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Flex-N-Gate Corp. v. Wegen

December 29, 2008

FLEX-N-GATE CORPORATION, AN ILLINOIS CORPORATION, PLAINTIFF,
v.
GERHARD WEGEN, A CITIZEN OF GERMANY, DEFENDANT.



Opinion and Order

Plaintiff Flex-N-Gate Corporation ("FNG") is an Illinois corporation with its principal place of business in Urbana, Illinois. Compl. ¶ 1. It brings this action on claims arising from defendant's alleged unauthorized disclosure of confidential information while chairman of a German arbitral tribunal that is presiding over a dispute between plaintiff and a German entity.

Defendant moves to dismiss the complaint for forum non conveniens and under Fed. R. Civ. P. 12 for lack of personal jurisdiction and failure to state a claim upon which relief can be granted. FNG cross-moves for leave to seek early discovery.

I. BACKGROUND

A. THE GERMAN ARBITRATION

On May 2, 2004, FNG entered into a Sale and Purchase Agreement (the "SPA") to acquire a German tier one automotive supplier ("Seller"). Id. ¶¶ 8, 9. The SPA provides for disputes to be referred to arbitration. Id. ¶ 10.

A dispute under the SPA arose between FNG and Seller, id. ¶ 11, and on October 21, 2004, Seller submitted a Statement of Claim against FNG to the German Institute of Arbitration, the Deutsche Institution Für Schiedsgerichtsbarkeit ("DIS"), Wegen Decl. ¶ 2. The arbitration is in Germany, but it is conducted in English. Compl. ¶ 12. It is governed by the DIS Arbitration Rules, id. ¶ 14, which enjoin confidentiality upon the participants.

Defendant Dr. Gerhard Wegen is Chairman of the Arbitral Tribunal. Id. ¶ 13. Dr. Wegen is a German citizen and resident. Wegen Decl. ¶ 1. He is a partner in a German law firm, Gleiss Lutz. Compl. ¶ 2.

On September 15, 2006, the Arbitral Tribunal rendered a partial award, finding FNG liable to Seller for damages, Wegen Decl. ¶ 4, but leaving the amount of damages to be determined.

B. DR. WEGEN'S COMMUNICATIONS WITH DR. MANGOLD

In November 2007, FNG and Seller began to consider using mediation to resolve their dispute, and they discussed this with the Arbitral Tribunal. Weimann Decl. ¶ 6. Dr. Wegen suggested that the Arbitral Tribunal would consider the names of potential mediators and identify a specific candidate. Id. ¶ 7.

The Arbitral Tribunal concluded that Dr. Klaus Mangold*fn1 would be a suitable mediator. Wegen Decl. ¶ 8. Dr. Mangold is a German citizen and resident. Id. Dr. Wegen thereafter sought to contact him about serving as mediator.

On December 3, 2007, Dr. Wegen attempted to call Dr. Mangold at his office in Stuttgart, Germany, but he was unavailable. Id. ¶ 9. On December 10, 2007, Dr. Mangold's secretary gave Dr. Wegen his mobile phone number and stated that he could be reached on December 12 or 13, 2007, from 1:00 to 3:00 p.m. New York time. Id. ¶ 10.

On December 12, 2007, Dr. Wegen called Dr. Mangold on his mobile phone. Id. ¶ 12. At that time, both men were in New York separately and on matters unrelated to this action. Id. ¶ 11. Dr. Wegen disclosed the identities of FNG and Seller as parties to the arbitration so that Dr. Mangold could check for conflicts. Id. ¶ 13. The conversation was in German. Id. ¶ 14.

On December 16, 2007, Dr. Wegen and Dr. Mangold had a second telephone conversation, when they were both back in Germany. Wegen Supp. Decl. ¶ 1. Dr. Mangold told Dr. Wegen that he thought he had no conflicts in acting as mediator. Compl. ¶ 24.

On December 17, 2007, Dr. Wegen sent a letter to FNG's and Seller's arbitration counsel in Germany and Timothy F. Graham, FNG's Vice President, Secretary, and General Counsel in Lakeshore, Ontario, Canada. Id. ¶¶ 6, 25; see Kremer Decl. Ex. 1. Graham is a Canadian citizen. Compl. ¶ 6. Dr. Wegen stated that the Arbitral Tribunal had selected Dr. Mangold as a proposed mediator and that he had been contacted and had no conflicts. Kremer Decl. ¶ 4.

On December 21, 2007, FNG submitted an objection to Dr. Mangold as mediator, Compl. ΒΆ 27, and Dr. Wegen thereafter ...


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