Laminoirs-Trefileries-Cableries de Lens, S.A. v. Southwire Co.

484 F. Supp. 1063 (1980)

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Laminoirs-Trefileries-Cableries de Lens, S.A. v. Southwire Co.

United States District Court for the Northern District of Georgia
484 F. Supp. 1063 (1980)

Facts

In 1974, Southwire (plaintiff), a Georgia corporation that manufactures cable products, entered a purchase agreement with Laminoirs-Trefileries-Cableries de Lens, S.A. (LTCL) (defendant), a French corporation that manufactures steel wire and rope. The purchase agreement concerned galvanized steel wire and provided that the price to be paid by Southwire was to be determined and adjusted according to a formula based on the world market price of steel wire. The purchase agreement also contained an arbitration clause and a governing-law clause, stating that the laws of Georgia governed the purchase agreement insofar as the Georgia laws are in accordance with French laws. A dispute arose between the parties, and LTCL demanded arbitration under the arbitration clause in the purchase agreement. In February 1979, the arbitrators entered a partial arbitral award that accepted LTCL's interpretation of the world market price adjustment clause. The award ordered Southwire to pay LTCL the aggregate amount of underpayments caused by Southwire's interpretation of the clause plus interest. The arbitral tribunal found in favor of Southwire on one of its claims so that the amount of damage would be withheld from funds due to LTCL. After the parties settled one outstanding claim, the arbitral tribunal entered a further arbitral award, confirming settlement of the outstanding claim and allocating costs. Southwire then filed a state court action in Georgia, asking the court to vacate the awards. LTCL removed the suit to the federal district court and filed a separate suit seeking confirmation of the awards. Southwire attacked the conclusion of the arbitrators that the French legal rate of interest should apply to its award. Although the parties did not formally introduce the relevant French statute, the tribunal applied the French statute in the award. LTCL argues that the arbitrators merely took judicial notice of the French statute. Southwire countered that absent notice to Southwire that French law would be relied upon, judicial notice by the arbitral tribunal was inappropriate. Southwire contended that the award of interest based on the French law was therefore against public policy and unenforceable.

Rule of Law

Issue

Holding and Reasoning (Tidwell, J.)

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