The parties in Answers in Genesis of Kentucky, Inc. v. Creation Ministries International, Ltd., 2009 U.S. App. LEXIS 2743 (6th Cir. Feb. 13, 2009), were, respectively, U.S. and an Australian entities advocating creationism. Formerly affiliated, they entered into two agreements, a Memorandum of Understanding that required “Christian arbitration” of any dispute under the MOA or any related agreement, and a Deed of Copyright License that provided for the non-exclusive jurisdiction of the state courts of Victoria, Australia. The defendant, CMI, commenced suit in Australia (for some reason in the state court of Queensland, rather than Victoria) and the plaintiff, AiG, moved to compel arbitration in Kentucky federal district court. The District Court compelled arbitration in Kentucky (the MOA was silent as to the location):
[Appellate Jurisdiction over Order to Compel Arbitration Lacking.] The FAA generally prohibits interlocutory appeals of orders compelling arbitration. See 9 U.S.C. § 16(b)(3). However, because AiG petitioned the district court to enjoin the Australian proceedings pending arbitration, we do have jurisdiction under 9 U.S.C. § 16(a)(1) and 28 U.S.C. § 1292 (a)(1) to hear this appeal. See Albert M. Higley Co. v. N/S Corp., 445 F.3d 861, 863 (6th Cir. 2006).
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[The Limited Utility of “Non-Exclusive” Jurisdiction Clauses.] The forum selection clause expressly provides that the "courts and courts of appeal" of the "State of Victoria, Australia" are the "non-exclusive jurisdiction" in which the parties may file suit. CMI's argument that this contractual provision required the district court to dismiss AiG's motion to compel arbitration would read the word "non-exclusive" out of the contract. AiG's argument would have us read into the contract an entire clause that does not appear; namely, that the forum selection clause only applies if no one seeks arbitration. ***[T]he contract language clearly and unambiguously provides that the courts of the State of Victoria are only one possible forum. *** The district court did not err in refusing to dismiss AiG's motion to compel arbitration based upon the contract's forum selection clause.
[Footnote 3.] We further note that … [i]f CMI's reading of the clause is correct, the only possible forum for any suit concerning these agreements is "the State of Victoria, Australia." DOCL at 7 (emphasis added). CMI filed its suit in the State of Queensland, Australia. Thus, CMI's proposed interpretation would mean that CMI itself has failed to file in the proper forum.
[International Comity as a Ground to Abstain on Motion to Compel.] CMI next contends that if the district court properly construed the forum selection clause, the district court nonetheless should have abstained on the basis of international comity. CMI suggests that this court combine the Eleventh Circuit's analysis in Turner Entm't Co. v. Degeto Film GmbH, 25 F.3d 1512 (11th Cir. 1994), with the factors enumerated by the Supreme Court in Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976), to come to the conclusion that comity and fairness dictate staying the American litigation. AiG responds that abstention is inappropriate in this case — both because the factors suggested by CMI weigh against abstention and the strong public policy of the United States supporting arbitration makes abstention inappropriate.
We review a district court's decision on issues of abstention de novo because of the complex interaction of federal jurisdictional and comity concerns. ***
Whether to abstain in regard to a motion to compel arbitration because of international comity concerns is an issue of first impression in this circuit. Case law is available from other circuits in the area of abstention based upon international comity in general. " One approach has taken the criteria enunciated in Colorado River and applied them to the international context" while another approach has developed a similar test with more of a focus on the "special concerns" injected by international comity. *** CMI suggests adopting the approach of the Eleventh Circuit in Turner, which combined the two complementary lines of cases to develop a multi-factor balancing test weighing international comity, concerns about "fairness to litigants," and the "efficient use of scarce judicial resources." …
… For the purposes of this appeal, it is not necessary that we decide whether abstention is ever appropriate when one party seeks to compel arbitration with regard to an agreement in which the other party is international in origin. We conclude that even assuming that abstention might be appropriate in such a circumstance, CMI has not met its burden in proving that abstention is required. We base our conclusion upon weighing the factors found in the Colorado River test. ***
Colorado River instructs that the "most important" factor a court must consider is whether there is a "clear federal policy evinc[ing] . . . the avoidance of piecemeal adjudication" found within the statutory scheme at issue. Id. at 819. In the case of the Federal Arbitration Act, there most clearly is not such a policy. In Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213 (1985), the Supreme Court considered whether concerns over "bifurcated proceedings" should cause a district court to refuse to compel arbitration when one set of state-law claims was subject to arbitration and another interrelated set of federal-law claims was not. *** The Supreme Court … held that the "Arbitration Act requires district courts to compel arbitration of . . . arbitrable claims when one of the parties files a motion to compel, Colorado Rivereven where the result would be the possibly inefficient maintenance of separate proceedings in different forums." …. The Court further observed that "[t]he preeminent concern of Congress in passing the Act was to enforce private agreements into which parties had entered." …. This concern should govern even if "piecemeal litigation" was the inevitable result. …. Thus, CMI cannot point to a clearly articulated policy against bifurcated litigation with regard to the FAA.
International law, as incorporated by congressional action, supports our conclusion that abstention is inappropriate in this case. A similar concern for enforcing private agreements led to the adoption of the international treaty under which AiG seeks to vindicate its right to arbitrate. AiG filed this action under § 206 of the FAA. 9 U.S.C. § 206. Section 206 provides that district courts may compel arbitration upon motion of a party to an agreement covered by the 1958 Convention on the Recognition and Enforcement of Arbitral Awards ("Convention"). Chapter Two of the FAA incorporates the provisions of the Convention into American domestic law. See 9 U.S.C. §§ 201-208. Both Australia and the United States are signatories to the Convention, and thus its terms govern the resolution of this dispute. *** Article II of the Convention, as incorporated by the FAA, establishes the requirements necessary for an arbitration agreement to come within the Convention's terms. The agreement must be in writing, concern a "legal relationship . . . which is considered as commercial," and either at least one party to the contract must not be an American citizen or the commercial relationship must have a "reasonable relation with one or more foreign states." 9 U.S.C. § 202. … All of the Convention's requirements are … met. Consequently, "when one of the parties" to the arbitration agreement requests a court refer the dispute to arbitration, that court "shall" do so. Convention art. II(3). Cf. 9 U.S.C. § 208.
As other courts construing the Convention's language have observed, "there is nothing discretionary about Article II(3) of the Convention." … The language of the treaty and its statutory incorporation provide for no exceptions. *** Further, it is difficult to see how comity concerns could come into play where both Australia and the United States, as signatories to the Convention, apply the same law. To assume that the district court's order infringes on comity concerns is to assume that Australian courts would not follow their obligation under the Convention, as CMI's argument must rest upon an assumption that an Australian court would be less likely to order arbitration. Such an argument both demeans the foreign tribunal and hardly advances the comity interests that CMI claims to seek to vindicate. Cf. Gau Shan Co. v. Bankers Trust Co., 956 F.2d 1349, 1355 (6th Cir. 1992) (noting that federal courts should not seek to convey a message that they have "little confidence in the foreign court's ability to adjudicate a given dispute fairly").
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