Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Supreme Court does not disturb stay of liquor distribution dispute, (Nov 18, 2013)

The U.S. Supreme Court will not review a decision of the U.S. Court of Appeals in Boston staying proceedings brought by Bacardi International Limited (BIL) to confirm an arbitration award under the Federal Arbitration Act against a liquor sub-distributor, V. Suarez & Co., Inc. (VSC) (Bacardi International Ltd. v. V. Suarez & Co., Inc., Dkt. 13-320).

In its petition for certiorari, filed September 9, BIL asked the High Court whether “the First Circuit was free to surrender subject-matter jurisdiction over a motion to confirm a ‘final and binding’ arbitral award brought under Section 9 of the Federal Arbitration Act, 9 U.S.C. §9, by staying the federal proceedings in deference to a parallel state court action, without taking into account the Act’s policies requiring piecemeal litigation to enforce the arbitration agreement.”

The dispute arose out of a decision not to renew a subdistribution agreement between BIL subsidiary Bacardi Caribbean Corporation (BCC) and VSC. The agreement had granted VSC the exclusive right to sell and sub-distribute certain Bacardi-branded products in Puerto Rico. BIL consented to the agreement, as did BC, another Bacardi subsidiary. The agreement included grounds to permit termination for “just cause,” limitations on damages, and provisions for dispute resolution requiring arbitration.

BIL argued in its petition that the First Circuit’s sua sponte order to stay proceedings disregarded Supreme Court precedent, mandating that the Federal Arbitration Act’s policies be weighed against abstention. It also contended that the First Circuit’s order to stay proceedings disregarded the parties’ consent to confirmation under Section 9 of the Federal Arbitration Act, which conflicted with the Supreme Court’s precedents mandating rigorous enforcement of arbitration agreements.

Attorneys: Ricardo F. Casellas (Casellas Alcover & Burgos P.S.C.) for Bacardi International Ltd. Francisco G. Bruno (McConnell Valdes LLC) for V. Suarez & Co., Inc.

Companies: Bacardi International Ltd.; V. Suarez & Co., Inc.

News: FranchisingDistribution