To all: Just reread my post to olddog and have concluded it was poorly written. So, I am going to try again and please remember that it dangerous when lawyers try to talk in generalities. Also remember that we have many excellent lawyers on this board who I hope will chime in and help me if this is too general.
So generally, "choice of law" is a very complicated subject which is what a Court must do when it has parties from different states or nations before it and when those parties have a dispute which in our case centers around a contract (Patent License Agreement) The Court must decide what law(s) it must apply in the case before it. In Fed. Ct, the Court being a Federal Court applies the Federal Rules of Civil Procedure on procedural issues and usually applies the law of the State in which it sits if the dispute involves State law and the Federal laws when it is a Federal question. It gets more complicated when the Defendant is a sovereign nation and wants different nation's laws applied. You even get into arguments as to whether or not we can even force Nok to trial in the US or enforce our Court's judgments upon them.
So going back to our case, NOK and IDCC agreed to arbitrate their differences and since both countries were signatories to the arbitration convention, they agreed to be bound by the decision of the ICC panel. But, the PLA contained a paragraph stating that the laws of New York would apply. So NOK argues that New York law doesn't allow punitive damages and that the arbitration rules which allow punitive damages shouldn't control.
They then contend that since prejudment interest wasn't in the PLA, the award of such is punitive. They also argue that the loss of the discount is punitive.
What Mastrobuono did was recognize that there was a division between the Fed Appellate Courts over the issue of whether or not an arb panel could award punitive damages when the substantive law of the State where the Court sits doesn't allow such and the PLA contract says to apply that law. Hence they granted the cert. petition to hear the arguments pro and con.
After hearing arguments and looking at the various state laws and appellate decisions stating punitive damages couldn't be recovered, the SCt decided that the arbitration rules regarding punitive damages would be the law of the land and not the various states laws. The court thus found that there was no conflict between the State Law not allowing punitive damages and the arbitration rules which do.
Hope this is a little clearer even though it is very general.
IMO Ghors
