Court Opinion

ID: 3000964
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:11:11.242239+00
Date Added: 2024-06-11T09:32:31.649962
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 06-3395
CERTAIN UNDERWRITERS AT
LLOYD’S LONDON,
                                               Petitioners-Appellees,
                                  v.

ARGONAUT INSURANCE COMPANY,
                                              Respondent-Appellant.
                          ____________
             Appeal from the United States District Court
        for the Northern District of Illinois, Eastern Division.
                No. 04 C 5852—Mark R. Filip, Judge.
                          ____________
    ARGUED JANUARY 19, 2007—DECIDED AUGUST 29, 2007
                          ____________

  Before RIPPLE, KANNE and SYKES, Circuit Judges.
   RIPPLE, Circuit Judge. Certain Underwriters at Lloyd’s
London (“Underwriters”) entered into a reinsurance
contract with Argonaut Insurance Company (“Argonaut”).
A dispute over coverage arose, and Argonaut demanded
arbitration in accordance with the contract. Further dis-
putes arose related to the arbitration, and Underwriters
filed a petition in the United States District Court for the
Northern District of Illinois under the Federal Arbitration
Act (“FAA”), 9 U.S.C. § 1, et seq. It sought an order confirm-
2                                                No. 06-3395

ing a panel of arbitrators. After preliminary proceedings,
the parties filed cross-motions for summary judgment. The
district court granted summary judgment for Underwriters
and thus confirmed the panel of arbitrators. Argonaut
timely appeals. For the reasons stated in this opinion,
we affirm the judgment of the district court.

                              I
                         BACKGROUND
A. Facts
  Underwriters, a reinsurance syndicate whose partici-
pants include citizens of the United Kingdom, entered
into certain reinsurance contracts, or “treaties,” with
Argonaut, a California-based insurer. The treaties contain
an arbitration provision as well as a further clause that
details the responsibilities of the parties in selecting the
arbitration panel. That clause provides, in pertinent part:
      If any dispute shall arise between the Company and
    the Underwriters with reference to the interpretation
    of this Agreement or their rights with respect to any
    transaction involved, this dispute shall be referred to
    three arbitrators, one to be chosen by each party and
    the third by the two so chosen. If either party refuses or
    neglects to appoint an arbitrator within thirty days
    after receipt of written notice from the other party
    requesting it to do so, the requesting party may nomi-
    nate two arbitrators, who shall choose the third.
R.1, Ex. 1 at Art. 15.
  Argonaut settled certain asbestos-related claims with one
of its insured parties, Western MacArthur. Argonaut
then made a claim for reimbursement from Underwriters
No. 06-3395                                             3

under the reinsurance treaties. Before processing the
claim, Underwriters sought additional information from
Argonaut and, in response, Argonaut sent an arbitration
demand. That demand, made on August 4, 2004, included
a request that Underwriters name its arbitrator within 30
days. Underwriters complied with the deadline and named
its arbitrator on September 3.
  On August 6, 2004, before Underwriters nominated its
arbitrator, it sent a demand that Argonaut nominate its
arbitrator. Consistent with the treaty, Underwriters’
demand also invoked the thirty-day time limit; although
the demand did not specifically so note, the expiration of
Argonaut’s thirty-day period would come on Sunday,
September 5, 2004. That day, however, came and went
without any word from Argonaut regarding its nomina-
tion of an arbitrator.
  The following day, Monday, September 6, was Labor
Day, a legal holiday in the United States, where Argonaut
is located and where the arbitration proceedings were to
take place, but a normal business day in the United King-
dom, where the Underwriters syndicate is based. On that
day, one day after the expiration of thirty calendar days
from the date of Underwriters’ request for Argonaut’s
naming of an arbitrator, Underwriters faxed a letter to
Argonaut invoking the default provision of the treaty’s
arbitration clause and naming a second arbitrator. R.1,
Ex. 6.
   In response, on Tuesday, September 7, thirty-two days
after the demand had been made, counsel for Argonaut
first sent an e-mail to Underwriters, representing that
Argonaut’s named arbitrator had been selected properly
on the previous Friday, and notice thereof sent to Under-
writers the previous week. Later in the day on the 7th,
4                                               No. 06-3395

when it became clear that, in fact, no notice had been
sent during the previous week, Argonaut faxed a new
letter to Underwriters naming its arbitrator. In that letter,
Argonaut claimed it was not bound by the strict thirty-
day deadline because its terminus was a Sunday followed
by a legal holiday; instead, it claimed that it was not
obligated to name the arbitrator on Sunday or on Monday
and that the Tuesday, September 7, notice was a
timely nomination of the second arbitrator within the
meaning of the treaty.

