Chinmax Medical Systems Inc. v. Alere San Diego, Inc.

2011 WL 2135350 (2011)

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Chinmax Medical Systems Inc. v. Alere San Diego, Inc.

United States District Court for the Southern District of California
2011 WL 2135350 (2011)

  • Written by Tammy Boggs, JD

Facts

Alere San Diego, Inc. (Alere) (defendant) manufactured medical devices, which were exclusively distributed by Chinmax Medical Systems Inc. (Chinmax) (plaintiff) under a distribution agreement. In 2007, the parties entered into a second distribution agreement, which had several renewal options through March 2012. At one point, the parties had a dispute over the right to register new products in China: Alere began registering new products in China despite Chinmax’s claim to have the exclusive right of registration under the parties’ agreement. Alere profited from sales of its newly registered products, which Chinmax asserted were illegal sales. As setoff for its claimed damages, Chinmax believed it had the right to withhold approximately $2.7 million in payment to Alere for delivered products. To resolve the dispute, Chinmax initiated an arbitration against Alere following rules of the American Arbitration Association (AAA), as required by the distribution agreement. The rules of the AAA allowed a single emergency arbitrator to issue interim relief before a panel of three arbitrators could be appointed. At the same time, the parties’ distribution agreement allowed either party to seek “interim or provisional relief” from a court of competent jurisdiction. Alere filed a request with the AAA for an interim award, which was granted by an emergency arbitrator. The interim award generally established a process to continue Alere’s product-registration renewals and for Chinmax to identify bank accounts from which it could pay owed amounts while the parties’ dispute was pending review by a full arbitration panel. In district court, Chinmax filed a petition and motion to vacate the interim award.

Rule of Law

Issue

Holding and Reasoning (Hayes, J.)

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