing. Importantly, USV did not seek rescission of the 

Agreement or damages for breach of contract. 

The hearing lasted seven days. As one would expect after a seven-day 

hearing, the evidentiary record was extensive. The parties offered closing arguments 

at the conclusion of the hearing and, in doing so, addressed the specific questions 

posed to them by the Panel. By agreement, the parties then submitted post-hearing 

briefs. It was in this submission that USV argued for the first time that the 

Agreement should be rescinded if the Panel concluded that the competitive pricing 

provision was ambiguous.9 Zeiss objected. Among other grounds, it stressed that 

the Agreement could not be rescinded because USV had already taken and spent 

 

9 USV’s request for rescission at the close of the arbitration hearing is curious given the 

extensive extrinsic evidence that both parties developed and then presented to the panel 

during the hearing to assist in the construction of the Agreement should the panel find the 

Agreement was ambiguous. 
7

most the $20 million that it had loaned to USV as consideration for the Agreement. 

USV responded to Zeiss’s objection and the issue was joined for decision by the 

Panel along with USV’s other claims for relief.

The Panel issued its unanimous decision denying all of USV’s requested relief 

on July 14, 2016. With respect to USV’s request for a declaration relating to its 

interpretation of the competitive pricing provision, the Panel found that while “USV 

intended that the provisions set forth market check language,” “the evidence is 

undisputed that Labeeuw [a USV negotiator of the Agreement] never intended, or 

understood, that the new language was market check language, and there is no 

evidence (other than by implication from the execution of the [Agreement] by Zeiss) 

that anyone employed by Zeiss, or representing Zeiss, intended or understood before 

the [Agreement] was executed that the [competitive pricing] provisions set forth 

market check language.”10 The Panel also determined that “even if one were to 

conclude Zeiss accepted USV’s proposed language, that does not indicate any 

agreement by Zeiss or, for that matter, USV, to any mechanism for implementation 

of any market check right. This is only illustrative of the absence of terms supporting 

the forms of relief requested by USV.”11 

 

10 Sauder Transmittal Aff. Ex. M (“Award”) 6. 

11 Id. 
8

After completing its construction of the relevant language in the Agreement, 

the Panel concluded that USV was not authorized by the Agreement to engage in a 

market check to determine if Zeiss was offering competitive pricing. It further 

concluded, under the Uniform Commercial Code (“UCC”) and Delaware case law, 

that it had no reasonably certain basis to fashion an appropriate remedy if it were to 

agree that USV’s construction was reasonable since the Agreement was silent as to 

how a market check would work under the MFN clause.12 It expressly declined to 

“rewrite” the parties’ Agreement.13 

The Panel then addressed USV’s belated request for rescission. After 

acknowledging USV’s argument that it “would not have entered into the 

[Agreement] ‘unless it could exclude lenses that were not competitively priced,” the 

Panel determined that USV had failed to cite any evidence in support of this 

statement and noted that the Panel’s own assessment of the evidence found no 

support for this position either.

14

D. Procedural Posture

This matter first came to the Court on Zeiss’s Verified Complaint for Specific 

Performance, filed on September 16, 2015, in which Zeiss sought an order declaring 

 

12 Id. at 7.

13 Id. at 6–7. 

14 Id. at 8.
9

that the Agreement precluded USV from purchasing lenses from Zeiss competitors, 

including Essilor. Zeiss sought a temporary restraining order to that same effect. 

On October 26, 2016, the parties stipulated that this action should be stayed in favor 

of arbitration that would address the “merits of their dispute relating to the [] 

Agreement.”15 The arbitration hearing was held May 18–26, 2016. The Panel issued 

its award on July 14, 2016. USV filed its Motion to Vacate Arbitral Award on 

October 12, 2016. 

