GTE Communication Systems Corporation v. Thomson CSF Telephone, S.A. No. 88 Civ. 0981 (CLB) (S.D.N.Y. July 22, 1988)* – Vol. 1 No. 2

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Author: Hans Smit

Published: June 1990

United States
Applicable Law
Arbitral Awards
Practice and Procedure

Description: This is another case in which most interesting questions were decided in arbitration proceedings that would have remained hidden in the files of the American Arbitration Association if the decision had not been attacked in court. The author of this note served as the single arbitrator selected by the parties. He finds himself in the curious position of appreciating that his decision was attacked in court because it opened the possibility of exposing it to public scrutiny. The circumstance that only the attack in court permits the publication of the decision accentuates once again that international arbitration could make a considerably more important contribution to the development of the law if the awards it produces were routinely published.

Thomson CSF Telephone, S.A., the French claimant, sought damages for an alleged breach of contract for the delivery of specially manufactured equipment, with payment to be made in U.S. dollars. Although the case presented many interesting questions of law and fact, two deserve special mention. The first relates to procedures in international arbitrations; the second to the formulation of appropriate monetary relief in a dispute between parties of different nationalities.

At the first hearing, counsel for the parties, both of whom were American, raised the question of whether the defendant would be entitled to pre-trial discovery. It was clear that discovery on the federal model would have significantly expanded and delayed the proceedings. The arbitrator ruled that pre-hearing discovery would be available, but only with his permission. The parties were directed to prepare detailed pleadings dealing with the facts, both ultimate and evidentiary, and the law. The pleadings had to be accompanied by statements by all witnesses to be offered and copies of all documents to be introduced at the hearing. Allegations of ultimate or evidentiary fact, legal argument, and testmonial documentary evidence not introduced in or with the pleadings would not be taken into consideration except for good cause shown. Only after the pleadings cum annexis had been exchanged would applications for pre-trial discovery be entertained. Although the parties expressed surprise, if not consternation, when confronted by these procedural rulings, they apparently experienced no insurmountable problems in complying with them.

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*Arbitral & Judicial Decisions