Safran Electronics & Defense SAS and Safran Electronics & Defense Germany GmbH v. Ixblue SAS

At a glance

Parties

Safran Electronics & Defense SAS (France) and Safran Electronics & Defense Germany GmbH (Germany) v. iXblue SAS (France)

Case no.

No. 18-cv-7220 (LAK)

Court

U.S. District Court, Southern District of New York (Lewis A. Kaplan, District Judge)

Forum and rules

Petition under 9 U.S.C. § 203 (New York Convention) about competing arbitrations: Paris under French law (Article IX(B)) and ICC arbitration in New York (Article IX(C)) of a 1993 License and Know-How Agreement

Treaty

New York Convention; arbitration clause in Article IX of the License Agreement of 12 August 1993

Sector

Fiber-optic gyroscope technology; defense and navigation; technology licensing

Outcome

Petition to enjoin and stay the New York arbitration denied. iXblue's motion to dismiss granted without prejudice (6 February 2019).

The dispute

In 1993 the predecessors of Safran Electronics & Defense SAS (SED) and iXblue SAS entered into a License and Know-How Agreement. Under it, iXblue's predecessor licensed fiber-optic gyroscope (FOG) know-how. Article IX sends disputes to arbitration in Paris under French law (IX(B)). Disputes that result from sales of the Product to an end-user outside the EEC go instead to ICC arbitration in New York (IX(C)). After a 2011 Settlement Agreement and further disputes over the transfer of technology, SED filed a request for arbitration in Paris on 29 June 2018. Two weeks later iXblue filed an ICC arbitration in New York against SED and its German subsidiary, SED Germany, relying on sales to Canadian suppliers. SED and SED Germany asked the court to enjoin and stay the New York arbitration, to bar it against SED Germany (which had not signed the agreement), and to compel iXblue to take part in the Paris arbitration. iXblue moved to dismiss under Rule 12(b)(6).

Key holdings

1. The court has subject-matter jurisdiction under 9 U.S.C. § 203. The agreement is written, it provides for arbitration in States party to the New York Convention, it is commercial, and it is not entirely domestic. Section 203 also covers petitions to compel, enjoin or stay arbitration. pp. 7–8
2. SED Germany is bound by the arbitration agreement even though it did not sign it. It took on the obligation to arbitrate by its conduct: before the Versailles Court of Appeal it had argued that iXblue's claims were subject to arbitration under Article IX(C), and that argument succeeded. pp. 10–12
3. Whether a non-signatory is bound is a threshold question for the court. But the petitioners conceded that questions of arbitrability had been delegated to the arbitrators. With SED Germany bound, all parties intended the arbitrators to decide which arbitration provision applies. pp. 13–14
4. The first-filed rule does not apply. Under the License Agreement the claims can belong to only one of the two forums. Staying New York in favour of Paris would take away the New York tribunal's authority to rule on its own jurisdiction. SED Germany is also not a party to the Paris arbitration. pp. 14–15
5. No preliminary injunction. Arbitrability is for the arbitrators, so the petitioners showed neither a likelihood of success nor serious questions going to the merits. The court also noted that their earlier statements to the Versailles court contradict their current position on the Paris forum. pp. 16–17
6. The request to compel iXblue to take part in the Paris arbitration was refused because iXblue had not refused to take part. It had appointed its own arbitrator in Paris and had entered into a tolling agreement with SED. p. 17 n. 64

Procedural history

1. 12 August 1993The parties' predecessors entered into the License and Know-How Agreement.
2. 2011Settlement Agreement and Addendum to the License Agreement.
3. February 2016The Versailles Court of Appeal affirmed the Nanterre Commercial Court's refusal of iXblue's application for an expert assessment.
4. 29 June 2018SED filed a request for arbitration in Paris under Article IX(B).
5. July 2018iXblue filed an ICC request for arbitration in New York against SED and SED Germany under Article IX(C).
6. 10 August 2018SED and SED Germany petitioned the S.D.N.Y. to enjoin and stay the New York arbitration.
7. 11 September 2018iXblue moved to dismiss under Rule 12(b)(6).
8. 6 February 2019Memorandum Opinion: injunction and stay denied; motion to dismiss granted without prejudice.

Tribunal, counsel and experts

Decided by

• Lewis A. Kaplan Judge, U.S. District Court, Southern District of New York

For the claimant

Chaffetz Lindsey LLP

For the respondent

Foley Hoag LLP

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Keywords

• Safran
• iXblue
• fiber-optic gyroscope
• New York Convention
• 9 U.S.C. § 203
• non-signatory
• assumption by conduct
• anti-arbitration injunction
• stay of arbitration
• first-filed rule
• competence-competence
• delegation of arbitrability
• competing arbitrations
• ICC
• Paris arbitration
• technology license
• Eurofog

Summary generated with AI from the published documents — refer to the award for the authoritative text.