USV argues that the Panel “abdicated its duties and ignored basic tenets of 

UCC law by declaring the Competitive Pricing Exceptions [in the Agreement] 

unenforceable and then compounded the problems it created by refusing to terminate 

the contract as the UCC requires.”16 According to USV, the Panel “refused to 

interpret” the Agreement as requested by the parties and, instead, resolved issues 

that it raised sua sponte at the conclusion of the arbitration hearing.17 By proceeding 

in this manner, the Panel “acted outside the scope of its authority, [] issued an award 

that did not resolve the disputes submitted to arbitration, [] manifestly disregarded 

governing law, [] gutted USV’s bargained-for contractual protections, and [] 

 

15 Stipulation (DI 36).

16 Opening Br. 2.

17 Id. 
10

ultimately decided the parties’ disputes based on the Panel members’ own 

idiosyncratic views of justice.”18

Zeiss, of course, emphasizes the extraordinarily narrow standard of review 

within which the Court must operate––a standard that USV has not come close to 

meeting here. It also challenges USV’s characterization of the Panel’s award. 

According to Zeiss, USV asked the Panel to declare that the Agreement allowed 

USV to seek out competitively priced lenses in the marketplace and to acquire such 

lenses if Zeiss did not match the pricing. The Panel considered USV’s proffered 

construction of the Agreement in this regard and rejected it. Accordingly, 

dissatisfied with the Panel’s award, USV cannot now be heard to argue that the Panel 

somehow acted outside of the scope of its authority when it decided precisely what 

USV asked it to decide. 

II. ANALYSIS

Although the parties have cited to both Delaware and federal authority with 

respect to the standard of review, they appear to agree that the Federal Arbitration 

Act (“FAA”) applies here.19 This consensus regarding the standard of review is well 

placed given that the Agreement does not expressly reference the Delaware Uniform 

 

18 Id. at 2–3.

19 9 U.S.C. §§ 1–16. 
11

Arbitration Act (“DUAA”) or otherwise reflect the parties’ “desire to have [the 

DUAA] apply to their agreement.”20 With regard to the appropriate deference to 

which an arbitrator’s award is entitled, however, the decision to apply the FAA over 

the DUAA (or vice versa) is of limited moment since precedential decisions applying 

both statutes require reviewing courts to give practically the highest degree of 

deference, short of “untouchable,”21 recognized in the law to an arbitrator’s award.22 

Indeed, to overturn an award, the court must be satisfied that “there [is] absolutely 

no support at all in the record justifying the arbitrator’s determinations.”23 

 

20 10 Del. C. §§ 5702(a)(c) (unless the parties expressly agree that the DUAA shall apply 

to their agreement any motions to vacate or enforce an arbitrator’s award shall be decided 

“in conformity with the [FAA]”). 

21 As any trial judge will attest, the “untouchable” standard of review does not exist.

22 Compare SPX Corp. v. Garda USA, Inc., 94 A.3d 745, 750 (Del. 2014) (noting the 

DUAA “tracks” the FAA with regard to standard of review and further observing that the 

“review of an arbitration award is one of the narrowest standards of judicial review in all 

of American jurisprudence”); Brentwood Med. Assocs. v. United Mine Workers of Am., 

396 F.3d 237, 241 (3d Cir. 2005) (“There is a strong preference under the [FAA] in favor 

of enforcing arbitration awards.”); Hamilton Park Health Care Ctr. Ltd. v. 1199 SEIU 

United Healthcare Workers, 817 F.3d 857, 861 (3d Cir. 2016) (noting that arbitration 

awards must be reviewed under an “extremely deferential standard, the application of 

which is generally to affirm easily the arbitration award”). 

