## Facts

- Henri Courier de Méré, a French inventor, owned patents relating to electronic ballasts and entered a written marketing contract with Ishwar D. Jain, an Indian citizen.
- The contract included an arbitration clause providing that disputes “may only be presented to an arbitrary commission applying French laws.”
- The clause did not specify the location of arbitration or any method for selecting arbitrators.
- With Jain’s assistance, De Méré later licensed the patents to Motorola Lighting, Inc. (Illinois), and paid Jain $25,000 described as 10% of the first advance royalty payment.
- Jain claimed additional compensation was owed under the marketing contract; De Méré refused further payment.
- Jain demanded arbitration in Illinois under the American Arbitration Association (AAA) rules; the AAA selected an arbitrator and set a hearing.
- De Méré objected to arbitration in Illinois and to the AAA’s appointment, asserting the contract required arbitration in France.
- Jain petitioned the Northern District of Illinois to compel arbitration under the Federal Arbitration Act (FAA) and the New York Convention; the district court found jurisdiction but denied relief, concluding it lacked authority because the clause omitted forum and appointment terms.

## Issues

1. Whether, under the FAA and the New York Convention, a federal court may compel arbitration in its own district when an international arbitration clause is silent on the place of arbitration.
2. Whether the court may appoint an arbitrator under the FAA when the agreement provides no method of selecting arbitrators.
3. Whether the parties’ foreign citizenships and the clause’s reference to “applying French laws” prevent a U.S. court from compelling arbitration and filling procedural gaps.

## Decision

- The Seventh Circuit reversed and remanded.
- The court held that the FAA and the New York Convention empowered the district court to compel arbitration in the district where the petition was filed despite the agreement’s silence on arbitral forum.
- The court held that FAA § 5 authorized the district court to designate and appoint an arbitrator because the contract failed to specify a selection method.
- The court treated the clause’s reference to French law as a governing-law direction, not a requirement that arbitration occur in France.

## Legal Principles

- FAA Chapter 1 provisions, including §§ 4 and 5, apply in Convention cases to the extent they are not inconsistent with the New York Convention.
- Under FAA § 4, when an arbitration agreement does not specify a place of arbitration, a federal court may compel arbitration within its own district where the petition is filed.
- Under FAA § 5, when an arbitration agreement lacks an arbitrator designation or a method for selecting arbitrators, the court may (and must, upon proper application) designate and appoint an arbitrator.
- An arbitration clause requiring application of foreign law can be enforced through arbitration compelled in a U.S. forum, with the arbitrator directed to apply the chosen substantive law.

## Conclusion

The Seventh Circuit held that an international arbitration clause is enforceable under the FAA and the New York Convention even when it omits the arbitral forum and the arbitrator-selection method; in that situation, a federal court may compel arbitration in its district and appoint an arbitrator while honoring the clause’s choice of governing law.


Jain v. De Méré, 51 F.3d 686 (7th Cir. 1995)