Here's the Swiss Arbitral Tribunal's Terms of Reference, as text, thanks to MDT. It's what the parties and the arbitrators signed last October, in which are set out the rules of the road for the arbitration. Also, each of the parties sets forth a summary of its case. The arbitrators don't sign off on that. They just accept it as the outline of each side's presentation. Think of it as kind of the equivalent of a complaint and answer in a US lawsuit. This document is Exhibit D [PDF], attached to the Affidavit of Felix Imendoerffer, SUSE's legal counsel, in support of SUSE's Special Opposition to SCO's attempt to have the bankruptcy court stay the arbitration. His affidavit tells us that since this was signed, Phase I of the arbitration went forward and the arbitrators decided against SCO and dismissed its jurisdictional objections. So, when you read that part of the document, know that SCO lost on the attempt to avoid the arbitration in Switzerland, and that is why SUSE shows the document to the court and lets it know that SCO is jurisdictionally "owned", so to speak, by Switzerland and the arbitration there. Also here's Oracle's Request for Special Notice [PDF]. It would like a copy of everything sent to it too.
Oracle is asking for notices under Bankruptcy Code 2002(a). That reminds me. Some of you are shareholders. The rules on that are a litle squishy. In some cases, you get to get notices if the court agrees; in others, you only do if a committee of equity security holders is set up, as the Notes on Rule 2002 explains: Subdivision (d) relates exclusively to the notices given to equity security holders in chapter 11 cases. Under chapter 11, a plan may impair the interests of the debtor’s shareholders or a plan may be a relatively simple restructuring of unsecured debt. In some cases, it is necessary that equity interest holders receive various notices and in other cases there is no purpose to be served. This subdivision indicates that the court is not mandated to order notices but rather that the matter should be treated with some flexibility. The court may decide whether notice is to be given and how it is to be given. Under § 341(b) of the Code, a meeting of equity security holders is not required in each case, only when it is ordered by the court. Thus subdivision (d)(2) requires notice only when the court orders a meeting. At least one shareholder asked for notices and is receiving them, so either nobody noticed or nobody cared that there is no equity security holder committee set up. That's 2002(d), though, and Oracle is asking for notices under (a), as a creditor.
Every company and every law firm has its own style. You may remember Oracle's style from the hilarious SCO subpoena runaround in SCO v. IBM. Oracle is nothing if not thorough and precise, as you saw in their Motion to Quash the subpoena SCO sort of tried to serve on them, in which Oracle one by one pointed out all the procedural and technical defects in the SCO subpoena, like the subpoena allegedly issuing from the District of California, when there isn't any such district. My favorite sentence in the motion: "SCO should not be permitted to impose such slapdash discovery requests on nonparties at the very end of discovery, after it has had years to obtain the information in a more orderly fashion." And indeed, the court ruled that Oracle was not obliged to respond to the subpoena or be deposed. And you see that same Oracle carefulness here. Note this language, the first time we've seen it in this bankruptcy: Neither this Request for Special Notice nor any subsequent appearance, pleading, claim or suit is intended or shall be deemed to waive Oracle's and/or Oracle Credit Corporation's (i) right(s) to have final orders in non-core matters entered only after de novo review by a district judge; (ii) right(s) to trial by jury in any proceeding so triable herein or in any case, controversy or proceeding related hereto; (iii) right(s) to have the reference withdrawn by the United States District Court in any matter subject to mandatory or discretionary withdrawal; or (iv) other rights, claims, actions, defenses, setoffs or recoupments to which Oracle and Oracle Credit Corporation are, or may be, entitled under agreements, in law, or in equity, all of which rights, claims, actions, defenses, setoffs, and recoupments expressly are reserved. As you can see, Oracle is careful to preserve all the rights it thinks it might need, even ones it has already under case law, an example of careful lawyering, crossing every T and dotting the I's so there are no nasty surprises down the road. That is, by the way, one of the things I look for in a lawyer, the guy who tries to think of all possibilities, relies on no one's good will, and works to either avoid or ameliorate all conceivable issues. Finally, you have got to see this video, part of a series from an interview with Mark Webbink, who was Red Hat's first general counsel and then deputy general counsel for intellectual property, who just recently retired. He's now teaching at Duke and is on the board of the Software Freedom Law Center. I put it in News Picks, but I wanted to make sure it's part of our permanent collection. He talks about patents and the history of software patents, and he provides a clue as to why he thinks Microsoft suddenly fell in love with them: patents are a legal monopoly. In short, he views it as Microsoft's workaround after the US Justice Department began its antitrust proceedings against it.