23 United Transp. Union Local 1589 v. Suburban Transit Corp., 51 F.3d 376, 379 (3d Cir. 

1995). 
12

When considering “whether the arbitrator exceeded its authority,” the court 

must “resolve all doubts in favor of the arbitrator.”24 “Even if the arbitrator did not 

state the grounds for a grant or denial of relief, the grant or denial of relief will be 

deemed to be within the scope of the arbitrator’s authority [i]f grounds for the award 

can be inferred from the facts of the case.”25 This court will not “pass an independent 

judgment on the evidence or applicable law,” and “[i]f any grounds for the award 

can be inferred from the facts on the record, the Court must presume that the 

arbitrator did not exceed his authority and the award must be upheld.”26

A. The Award does not Disregard Controlling Law

USV contends that the Panel disregarded controlling law when it determined 

that the Supply Agreement was enforceable even after it struck, or at least refused 

to enforce, an essential term of the contract (the competitive pricing provision). To 

demonstrate that an arbitral award was rendered in disregard of the law such that the 

award should be vacated, the party seeking to vacate the award must demonstrate 

 

24 TD Ameritrade, Inc. v. McLaughlin, Piven, Vogel Sec., Inc., 953 A.2d 726, 732 (Del. Ch. 

2008).

25 World-Win Mktg., Inc. v. Ganley Mgmt. Co., 2009 WL 2534874 (Del. Ch. Aug. 18, 2009) 

(internal quotation marks omitted).

26 TD Ameritrade, 953 A.2d at 733 (citation omitted) (emphasis added). See also 

Neuronetics, Inc. v. Fuzzi, 552 F. App’x 134, 135 (3dCir. 2014) (“We will vacate an award 

only under the exceedingly narrow circumstances listed in 9 U.S.C. § 10(a) or to correct a 

manifest disregard of the law.”) (citations omitted) 
13

that “the arbitrator (1) knew of the relevant legal principle, (2) appreciated that this 

principle controlled the outcome of the disputed issue, and (3) nonetheless willfully 

flouted the governing law by refusing to apply it.”27 This showing must be 

“something beyond and different from a mere error in the law or failure on the part 

of the arbitrators to understand or apply the law.”28 USV has not come close to 

meeting this burden. 

The Panel concluded that the competitive pricing language in the Agreement

could not reasonably be construed on its face to allow USV to stop buying lenses 

from Zeiss if it found better pricing elsewhere.29 In reviewing the plain language of 

the Agreement, the Panel reasonably found that the phrase “competitive pricing with 

respect to the CZV Lenses” in Paragraph 3.2(a)(ii) could be a reference to the MFN 

pricing structure described in Paragraph 3.5 (pricing competitive with Zeiss’s other 

customers), as Zeiss argued, or the phrase could mean competitive pricing as 

 

27 Paul Green Sch. Of Rock Music Franchising, LLC v. Smith, 389 F. App’x 172, 177 (3d 

Cir. 2010).

28 TD Ameritrade, 953 A.2d at 732–33. See also RBC Capital Mkts. Corp. v. Thomas 

Weisel P’rs, LLC, 2010 WL 681669, at *8 (Del. Ch. Feb. 25, 2010) (“as long as [an honest] 

arbitrator is even arguably construing or applying the contract and acting within the scope 

of his authority,’ the fact that ‘a court is convinced he committed serious error does not 

suffice to overturn his decision.” (alteration in original)). 

29 Award 5, Ex. A (“taking into consideration the MFN provisions of section 3.5, the Panel 

finds the CP provisions ambiguous, and susceptible of different meanings, regarding 

whether these provisions set forth market check language.”).
14

compared to other lens manufacturers, as USV argued.30 Because the parties elected 

to leave the phrase “competitive pricing” undefined, the Panel did its best to construe 

the term first by reference to the language within the four corners of the Agreement, 

and then, when that analysis did not yield a clear construction, by reference to 

extrinsic evidence.31 This hardly reveals that the Panel “flouted the governing law”; 

indeed, the analysis was entirely consistent with settled Delaware law in the area of 

 

30

 Specifically, the Panel determined:

As previously set forth, the language of the CP [competitive pricing] 

provisions was never negotiated between the parties. Other than its 

appearance in the final draft of the SA [supply agreement], there is no 

evidence the language was addressed between the parties before execution 

of the SA, either in any conversation, or in any writing. The course of dealing 

between the parties after execution of the SA also provides no guidance, as 

the CP provisions were never acted on or invoked until years later when the 

Essilor offer was presented to Zeiss. Other than the language of the CP 

provisions, and that Zeiss rejected the previous language that would permit 

US to continually shop Zeiss prices for any Zeiss lenses, there is no evidence 

that provides guidance as to the meaning, or intent, or operation of the CP 

provisions. 