B. District Court Proceedings
  Because of the competing demands for arbitrators,
Underwriters filed a petition in the district court under 9
U.S.C. § 5 for an order confirming the appointment of its
two nominees as arbitrators in its dispute with Argonaut.
  Shortly thereafter, Argonaut sent Underwriters notice
that it was withdrawing “without prejudice” its initial
arbitration demand, “specifically and expressly reserv[ing]
all of its rights to seek recovery for any and all amounts
billed to and owed by [Underwriters] with regard to this
loss at any time in the future.” R.4, Ex. A. After this
“withdrawal,” Argonaut filed a 12(b)(1) motion in the
district court, seeking to have the case dismissed for
want of jurisdiction. Because it had made the only arbitra-
tion demand in the case, Argonaut took the view that,
once that demand was withdrawn, the case over the
appointment of arbitrators had become moot. The district
court disagreed; it concluded that Argonaut could not
circumvent Underwriters’ right under the clause to ap-
point the second arbitrator simply by ending the first
arbitration proceeding with the clear intent to begin a
new one.
No. 06-3395                                                  5

   The court granted summary judgment for Underwriters.
It first noted that it had jurisdiction over the petition under
Title 9, Chapter 2 of the United States Code, which imple-
ments the United Nations Convention on the Recognition
and Enforcement of Foreign Arbitral Awards, opened for
signature June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38
(implemented by 9 U.S.C. § 201 et seq.) (“New York
Convention” or “Convention”). The court observed that
there was no genuine dispute as to any material fact and
that the parties’ only disagreement was over the proper
interpretation of the contract default provision and its
thirty-day time limit.
  The parties disagreed about what law should govern the
default provision in the arbitration clause of the treaty.
Underwriters took the view that the matter should be
decided under principles of federal common law; Argonaut
urged that California law controlled.
  In determining that federal common law likely should
provide the rule of decision, the court focused on the need
for unitary standards by which international agreements
to arbitrate would be observed. Because of this particular-
ized need for uniformity, the court concluded that there
was a substantial federal interest in international agree-
ments, sufficient to support the invocation of a federal
common law rule. The court also noted that the available
alternative, i.e., differing state laws on the exemption of
certain days and indeed different foreign country laws on
the exemption of different weekend-days and holidays
(a “morass,” according to the district court, R.33 at 21),
would complicate unnecessarily the relationship of inter-
national parties.
 Looking to this circuit’s precedent, the district court
determined that the substance of the appropriate federal
6                                                 No. 06-3395

common law rule was to enforce strictly the terms of the
agreement as written, with no extension of time for the
weekend and holiday that Argonaut sought. Given that
the parties in the present case are sophisticated com-
mercial parties, the court found no basis for a federal rule
which would excuse a delay not provided for by contract.
   The district court then concluded that it need not rest
its decision on the use of a federal common law rule
because, in any event, the operative state law would
produce the same result in this case.1 Specifically, the
court looked to California Civil Code § 11, which states:
    CERTAIN ACTS NOT TO BE DONE ON HOLIDAYS.
    Whenever any act of a secular nature, other than a work
    of necessity or mercy, is appointed by law or contract
    to be performed on a particular day, which day falls
    upon a holiday, it may be performed on the next busi-
    ness day, with the same effect as if it had been performed
    on the day appointed.
Elsewhere in the Code, holidays are defined to include
Sundays. Cal. Civ. Code § 7; Cal. Gov. Code § 6700(a). The
court concluded that the extension contained in § 11 did
not apply on the facts of this case, because the Code
referred to acts required to be performed on a particular

1
  The district court noted that the parties had only suggested
that either California or Illinois law might apply. The court
concluded that, in determining which substantive law to apply,
Seventh Circuit precedent at the time left open the question of
whether federal or Illinois choice-of-law principles should be
employed, but that either the federal or state choice-of-law
analysis would conclude that California substantive law
should provide the state law rule of decision.
No. 06-3395                                                  7

