Appeal from the United States District Court for the Western District of Washington Thomas S. Zilly, District Judge, Presiding D.C. No. CV-06-00840-TSZ.
The opinion of the court was delivered by: Milan D. Smith, Jr., Circuit Judge
Argued and Submitted January 22, 2009 -- Seattle, Washington
Before: Robert R. Beezer, Richard C. Tallman, and Milan D. Smith, Jr., Circuit Judges.
Opinion by Judge Milan D. Smith, Jr.
Plaintiff-Appellant Kam-Ko Bio-Pharm Trading Co., LtdAustralasia (Kam-Ko) successfully sued Defendants- Appellees Mayne Pharma (USA) Inc. (Mayne) in district court to compel arbitration before the International Chamber of Commerce (ICC). A short time later, however, Kam-Ko filed a new lawsuit in district court seeking a declaration that the ICC's $220,000 advance arbitration fee was so high as to be substantively unconscionable under the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-16, and Washington law. The district court rejected Kam-Ko's argument and, when the parties failed to comply with its directive to proceed with arbitration within sixty days, dismissed Kam-Ko's declaratory relief action with prejudice. Given the entirely commercial nature of this dispute, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Kam-Ko is a Washington company that assisted other companies in securing distribution deals in the Pacific Rim for anti-cancer drugs produced by NaPro BioTherapeutics, Inc. (NaPro). Kam-Ko provided its services to help Mayne's alleged predecessor-in-interest obtain a distribution deal with NaPro in exchange for an agreement (Royalty Agreement) that required an up-front payment of $50,000 and a seventeen-year royalty equal to 5% of the bulk price paid to NaPro. During contract negotiations, Kam-Ko proposed a process for dispute resolution, and its draft language was included, unaltered, as paragraph six of the Royalty Agreement:
Any disputes will be settled by binding arbitration under an outside committee of three attorneys acceptable to both parties, under terms of International Chamber of Commerce arbitration guidelines, in Vancouver, B.C., Canada, should such dispute not be resolved within 30 days between the parties. The losing party will pay the cost of such arbitration.
B. Disputed Termination of Royalty Agreement and Kam-Ko's Subsequent Action to Compel Arbitration
In December 2003, Mayne informed Kam-Ko that the Royalty Agreement was terminated because Mayne had purchased NaPro and believed this acquisition relieved Mayne of any obligations to continue making payments. Kam-Ko replied that the purchase did not relieve Mayne of its obligation to pay, and that if the parties were unable to reach an agreement on the matter within thirty days, Kam-Ko would seek to compel arbitration under paragraph six of the Royalty Agreement. Mayne did not reply, and Kam-Ko filed suit in the district court to compel arbitration. ...