Award, at 6–7.

31 As the Panel observed, Paragraph 3.2(a)(ii) of the Agreement states “competitive pricing 

with respect to the CZV Lenses”; it does not state “competitive pricing with respect to the 

lens market” or “competitive pricing with respect to other lens manufacturers,” all 

language that actually appeared in prior drafts of the Agreement that Zeiss rejected. 

Agreement ¶ 3.2(a)(ii). When the parties referred to competitive pricing elsewhere in the 

Agreement, they always took care to identify precisely what prices will be compared. See 

id. at ¶ 5.2(a) (. . . to timely accommodate USV’s customer orders at prices competitive 

with other available wholesale optical laboratories.”); ¶ 5.2(b) (“. . . to timely accommodate 

USV’s customer orders at prices that are relatively competitive with (but not necessarily 

the lowest price available) other available wholesale optical laboratories.”). In this regard, 

the term “competitive pricing” in Paragraph 3.2(a)(ii) stands alone in its failure to provide 

context and for that reason alone, as the Panel determined, the term is ambiguous. 
15

contract construction.32 As the party seeking declaratory relief, USV had the burden 

to prove that Section 3.2(a)(ii) meant what USV claims it meant.33 USV did not 

meet its burden. Consequently, the Panel did not adopt USV’s proposed 

interpretation. 

Having determined that USV’s proffered construction of the Agreement was 

not reasonable, the Panel was under no obligation to declare the entire agreement 

unenforceable. According to USV, the Panel’s refusal to accept USV’s proffered 

construction of the competitive pricing language left the Supply Agreement without 

an essential “quantity” term. I note that USV raised this argument to the Panel for 

the first time after the hearing had concluded. Notwithstanding that the argument is 

of post-hearing vintage, and therefore arguably not properly joined in the arbitration 

proceedings, USV’s attempt to assail the Panel’s treatment of this argument fails in 

any event because it misconstrues the Panel’s decision and applicable Delaware 

law.34 

 

32 Paul Green Sch. Of Rock Music Franchising, 389 F. App’x at 177. See also GMG 

Capital Invs., LLC v. Athenian Venture P’rs I, L.P., 36 A.3d 776, 783 (Del. 2012) 

(“[W]here reasonable minds could differ as to the contract’s meaning, a factual dispute 

results and the fact-finder must consider admissible extrinsic evidence.”)

33 Zimmerman v. Crothall, 62 A.3d 676, 691 (Del. Ch. 2013); Lillis v. AT&T Corp., 2008 

WL 2811153, at *4 (Del. Ch. July 21, 2008).

34 USV’s demand for rescission was likely received with some surprise given that USV had 

already received and likely spent the $20 million loan that Zeiss had extended to it (on 

highly favorable terms) in connection with, and as partial consideration for, the Agreement. 

See Stenta v. Gen. Motors Corp., 2009 WL 1509299, at *10 (Del. Super. May 29, 2009), 
16

In essence, what USV asked the Panel to do after the hearing was to rescind 

the Agreement.35 Yet it can hardly be said that the Panel “flouted the applicable 

law” when it concluded that USV did not meet its burden of demonstrating that the

“extreme remedy” of rescission was appropriate here.36 Specifically, as the Panel 

observed, USV “cite[d] no evidence” to support its claim that the competitive pricing 

term was material to its decision to enter into the Agreement and “the Panel finds 

the evidence does not so prove.”37 Indeed, looking beyond the competitive pricing 

language, the Panel was reasonable in its perception that Paragraph 3.2(a) still 

 

aff’d, 7 A.3d 485 (Del. 2010) (rejecting rescission claim where the circumstances present 

at the time the claim was adjudicated made it “impossible for the Court to ‘unscramble the 

eggs’”).