day, not by a particular day, as was the case in the provi-
sion at issue.
  Finally, the district court declined to exercise discretion
in favor of Argonaut to deny the motion for confirma-
tion of Underwriters’ arbitrators. Noting that, under the
Convention, a court “may appoint arbitrators in accordance
with the provisions of the agreement,” 9 U.S.C. § 206
(emphasis added), Argonaut had contended that the
court should view its authority to confirm the arbitrators
as discretionary. Argonaut contended that the standard
to be employed under the Convention, therefore, was
different than it would be under the FAA. See 9 U.S.C. § 5
(“If in the agreement provision be made for a method of
naming or appointing an arbitrator or arbitrators or an
umpire, such method shall be followed.” (emphasis added)).
Again, the district court avoided the statutory interpreta-
tion issue and held that, in any event, it saw no reason to
exercise discretion in favor of Argonaut under the circum-
stances, where two sophisticated parties could have
included an extension term in their arbitration agreement,
but did not. It further noted that Argonaut had instituted
the arbitration process at a time of its own choosing
and had elected not to appoint an arbitrator simultaneous
to its demand or within the four week period before the
Sunday deadline. The court therefore concluded “[i]f the
Court has discretion, it respectfully declines to exercise it.”
R.33 at 27.
  Argonaut timely appeals the district court’s grant of
summary judgment to Underwriters and denial of sum-
mary judgment to Argonaut.
8                                                No. 06-3395

                             II
                      DISCUSSION
  We review the district court’s decision granting sum-
mary judgment de novo. Jackson v. County of Racine, 474
F.3d 493, 498 (7th Cir. 2007). The parties agree that the
material facts are not in dispute and that the interpretation
of the provisions of a contract presents an issue of law.

A. Jurisdiction
   Argonaut claims that the district court erred in denying
its motion to dismiss for lack of jurisdiction. In Argonaut’s
view, when it withdrew its arbitration demand “without
prejudice,” it mooted the controversy and, accordingly, the
district court lacked jurisdiction to consider the merits.
   As the Supreme Court has stated, the burden of demon-
strating mootness is “a heavy one.” County of Los Angeles v.
Davis, 440 U.S. 625, 631 (1979) (citing United States v. W. T.
Grant Co., 345 U.S. 629, 632-33 (1953)). Argonaut’s attempt
to moot the case here is not unlike that of any other defen-
dant who, facing litigation, elects to pursue a new course to
evade adjudication of the substantive issues underlying the
plaintiff’s case. When all indications are that the defendant
is likely to pursue again the course of conduct giving rise
to the action, courts have not hesitated to declare that the
controversy is not moot. See United States v. W. T. Grant Co.,
345 U.S. 629, 632 (1953) (“A controversy may remain to be
settled in such circumstances, e.g., a dispute over the
legality of the challenged practices.” (citation omitted));
Milwaukee Police Ass’n v. Jones, 192 F.3d 742, 747 (7th Cir.
1999) (declining to find a case moot by the defendant’s
adoption of a concededly temporary remedy). Although
No. 06-3395                                                  9

these cases often deal with instances where a defendant
ceases the primary conduct that is the subject of the suit,
the rationale applies with equal force to cases such as this,
where procedural maneuvering on the part of the respon-
dent aims to defeat the petitioners’ ability to obtain a
judicial determination of their rights. Argonaut explicitly
reserved its rights to institute a new arbitration proceeding,
evincing its intent to move forward with a course of
conduct the legality of which the district court in this action
was charged with deciding. Cf. Davis, 440 U.S. at 631
(noting that jurisdiction may abate when “it can be said
with assurance that ‘there is no reasonable expectation . . .’
that the alleged violation will recur” (quoting W. T. Grant
Co., 345 U.S. at 633) (omissions in original)). Under these
circumstances, the district court correctly decided that the
controversy was not moot.

B. Interpretation of the Arbitration Agreement
  With this preliminary matter addressed, we now turn to
the most significant issue presented by this case: Whether,
in interpreting an arbitration agreement that falls within
the New York Convention, 9 U.S.C. § 201 et seq., but that
contains no choice-of-law provision, we should apply a
federal common law rule of decision or, through the use
of choice-of-law principles, determine what appropriate
state law should govern. Both parties claim that, no matter
what body of law applies, the substantive law favors
their position on the question of whether Argonaut’s
arbitrator was named in a timely fashion. Nevertheless,
Underwriters chiefly argues for the application of federal
substantive law while Argonaut primarily seeks to have
the law of California govern the present dispute. The
decision as to whether to apply federal or state law in
10                                                No. 06-3395

interpreting agreements under the Convention is a ques-
tion of first impression in this circuit.

