• a binding and enforceable agreement was ever entered into between OWL and TOS;
• the arbitration clause by itself is binding and enforceable and
• as a choice of law question, New York law should govern.
• The parties have briefed the issues and supplemented their submissions with case law and arguments at the October 15, 2013 hearing.
I think that we do have a disconnect in the way that we see where we stand.
I think that the history is actually welt documented in what the panel has in writing, as opposed to the way that Mr. Foley just described it, which I think was not entirely comprehensive in terms of what has taken place from the beginning to now.
In particular, what I would say is I think that we fundamentally disagree about what we have agreed to do.
I think in a big picture way what we can say is we have agreed to arbitrate disputes between the parties, as opposed to going to court to contest any issues, including arbitrability, choice of law, validity of the agency agreement, and so on.
In terms of this panel having to determine its own jurisdiction, I don't even think that is a live issue, I think that the parties have, in fact, agreed to waive objections in that regard, at least that is how we came to agree, or we believe we came to agree on this proceeding.
Before this panel is a whole host of issues, some of which Mr. Foley has laid out.
I think probably the most primary issue is whether or not this agency agreement is valid and binding. That was, in fact, an issue that my client raised, that TOS raised, from the beginning of my involvement in the case anyway. In particular, as he mentioned, this goes to, I think, a very critical issue, which is the authority of the signatory on OWL’s behalf to the agency agreement, and that was a person he named named Cord Bruegge.
I think that at this point it is very important for the panel to appreciate the OWL entities.
Mr. Foley spoke of them almost in the singular, and, in fact, that are multiple OWL entities.
Mr, Bruegge did not work for the claimant in this proceeding. Mr. Bruegge did not work for the company, the OWL company that is a party to that agency agreement.
Mr. Bruegge worked for a subsidiary company, which I will call OWL GmbH, for short.
He has testified by affidavit, and will testify before this panel, that he did not have specific authority to sigri that agreement on OWL's behalf.
So there is a very real issue as to whether or not that agreement was validly executed at the time it was made.
I don't think there is any question that the parties performed pursuant to the terms of the agreement, but the question is whether that agreement, and specifically the arbitration clause, is valid.
That is the real issue that we have raised.
There is no doubt that the parties performed in accordance with the general terms of what was written in the agency agreement.
The question is, is that agency agreement valid and binding, and is the arbitration clause, as a subset of that question, binding.
I think the nuance to the question of that has been raised on our side is regardless of whether or not the agency agreement itself is void or voidable, then there is a subset of that question, which is, is the arbitration agreement enforceable, and that was an issue, of Austrian law which we submitted an expert affidavit on, they submitted an expert affidavit on, and I think that the real key to that issue being raised isn't the question of arbitrability - and I have said, we have agreed to arbitrate - but the question realty goes to choice of law.
That is an issue that I tried to crystallize in our response submission as being the real central issue for the panel, what law if going to apply.
I think in very broad terms we both agree that that is an issue the panel has to decide.
I think that Mr. Foley is arguing it from the standpoint that the agency agreement is valid, and the arbitration clause is, therefore, valid, and that applies New York law, and, therefore, New York law must govern.
We see it differently, that if, A, the agency agreement itself is void, then there is no arbitration agreement, but even if that agency agreement is valid, for whatever reason, if, under Austrian law, there is a legal principle that the person signing the agreement did not have authority to bind the parties to make an agreement on arbitration, then we are back in the same position that I mentioned before, which is, we had an agreement as to the terms of the agency relationship, but no choice of law.
I think this panel has to decide, is it Austrian law or is it New York law on that question, and that will drive the resolution of the substantive claims that are being presented to the panel.
That is, I think, how we got to the point where we are at today with respect to the threshold issue that the panel needs to decide.
As I see it, and as I think we put it in our response brief, we see this as an ad hoc arbitration proceeding.
In other words, the parties have disputes as to arbitrability. There was a lot of back and forth in writing between. Mr. Foley and myself prior to Mr, Devine's involvement, and probably prior to your involvement, Mr. Arnold, as to how this proceeding was to unfold.
I think that the net upshot of all of that is that we decided to set those disputes to the side by making an ad hoc agreement.
I think, if I heard Mr. Foley correctly, what he is suggesting is that the parties appointed the individual arbitrators - Mr, Mqrtowski before Mr. Devine, and. Mr. Loh pursuant to the agency agreement - and then only made an ad hoc agreement on appointing a chairperson, and I don't think that that is what the letters reflect.
I submitted that correspondence as part of our response submission, so they are before the panel as exhibits tour response memorandum, and I think they speak for themselves as to what the parties agreed to do.
I think that is the issue, as I would frame it, for the panel to decide as a threshold question.
This issue as to whether or not the case he has handed you as the first panel exhibit is determinative realty, I think, is counter-balanced by our view that if you look at simple choice-of-law issues, if you don't find that the agency agreement is enforceable, or that the arbitration agreement is not enforceable, which contains the law and jurisdiction clause, you then have to do to a choice-of-law analysis.
On a totality of the circumstances of this dispute, there is very little connection to New York and these parties in this dispute.
The only connection really is OWL, the parent company, their presence in New York.
The rest of the dealings happened in Europe. They were for agency services to be provided in Europe, agency services that were, in fact, provided in Europe, and we think under the restatement of conflict of laws that we have appended to our response submission, that if you apply those factors, there is no doubt that Austrian law should govern the dispute between the parties.
Those are the threshold issues.