35 Opening Br. 14 (“The Panel was clearly aware of the relevant principals at issue under 

the UCC, but improperly refused to apply them to invalidate the whole agreement when it 

invalidated an essential element of the quantity term, the Competitive Pricing 

Exceptions.”).

36 Liberto v. Bensinger, 1999 WL 1313662, at *5 (Del. Ch. Dec. 28, 1999) (noting that the 

court must have a “high degree of confidence” in the propriety of imposing the “extreme 

remedy” of rescission). See also Neuronetics, Inc., 552 F. App’x at 135 (“We will vacate 

an award only under the exceedingly narrow circumstances listed in 9 U.S.C. § 10(a) or to 

correct a manifest disregard of the law.”).

37 Award, at 8 (emphasis added). See Home Ins. Co. v. Honaker, 1983 WL 102619, at *1 

(Del. Ch. Nov. 2, 1983) (holding that a party’s unilateral mistake as to the meaning of a 

term of the contract will justify rescission only when the term is material); Asten, Inc. v. 

Wangner Sys. Corp., 1999 WL 803965, at *4 (Del. Ch. Sept. 23, 1999) (same). See also 

Hildreth v. Castle Dental Ctrs., Inc., 939 A.2d 1281, 1283–84 (Del. 2007) (stating that 

under Delaware law, “[a]n invalid term of an otherwise valid contract, if severable, will 

not defeat the contract”); Tracey v. Franklin, 67 A.2d 56, 61 (Del. 1949) (stating that under 

Delaware law, “[w]hether or not the terms of a contract are severable is purely a question 

of the intent of the parties”).
17

adequately addresses pricing in that it contains a definite quantity term that provides

a formula for determining USV’s purchase obligations: Paragraph 3.2(a) provides 

that Zeiss “shall be the preferred supplier of ophthalmic lenses”; “USV-Refac shall 

order from [Zeiss] substantially all of the ophthalmic lenses required by USV” to the 

extent that Zeiss makes the lenses and they comply with industry quality standards;

and “substantially all of the ophthalmic lenses required by USC-Refac shall mean at 

least 95% of the aggregate number of all ophthalmic lenses sold by USV-Refac in 

connection with its sale of ophthalmic eyeglasses through the USV Stores during 

any consecutive 3-month period of the Term.”38 Under these circumstances, there 

is no basis to conclude that the Panel manifestly disregarded the applicable law when 

it declined USV’s eleventh-hour invitation to rescind the Agreement.39

 

38 Agreement, at ¶ 3.2(a); Award at 8. 

39 Contrary to USV’s position here, the UCC does not dictate a different result. As USV 

points out, “UCC Section 2-204 ‘reflects the common law principle that a meeting of the 

minds on all essential contract terms is critical for contractual formation.’” Opening Br. 

14 (citing Hardwire, LLC v. Zero Int’l, Inc., 2014 WL 5144610, at *9 (D. Del. Oct. 14, 

2014)). And, to be sure, “quantity” is an essential term. See 2 E. Farnsworth, Farnsworth 

on Contracts § 6.7, at 141 (2d ed. 1990) (noting that the UCC “significantly relaxes the 

requirement that the memorandum state all the essential terms by insisting only that it state 

the quantity of goods”). But, as noted, the Panel did not commit manifest error in 

determining that, even without the competitive pricing provision, the Agreement still more 

than adequately addressed the quantity of lenses USV was to purchase. There was no 

essential term missing here even after the Panel declined to construe the competitive 

pricing provision according to USV’s construction of that term. 
18

B. The Award was not Irrational

An arbitrator “subjects his award to judicial vacatur under [FAA] § 10(a)(4) 

when he decides an issue not submitted to him, grants relief in a form that cannot be 

rationally derived from the parties’ agreements and submissions, or issues an award 

that is so completely irrational that it lacks support altogether. . . . [W]hen the 

arbitrator ‘strays from interpretation and application of the agreement’ and 

effectively ‘dispenses his own brand of industrial justice’ he exceeds his powers and 

his award will be unenforceable.’”40 USV argues that the Panel abdicated its 

responsibility to interpret the Agreement and instead “dispensed [its] own brand of 

industrial justice” by finding that the competitive pricing provision was 

unenforceable and, more importantly, by improperly refusing to find that the entire 