    1. The New York Convention
  We turn first to the history and purposes of the New
York Convention as it was acceded to by and implemented
in the United States.
  The New York Convention is a multilateral treaty that
entered into force on June 7, 1959. The substantive provi-
sions of the Convention mandate first that courts of
contracting nation-states give effect to arbitration provi-
sions included in international commercial agreements;
they further require courts to recognize and enforce
arbitral awards made within the jurisdiction of other
contracting nation-states. New York Convention, Art. II.
  Consideration of the Convention was undertaken by
the United Nations Economic and Social Council in re-
sponse to a 1953 report issued by the International Cham-
ber of Commerce (“ICC”).2 In that report, the ICC had
concluded that two existing treaties3 imposed onerous
enforcement mechanisms that insufficiently satisfied the
purposes of arbitration in the international commercial

2
  Int’l Chamber of Commerce, Enforcement of International
Arbitral Awards: Report and Preliminary Draft Convention
(ICC Brochure No. 174, 1953) U.N. Doc. E/C.2/373.
3
   Those prior conventions were the Geneva Protocol on Arbitra-
tion Clauses, Sept. 24, 1923, 27 L.N.T.S. 157 (1924), and the
Geneva Convention on the Execution of Foreign Arbitral
Awards, Sept. 26, 1927, 92 L.N.T.S. 301 (1929).
No. 06-3395                                                     11

context: speedy and economical dispute resolution.4 An
international conference was convened, and the Conven-
tion was drafted with a purpose to remedy these inadequa-
cies in existing international law governing arbitration.5

4
   Specifically, the 1927 Convention required nation-states to
recognize “double exequatur.” See Convention on the Execu-
tion of Foreign Arbitral Awards, Sept. 26, 1927, Art. IV, 92
L.N.T.S. 301 (1929). Double exequatur required the party
pursuing award enforcement to have the award “duly authenti-
cated” under the law of the arbitral situs and also to present
evidence that the award is final and not subject to proceedings
in which its validity might be contested. Id. One of the goals
of the New York Convention was “to facilitate the enforcement
of arbitration awards by enabling parties to enforce them in
third countries without first having to obtain either confirmation
of such awards or leave to enforce them from a court in the
country of the arbitral situs.” Karaha Bodas Co. v. Perusahaan
Pertambangan Minyak Dan Gas Bumi Negara, 335 F.3d 357, 366-67
(5th Cir. 2003).
5
   “It was the task of the Conference to encourage recourse to the
friendly arbitration of disputes and to simplify the procedures
for the enforcement of awards. On behalf of the international
business community, the ICC urged the Conference to adopt
a simple and flexible system for the enforcement of arbitral
awards which would (1) cover the widest possible area of
private international disputes; (2) avoid the difficulties inherent
in any reference to the municipal law of the country in which the
award was made; (3) provide for a simple and swift enforcement
of arbitral awards on the basis of evidence that the award was
the final decision made by a competent arbitrator in accordance
with the agreement of the parties; and (4) limit the grounds on
which the enforcement of such an award could be refused to
serious procedural irregularities, incompatibility with the
public policy of the country of enforcement, or proof that the
                                                    (continued...)
12                                                    No. 06-3395

  A United States delegation participated in the 1958
negotiations; however, that delegation recommended
against the United States becoming an original signatory to
the Convention. In part, the delegation was concerned that
the Convention would “override the arbitration laws of a
substantial number of States and entail changes in State
and possibly Federal court procedures.” See U.S. Del. Rep.
22, at 2.
  After that initial recommendation, support grew, both
within and outside of the United States, for a uniform,
economical and efficient means of resolving international
commercial disputes with American citizens and entities.
See H.R. Rep. No. 91-1181 at 1 (1970), as reprinted in 1970
U.S.C.C.A.N. 3601, 3601; S. Rep. No. 91-702 at 10 (1970).
Accordingly, twelve years after it initially was opened for
signature, the United States acceded to the treaty. Later that
year, Congress implemented the Convention by adding a
second chapter to the FAA. The concern for an unintended
effect on domestic laws, which had counseled against the
participation of the United States in 1958, was addressed in
the implementation. Specifically, § 202 of the FAA ex-
pressly limits the application of the Convention to disputes
involving a foreign party, or, if only disputes involving
exclusively United States citizens are involved, to circum-
stances in which the dispute has a “reasonable relation
with one or more foreign states.” 9 U.S.C. § 202.6 Further,

