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IN RE LLT INT'L INC.
September 24, 1998
In the Matter of the Arbitration Between LLT INTERNATIONAL INC., F/K/A/ LEE, LIU & TONG ADVERTISING, INC., Petitioner, - against - MCI TELECOMMUNICATIONS CORPORATION S/H/A MCI TELECOMMUNICATIONS, INC., Respondent.
The opinion of the court was delivered by: SWEET
Petitioner LLT International Inc., F/K/A Lee, Liu & Tong Advertising, Inc. ("LLT"), has moved to vacate an arbitration award rendered in an arbitration between it and Respondent MCI Telecommunications Corporation, S/H/A MCI Telecommunications, Inc. ("MCI") on November 19, 1997.
MCI has cross moved to confirm the award. For the reasons set forth below, LLT's motion will be granted, the award vacated and the matter remanded to the arbitration panel.
Prior Proceedings and Facts
MCI retained LLT to perform certain services with respect to advertising directed to the Asian market under an agreement entered into on July 6, 1994 (the "Agreement") which contained choice of law and arbitration clauses:
18.1 This Agreement, including all matters relating to the validity, construction, performance and enforcement thereof, shall be governed by the laws of the State of New York without giving reference to its principles of conflicts of laws.
19.1 In the event a dispute shall arise as to the parties' respective rights, duties and obligations under this Agreement, or in the event of a claim for breach of this Agreement by either party, it is Agreed that such disputes shall be exclusively resolved pursuant to binding arbitration under the Commercial Rules of the American Arbitration Association. The Arbitrator shall determine declaratory and compensatory relief as permitted by the terms of this Agreement and shall award reasonable attorney's fees (including in-house counsel fees) and costs to the prevailing party. The decision of the Arbitrator shall be final and shall be entitled to enforcement in any court of competent jurisdiction. This provision shall not be construed so as to prohibit either party from seeking preliminary or permanent injunctive relief in any court of competent jurisdiction.
The term of the contract was one year, renewable annually, and there was a termination clause:
1.1. The term of this Agreement shall be from January 1, 1994 until December 31, 1995, unless terminated earlier pursuant to the provisions of this Agreement. Thereafter, the Agreement shall continue on a year to year basis unless one party provides notice of an intention to terminate at least 60 days prior to the expiration of the current term.
7.1 Either party may terminate this Agreement in the event of a material breach by the other party, provided that such party has given the other party fifteen (15) days written notice of such breach, and the breaching party has failed to cure the breach.
7.2 Either party may terminate this Agreement without cause upon sixty (60) days written notice.
7.3 In the event of termination of this Agreement for any reason, the following shall apply to the compensation provisions of this Agreement:
7.3.1 the quarterly retainer fee paid by MCI shall be prorated to the date of termination and LLT shall remit any excess to MCI within 45 days after termination. Alternatively, MCI may deduct any excess from amounts due LLT. No monthly retainer fees shall be due for the months after termination.
7.3.2 MCI shall pay LLT installation commissions for all new event sales installations submitted prior to the date of termination. Such payments will be made within 30 days after the end of the ...
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