Agreement was unenforceable based on the failure of the competitive pricing 

provision. This argument is simply a recycling of the argument that the Panel 

ignored controlling law. As before, I reject it as an unfounded characterization of 

the Panel’s decision and an unsupported interpretation of Delaware law. 

C. The Panel Addressed All Issues it was Asked to Decide

USV maintains that “[t]he Panel’s decision that ‘the [competitive pricing]

provisions lack[ed] sufficient definiteness, specificity, and mechanisms to be 

 

40 Sutter v. Oxford Health Plans LLC, 675 F.3d 215, 219–20 (3d Cir. 2012), as amended 

(Apr. 4, 2012), aff’d, 133 S. Ct. 2064 (2013).
19

enforceable by declaratory relief’ (Award, p. 7) resulted in an imperfect execution 

of the Panel’s powers such that ‘a mutual, final, and definite award upon the subject 

was not made.’”41 According to USV, the Panel neglected to determine whether the 

competitive pricing provision could be enforceable by an action for damages (as 

opposed to the claim for declaratory relief that USV actually brought) and “whether 

the Competitive Pricing Exceptions related to the prices of comparable ophthalmic 

lenses offered by other lens suppliers (as USV argued), or whether they were simply 

a re-iteration of the MFN clause of Section 3.5 (as [Zeiss] argued).”42 A review of 

the Award reveals that the Panel decided every issue that was submitted by USV and 

denied USV’s requests for declaratory relief. 

As an initial matter, it cannot be ignored that neither party submitted a breach 

of contract claim to the Panel. The claims were plainly limited to prayers for 

declaratory relief. Moreover, the fact that a breach of contract claim will not lie with 

USV’s proffered construction of the Agreement is implicit in the Panel’s Award. 

The Panel determined that the competitive pricing provision was not enforceable as 

 

41 Opening Br. 25 (citing 9 U.S.C. § 10(a)(1)(4), Certain Underwriters at Lloyd’s London 

et al. v. BCS Ins. Co., 239 F. Supp.2d 812, 816 (N.D. Ill. 2003)). Title 9 of the U.S. Code, 

Section 10(a)(1)(4) provides that an arbitration award may be vacated “where the 

arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final, and 

definite award upon the subject matter submitted was not made.” 

42 Opening Br. 26.
20

drafted. Any breach of contract claim that USV might pursue based on an alleged 

breach of the competitive pricing provision, therefore, would not be viable. 

The same analysis applies to USV’s argument that the Panel did not decide 

whether the competitive pricing provision referred to the MFN pricing provision in 

Section 3.5 of the Agreement. USV did not seek a decision from the Panel on that 

issue. Its argument that the Panel should now be faulted for not deciding the issue, 

therefore, is, at best, impertinent. 

The Panel’s Award was “mutual” and “final” in that it “resolved the entire dispute 

(to the extent arbitrable) that had been submitted to them.”43 USV’s argument to the 

contrary is unfounded. 

III. CONCLUSION

USV has failed to state any grounds that justify the extraordinary relief of 

vacating an arbitration award. Its Motion to Vacate Arbitral Award, therefore, must 

be DENIED. The parties shall confer and submit a proposed final order addressing 

the Motion to Vacate and the final disposition of this case within ten (10) days.

 

43 IDS Life Ins. Co. v. Royal Alliance Assoc., Inc., 266 F.3d 645, 650 (7th Cir. 2001).