5
  (...continued)
award had been annulled.” U.N. ESCOR, 3d Sess., 3d mtg. at 6-7,
U.N. Doc. E/CONF.26/SR.3 (May 21, 1958) (emphasis added).
6
  “[O]ur purpose in adhering to the [New York] Convention is
for the beneficial effects it will produce for the foreign commerce
                                                      (continued...)
No. 06-3395                                                  13

the implementing legislation makes clear that the standards
contained in the FAA apply to disputes under the Conven-
tion “to the extent [the FAA] is not in conflict with [the
Convention as implemented] or the Convention as ratified
by the United States” although the Convention is codified
as part of the FAA. 9 U.S.C. § 208. Therefore, although the
Convention would displace certain domestic laws, it would
do so only in the narrow context of truly international
disputes; within that narrow context, where appropriate,
federal arbitration law under the FAA would fill the gaps
left by the Convention.
   Since its implementation, many decisions have noted that
the Convention demonstrates a shared understanding of
the necessity for uniform rules to facilitate efficient interna-
tional arbitration. See Scherk v. Alberto-Culver Co., 417 U.S.
506, 520 n.15 (1974) (noting that one goal of the Conven-
tion’s adoption was to facilitate uniformity in recognition
and enforcement of arbitration provisions and awards);
Smith/Enron Cogeneration Ltd. P’ship v. Smith Cogeneration
Int’l, Inc., 198 F.3d 88, 96 (2d Cir. 1999) (noting the Conven-
tion’s “goal of simplifying and unifying international
arbitration law”); I.T.A.D. Assocs., Inc. v. Podar Bros., 636
F.2d 75, 77 (4th Cir. 1981) (stating that, in interpreting and
applying the Convention’s provisions relating to compel-
ling arbitration, courts “must not only observe the strong
policy favoring arbitration, but must also foster the adoption
of standards which can be uniformly applied on an international
scale.” (emphasis added)).

6
  (...continued)
of the United States and not to make any changes with respect
to matters that are traditionally within the jurisdiction of the
50 States of the Union.” S. Rep. No. 91-702 at 6 (1970) (em-
phasis added).
14                                                No. 06-3395

  2. Choice of Law
  With this history in mind, we turn now to the primary
issue in the present case: What substantive law should be
applied to interpret the terms of an arbitration agreement
under the Convention when the parties have not included
an explicit choice-of-law provision in their contract?
  No doubt because of the growing trend to include choice-
of-forum and choice-of-law clauses in sophisticated
commercial agreements, there is scant precedent available
suggesting what law should be applied to interpret the
substantive provisions of an agreement that is covered by
the Convention but contains no choice-of-law provision.
We note, however, that, when our sister circuits have been
confronted with issues relating to agreements under the
Convention—whether the question be arbitrability or
enforcement or some other question—they appear to have
resolved those issues by employing federal rules of deci-
sion, particularly when the parties have not provided
otherwise by their contract. See InterGen N.V. v. Grina, 344
F.3d 134, 144 (1st Cir. 2003) (considering whether the
parties to the litigation were bound by the arbitration
agreement and applying “federal common law[, which]
incorporates general principles of contract . . . law”); id. at
143 (“A central goal of the Convention—and the driving
force behind Congress’s enactment of chapter 2—was to set
out uniform rules governing the recognition and enforce-
ment of international arbitration awards. Applying varying
state standards in cases falling within the Convention’s
ambit would be in tension with the elemental purpose of
chapter 2.”); Beiser v. Weyler, 284 F.3d 665, 673 (5th Cir.
2002) (noting that federal appellate review of orders related
to arbitration was necessary, in part, because “[r]educing
local variations in how courts interpret and enforce arbitra-
No. 06-3395                                                  15

tion clauses makes it easier for businesses engaged in
international transactions to use and rely on such clauses”);
Smith/Enron Cogeneration, 198 F.3d at 96 (“When we
exercise jurisdiction under Chapter Two of the FAA, we
have compelling reasons to apply federal law, which is
already well-developed, to the question of whether an
agreement to arbitrate is enforceable. . . . [P]roceeding
otherwise would introduce a degree of parochialism and
uncertainty into international arbitration that would
subvert the goal of simplifying and unifying international
arbitration law.”); McDermott Int’l, Inc. v. Lloyds Underwrit-
ers of London, 944 F.2d 1199, 1209 (5th Cir. 1991) (applying
a uniform rule that contract language must waive explicitly
the right to remove to federal court granted under the
Convention Act, because such rule “accords with the
Convention’s purpose of ensuring that parties to interna-
tional business transactions can expect courts to enforce
their specifications as to how their disputes will be re-
solved”); cf. Motorola Credit Corp. v. Uzan, 388 F.3d 39, 51
(2d Cir. 2004) (declining an invitation to apply a uniform
federal rule in the face of a choice-of-law provision electing
Swiss law, but noting: “Defendants also argue that apply-
ing federal law to the interpretation of arbitration agree-
ments is required to further the purposes of the FAA and
to create a uniform body of federal law on arbitrability.
Their uniformity argument has some force where the parties
have not selected the governing law.” (emphasis added)).7

