with California law concerning corporate reorganization.
On November 14, 1986, certain revised pages of the Definitive Agreement, the Amended Trading Agreement, the Financing Agreement and the Amended Technology Transfer and Manufacturing Agreement were circulated to all parties and their counsel. Also on that date, eight signature pages for the Definitive Agreement, not including the one previously signed by Kyocera's chairman, were forwarded to Kyocera in Japan for signature and return. Those signature pages were never returned by Kyocera.
On December 17 and 18, 1986, Kyocera's attorney met with attorneys for the other parties in a "pre-closing" meeting. Kyocera's attorney at that time advised that Kyocera declined to sign the Amended Trading Agreement and the Financing Agreement prepared by Prudential Trade because those agreements provided for direct sale of manufactured product to LaPine without the intervening sales to KK Trade and Prudential Trade.
On December 18, 1986, also at the pre-closing meeting, a representative of Kyocera executed the eight copies of the signature page to the Definitive Agreement, and also executed all exhibits to the Definitive Agreement except the Amended Trading Agreement in the form proposed by Prudential Trade. On December 22, 1986, Kyocera's counsel advised the parties that although Kyocera would participate in the final closing meeting set for December 29, 1986, it would not execute and deliver the proposed Amended Trading Agreement and the Financing Agreement. On December 26, 1986, Kyocera's counsel advised the parties that Kyocera would sign a version of the Amended Trading Agreement providing that Prudential Trade remained the party responsible to pay Kyocera for disk drive product supplied by Kyocera to LaPine.
On December 29, 1986, the closing took place and all documents which constituted exhibits to the Definitive Agreement were executed and delivered between the parties except the Amended Trading Agreement. LaPine and Prudential Trade declined to sign the form of Amended Trading Agreement previously circulated by Kyocera.
By an Interim Agreement dated December 29, 1986, the parties agreed to proceed with the closing of the LaPine reorganization even though the Amended Trading Agreement had not been executed. All rights were reserved with respect to that agreement, and the parties agreed to future meetings to attempt to resolve their differences.
On December 29, 1986, counsel for LaPine and Prudential Trade gave notice by letter to Kyocera of Kyocera's breach of the Definitive Agreement by reason of Kyocera's failure to execute the Amended Trading Agreement proposed by counsel for LaPine and Prudential Trade.
On January 9, 1987, the Board of Directors of Kyocera approved its investment in LaPine under the Plan for Reorganization but did not approve the form of Amended Trading Agreement proposed by Prudential Trade.
On May 8, 1987, LaPine filed this action seeking to compel Kyocera to continue to supply drives under the terms of the Definitive Agreement. On September 2, 1987, this court granted Kyocera's motion to compel arbitration. Now before the court are LaPine's motion to confirm the arbitration award and Kyocera's motion to vacate that award.
A. SCOPE OF REVIEW
As it turns out, after extensive arguments and briefing of multiple issues, the threshold issue of the scope of review is wholly determinative of these motions.
Kyocera places primary reliance for its position that a United States District Court, in deciding whether to confirm or to vacate an arbitration award, is bound to exercise the breadth of review provided for by the agreement between the parties upon which the arbitration is grounded upon two cases: Fils et Cables D'Acier de Lens v. Midland Metals Corp., 584 F. Supp. 240 (S.D.N.Y. 1984) and Gateway Technologies, Inc. v. MCI Telecommunications Corp., 64 F.3d 993 (5th Cir. 1995). I will take up the Fils case first. That case is apt and strongly supports Kyocera's contention. In that case the court recognizes:
The provision embodied in the FICAL/Midland contracts differs from a standard arbitration clause, however, insofar as it specifically sets forth the standard of judicial review to be applied in the event that either party seeks confirmation of an arbitration award.