## Facts

- Fuller Co., a Pennsylvania corporation, contracted with Compagnie des Bauxites de Guinée (CBG), a Delaware corporation operating a bauxite facility in Guinea, to design, manufacture, and sell a drying and calcining plant and related equipment for use in Guinea.
- The equipment was to be manufactured in the United States and shipped F.O.B. Philadelphia, while installation, testing, and acceptance were contemplated to occur at the Guinea site.
- CBG retained a Belgian consulting engineer, Société de Traction et d’Electricité S.A. (Tractionel), to supervise aspects of performance and acceptance.
- Tractionel issued draft provisional acceptance certificates in 1974 containing reservations about alleged equipment defects; Fuller refused to sign.
- At a January 28, 1975 meeting in Pittsburgh, Fuller asserted the parties reached a final settlement of all disputes; CBG asserted no final settlement was reached and that discussions were limited to acceptance-certificate issues.
- CBG later demanded ICC arbitration seeking indemnification for costs allegedly caused by defects; Fuller asserted the alleged January 28 settlement as a defense.
- Fuller filed a state-court declaratory judgment action to bar arbitration based on the alleged settlement; CBG removed the case to federal court and moved to compel arbitration and stay or dismiss the judicial action under the New York Convention and the FAA.

## Issues

1. Whether the court had subject-matter jurisdiction under 9 U.S.C. § 203 (New York Convention) where both parties were U.S. corporations but the contract contemplated substantial performance abroad.
2. Whether the parties’ ICC arbitration clause fell within the Convention and required arbitration of the dispute.
3. Whether the existence and effect of the alleged January 28, 1975 settlement was for the court to decide or for the arbitrators.

## Decision

- The court held it had jurisdiction under the New York Convention because the contract was commercial and sufficiently related to a foreign state due to contemplated performance in Guinea.
- The court construed the arbitration clause broadly and ruled that the controversy, including the settlement defense, was within the scope of arbitrable disputes.
- The court ordered the parties to proceed to ICC arbitration and stayed the federal court action pending arbitration.

## Legal Principles

- An arbitration agreement between U.S. entities may fall under the New York Convention when the underlying commercial relationship reasonably relates to a foreign state, including when the contract contemplates significant performance abroad.
- When contract language is ambiguous regarding foreign performance relevant to Convention coverage, a court may consider extrinsic evidence to determine whether the relationship is sufficiently international.
- Broad “arising out of or relating to” arbitration clauses presumptively cover contract-performance disputes and closely connected defenses, including alleged settlements tied to the underlying controversy.
- Once the court determines the parties agreed to arbitrate the subject matter, procedural and merits-linked questions bearing on disposition are generally for the arbitrators; doubts about arbitrability are resolved in favor of arbitration, particularly in international commercial disputes.
- A stay of parallel judicial proceedings is appropriate to avoid duplicative litigation and inconsistent outcomes where arbitration is compelled.

## Conclusion

The court exercised Convention jurisdiction based on the contract’s contemplated foreign performance and enforced the parties’ ICC arbitration clause, sending the dispute—including the contested settlement defense—to arbitration and staying the declaratory judgment action.


Fuller Co. v. Compagnie des Bauxites de Guinée, 421 F. Supp. 938 (W.D. Pa. 1976)