7
  Although we have not addressed the present issue head-on,
we also have applied “ordinary rules of contract” to hold that a
party could not submit to arbitration and later claim an award
was unenforceable for lack of a written agreement to arbitrate,
a necessary predicate to compelling arbitration under the
                                                  (continued...)
16                                                     No. 06-3395

  Argonaut urges that these cases, primarily addressed to
arbitrability of disputes, have no application to the present
dispute, which is concededly arbitrable. We cannot agree.
The interpretation of the portion of the arbitration clause
related to the appointment of arbitrators seems to us very
closely aligned with the other issues of interpretation of
arbitration agreements under the Convention; such ques-
tions present an equally compelling case for a uniform
federal rule in the absence of direction to use another law
selected by the parties themselves. In all of those areas, the
Convention requires, and Congress has recognized in the
statutory implementation of the Convention, an important
federal interest in consistent and uniform interpretation of
agreements governed by the Convention. These cases
appropriately address the purposes of the Convention as
understood by the Supreme Court. “The goal of the
Convention, and the principal purpose underlying Ameri-
can adoption and implementation of it, was to encourage
the recognition and enforcement of commercial arbitration
agreements in international contracts and to unify the
standards by which agreements to arbitrate are observed and
arbitral awards are enforced in the signatory countries.”
Scherk, 417 U.S. at 520 n.15 (emphasis added). “[C]oncerns
of international comity, respect for the capacities of foreign
and transnational tribunals, and sensitivity to the need of
the international commercial system for predictability in the
resolution of disputes require that we enforce the parties’
agreement even assuming that a contrary result would be

7
   (...continued)
Convention. Slaney v. Int’l Amateur Athletic Found., 244 F.3d 580,
591 (7th Cir. 2001) (citing Smith/Enron Cogeneration Ltd. P’ship
v. Smith Cogeneration Int’l, Inc., 198 F.3d 88, 96-97 (2d Cir. 1999)).
No. 06-3395                                                   17

forthcoming in a domestic context.” Mitsubishi Motors Corp.
v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 629 (1985)
(emphasis added).
  We believe that this overarching federal concern with the
uniformity of treatment of international arbitration agree-
ments requires that the issue before us be resolved by a
federal common law rule, rather than by a state rule of
decision. The Supreme Court has stated that
    [t]here is, of course, “no federal general common law.”
    Nevertheless, the Court has recognized the need and
    authority in some limited areas to formulate what has
    come to be known as “federal common law.” These
    instances are “few and restricted,” and fall into essen-
    tially two categories: those in which a federal rule of
    decision is “necessary to protect uniquely federal
    interests,” and those in which Congress has given the
    courts the power to develop substantive law.
Texas Indus., Inc. v. Radcliff Materials, Inc., 451 U.S. 630, 640
(1981) (internal citations omitted). We conclude that the
Convention and its implementing federal legislation
express a clear federal interest in uniform rules by which
agreements to arbitrate will be enforced. We believe this
view is consistent with the approaches taken by our sister
circuits, which have deemed uniform federal rules of
decision appropriate to resolve disputes arising under
agreements governed by the Convention. See, e.g., InterGen
N.V., 344 F.3d at 144; Smith/Enron Cogeneration, 198 F.3d at
96.
  We stress that we deal here with more than a generalized
federal interest in uniformity that might be insufficient to
warrant application of a federal rule. Cf. O’Melveny &
Myers v. F.D.I.C., 512 U.S. 79, 87-88 (1994) (noting that
18                                                No. 06-3395

