Summary
The Seventh Circuit affirmed a district court judgment confirming a foreign arbitral award in favor of Generica Limited against Pharmaceutical Basics, Inc. The court held that the arbitrator’s limitation on cross-examination did not deny Pharmaceutical Basics a fundamentally fair hearing under Article V(1)(b) of the New York Convention because the party had ample other evidence and opportunities to present its case. The court also denied Generica’s request for appellate attorneys’ fees.
Topics
Practice areas
Questions Presented
- Whether the arbitrator's limitation of Pharmaceutical Basics' cross-examination of Tony Hynds deprived Pharmaceutical Basics of a fundamentally fair hearing and rendered the foreign arbitral award unenforceable under Article V(1)(b) of the New York Convention.
- Whether the district court properly confirmed the foreign arbitral award under the New York Convention.
Holdings
- The arbitrator's limitation of further cross-examination of Tony Hynds did not deprive Pharmaceutical Basics of a meaningful opportunity to be heard or violate due process because Pharmaceutical Basics was able to present its theory through other evidence, and the arbitrator reduced or eliminated any potential prejudice from Hynds's direct testimony.
- The district court properly confirmed the foreign arbitral award because Pharmaceutical Basics failed to establish a Convention ground for refusing enforcement.
Key quotations
“An "arbitrator is not bound to hear all of the evidence tendered by the parties.... [H]e must give each of the parties to the dispute an adequate opportunity to present its evidence and arguments."” (paragraph 34)
“For the reasons presented, the judgment of the district court is affirmed. Generica's request for attorneys' fees pursuant to Federal Rule of Appellate Procedure 38 is denied.” (paragraph 38)
Factual background
Generica and Pharmaceutical Basics entered into an agreement concerning the development, manufacture, regulatory approval, and marketing of clomiphene citrate. After Pharmaceutical Basics declined to submit the product's ANDA without reformulation and a new bioequivalence study, Generica initiated ICC arbitration, alleging breach and repudiation. During the arbitration, the arbitrator limited further cross-examination of Generica's witness Tony Hynds concerning Athlone's manufacturing practices but allowed Pharmaceutical Basics to present the same theory through batch records, expert testimony, and its own production evidence.
Procedural history
An ICC arbitrator found that Pharmaceutical Basics had breached and repudiated its agreement with Generica and awarded Generica damages and costs. The district court confirmed the foreign arbitral award and denied the petition to vacate. The Seventh Circuit affirmed the judgment and denied Generica's request for appellate attorney fees under Federal Rule of Appellate Procedure 38.