uniformity is the “most generic (and lightly invoked)” basis
by a party seeking to assert a federal interest sufficient to
demand a federal rule). The uniformity at issue here is one
that implicates the very specific interest of the federal
government in ensuring that its treaty obligation to enforce
arbitration agreements covered by the Convention finds
reliable, consistent interpretation in our nation’s courts.
     That [this is a] uniquely federal interest does not,
     however, end the inquiry. That merely establishes a
     necessary, not a sufficient, condition for the displace-
     ment of state law. Displacement will occur only where,
     as we have variously described, a “significant conflict”
     exists between an identifiable “federal policy or inter-
     est and the [operation] of state law,” or the application
     of state law would “frustrate specific objectives” of
     federal legislation.
Boyle v. United Techs. Corp., 487 U.S. 500, 507 (1988) (internal
citations and footnote omitted).
  Here, the conditions set forth in Boyle v. United Technolo-
gies Corp., 487 U.S. 500 (1988), for resort to federal rules
have been met. The application of parochial rules that
excuse or extend contractual deadlines to agreements
arising under the Convention would frustrate one of the
primary objectives of the United States in becoming a
signatory to the Convention: securing uniform standards
by which agreements to arbitrate international disputes are
governed.
  In light of the recognition by the Supreme Court and by
our sister circuits that uniformity in determining the
manner by which agreements to arbitrate will be enforced
is a critical objective of the Convention, we hold that, in
this circumstance, the injection of a parochial rule that
No. 06-3395                                                    19

interprets a contractual deadline other than by its plain
wording is contrary to the interests of the United States as
embodied the Convention. Underwriters has identified a
specific objective of federal law, namely, to ensure uniform
enforcement of agreements to arbitrate. Were we to con-
clude that state law provided the applicable rule of deci-
sion in this case, we would sanction an interpretation of the
contract that permitted, necessarily, non-uniform results.8
   In reaching the conclusion that federal law must govern
this issue, we acknowledge that, in the context of disputes
governed by the Warsaw Convention, which regulates
liability for international air travel, the Supreme Court has
discouraged federal courts from creating a body of uniform
federal common law. Zicherman v. Korean Air Lines Co., 516

8
   We note that Argonaut’s suggestion, that California law
should apply and that it would extend the contract deadline,
would permit such an extension of the deadline not only for
Sundays and for national holidays, such as Labor Day, but also
for Cesar Chavez Day (March 31) and Admission Day (Septem-
ber 9). See Cal. Gov. Code § 6700(f), (j). Under this interpreta-
tion, in Illinois, Casimir Pulaski Day (March 1) would be
exempted. See 205 ILCS 630/17(a) (defining holidays); 5 ILCS
70/1.11 (providing that when the time within which an act
required by law to be performed ends on a day designated as
a holiday by the state, it may be performed on the next busi-
ness day). In Hawaii, Argonaut may have had the benefit of
Prince Jonah Kuhio Kalanianaole Day (March 26) and King
Kamehameha I Day (June 11), see Hi. Rev. Stat. § 8-1 (listing
holidays), id. § 1-32 (providing that acts required by contract to
be performed on a particular day, which fall on a holiday,
may be performed on the next business day). The application
of local rules such as these necessarily would defeat the unifor-
mity goals of the Convention.
20                                                 No. 06-3395

U.S. 217, 229-31 (1996) (“[T]he Warsaw Convention
permit[s] compensation only for legally cognizable harm,
but leave[s] the specification of what harm is legally
cognizable to the domestic law applicable under the
forum’s choice-of-law rules.”). In reaching its conclusion,
the Supreme Court relied on a specific factor not applicable
in the New York Convention context, namely, that the
Convention itself left undefined the critical issue of which
harms would be compensable, apparently in anticipation
of the variety of laws of various jurisdictions that would be
applied to determine the question, id. at 226-27; in short,
the Warsaw Convention found “the imposition of unifor-
mity” on the critical question of liability unfeasible and
“[t]he Convention neither adopted any uniform rule of its
own nor authorized national courts to pursue uniformity in
derogation of otherwise applicable law.” Id. at 230-31. By
contrast, although not addressing the choice-of-law issue
currently before us, the Supreme Court has recognized that
in the context of the New York Convention, uniformity of the
law is of paramount importance. See Scherk, 417 U.S. at 520
n.15.9

9
   From what we have said up to this point, it should be clear
that we cannot accept Argonaut’s suggestion that we treat a
case falling within the Convention as we would treat any
domestic case under the FAA, 9 U.S.C. § 1, et seq. As we have
noted, federal substantive law does not govern disputes falling
within the FAA. See Stone v. Doerge, 328 F.3d 343, 345 (7th Cir.
2003). Of significance to us in reaching that conclusion was
the settled rule interpreting § 10 of the FAA, 9 U.S.C. § 10,
that federal courts have limited jurisdiction to compel arbitra-
tion; that is, were we to have accepted an argument that fed-
eral substantive law applies, federal question jurisdiction
would exist in every case of a motion to compel arbitration or
                                                   (continued...)
No. 06-3395                                                       21

9
   (...continued)
enforce an award, a result the Supreme Court already had
rejected. Stone, 328 F.3d at 345; see also Moses H. Cone Mem’l Hosp.
v. Mercury Const. Corp., 460 U.S. 1, 25 n.32 (1983) (“The Arbitra-
tion Act . . . . creates a body of federal substantive law establish-
ing and regulating the duty to honor an agreement to arbitrate,
yet it does not create any independent federal-question jurisdic-
tion under 28 U.S.C. § 1331 or otherwise. . . . [T]here must be
diversity of citizenship or some other independent basis for
federal jurisdiction . . . . [for] enforcement of the Act is left in
large part to the state courts.”). There is an independent grant of
federal subject matter jurisdiction in the legislation implement-
ing the Convention, 9 U.S.C. § 203: “An action or proceeding
falling under the Convention shall be deemed to arise under
the laws and treaties of the United States.” Federal question
jurisdiction unquestionably exists in cases arising under the
Convention, and therefore, the considerations that guided our
decision in Stone are inapposite.
  Neither does this court’s decision in Stawski Distributing Co. v.
Browary Zywiec S.A., 349 F.3d 1023 (7th Cir. 2003), counsel
against the use of a uniform federal rule in this matter.
Stawski holds that state law may limit the application of the
parties’ choice-of-law under certain circumstances. In Stawski,
the issue was the validity of the defendant’s act in terminating
a beer distributorship contract under the Illinois Beer Industry
Fair Dealing Act, 815 ILCS 720/1 et seq. The parties’ agreement
to arbitrate the dispute was enforceable, but the choice-of-law
provision was invalid in the context of the actual dispute, which
concerned violations of duties imposed under state substantive
law. Stawski does not stand for the broad proposition that state
law may override choice-of-law provisions generally. More
important to the issue currently before us, neither does it hold
that state rules should apply to questions of interpretation of
agreements arising under the Convention.
22                                                  No. 06-3395

  In sum, the substantial federal interests in uniform
interpretation of agreements under the Convention justify
the application of a uniform rule of decision on the ques-
tion presented. In the absence of a choice-of-law provi-
sion, we conclude that parties are to be bound to the
explicit language of arbitration clauses, with no state-
specific exceptions that would extend otherwise clear
contractual deadlines. Of course, sophisticated commercial
parties such as these may provide by contract that thirty
days does not include Sundays and holidays, or that a
contract with a terminus for performance on a Sunday or
holiday (as recognized by some identifiable body—state,
federal or otherwise) may be timely performed on the next
business day. However, in the absence of such an agree-
ment, or an agreement to apply particular parochial rules
of interpretation, we believe a uniform federal rule that
enforces strongly arbitration deadlines under the Conven-
tion is necessary and appropriate. It serves the purposes
identified by the Fourth Circuit in its decision in I.T.A.D.
Associates, Inc. v. Podar Bros., 636 F.2d 75 (4th Cir. 1981), that
in fashioning the rules we shall employ in our review of
agreements under the Convention, we must “foster the
adoption of standards which can be uniformly applied on
an international scale.” Id. at 77.
  As the foregoing discussion makes plain, the content of
the federal rule we today adopt must provide that,
when the parties do not otherwise determine by contract,
deadlines included in arbitration agreements under the
Convention will admit of no exceptions. Thirty days must
mean thirty days. When the end of the thirty days falls on
a Saturday, a Sunday, a national holiday or a state or
parochial holiday, the parties will be bound nonetheless
No. 06-3395                                                    23

to comply with the deadline for which they bargained.10

                          Conclusion
     The judgment of the district court is affirmed.
                                                       AFFIRMED
A true Copy:
          Teste:

                            _____________________________
                            Clerk of the United States Court of
                              Appeals for the Seventh Circuit

10
  Argonaut further has urged this court to hold that the district
court had discretion not to refuse to confirm the appointment of
the arbitrators under the terms of the Convention. We decline to
reach this question, however, because the district court already
has indicated that, if it had discretion, it would not exercise it
in favor of Argonaut and excuse an otherwise applicable
deadline.

                      USCA-02-C-0072—8-29-07