*****************************************
INTERNATIONAL
CHAMBER OF COMMERCE
INTERNATIONAL
COURT OF ARBITRATION
ICC Case No: 14320
SUSE
LWX GmbH
(Germany)
Claimant
- and -
THE
SCO GROUP, INC.
(USA)
Respondent
TERMS
OF REFERENCE
The
Arbitral Tribunal:
Roberto
Dallafior
Yves
Derains
Toby
Landau (Chairman)
TERMS
OF REFERENCE
Pursuant
to Article 18 of the Rules
of
the International Court of Arbitration of
the
International Chamber of Commerce,
effective
as of 1st January 1998: "The ICC Rules"
I -THE FULL NAMES AND DESCRIPTIONS OF THE PARTIES
[Article 18(l)(a)]
1. Claimant:The Claimant is SUSE LINUX GmbH ("SUSE"), a company
incorporated and
existing under the laws of Germany, and specializing in the Linux
operating system business. It is the legal successor of SuSE Linux
AG, and (since January 2004) a 100% indirectly owned subsidiary of
Novell, Inc. ("Novell"), a Delaware corporation
headquartered in Massachusetts, USA. SUSE's registered office and
contact details are as follows:
SUSE
LINUX GmbH, [address]
Attention:
Felix Imendorffer
[telephone, Fax]
2. Respondent:
The Respondent is The SCO Group, Inc. ("SCO"), a
company incorporated
and existing under the laws of Delaware. It is a provider of
software technology to businesses, and is the legal successor to
Caldera International, Inc. Its registered office and contact
details are as follows:
The
SCO Group, Inc., [address]
Attention:
Mr Andy Nagle / Mr Darl McBride
[telephone, Fax]
3. Terminology:
The Claimant and Respondent are each referred to in these Terms of
Reference
as a "Party", and collectively as "the Parties".
2
II. THE
ADDRESSES OF THE PARTIES TO WHICH NOTIFICATIONS OR COMMUNICATIONS
ARISING IN THE COURSE OF THE ARBITRATION MAY BE MADE
[Article 18(l)(b)]
4. Claimant:
In
this arbitration, SUSE is represented, under Powers of Attorney
dated 6 April 2006 and 7 April 2006, by: Morrison
& Foerster LLP, [address]
Attention:
(1) Michael A. Jacobs, Grant L. Kim, Kenneth W. Brakebill
[telephone, fax, email]
(2) Homburger
Rechtsanwälte, [address]
Attention:
Georg Rauber, Felix Dasser, David Rosenthal
[telephone, fax, email]
5. Respondent: In
this arbitration, SCO is represented, under Powers of Attorney dated
17 October 2006, by: (1) Boies
Schiller & Flexner LLP, [address]
3
Attention:
Jonathan D. Schiller, William A. Isaacson [telephone, fax, email]
(2)
Boies
Schiller & Flexner LLP, [address] Attention:
Stuart H.Singer,
William T. Dzurilla [telephone, phone, fax]
(3) Lenz
& Staehelin, [address] Attention:
Dr. Paolo Michele Patocchi [telephone, fax, email]
6. Communications:
Notifications or communications arising in the course of this
arbitration are to be made to the above representatives.
7. Communications
between the Parties and the Arbitral Tribunal shall be by email to
all of the above, and confirmed in hard copy by fax or courier to
the following: (1)Grant
L. Kim of Morrison & Foerster LLP; (2)
David
Rosenthal of Homburger Rechtsanwälte;
(3) William
T. Dzurilla of Boies Schiller & Flexner LLP;
(4) Dr.
Paolo Michele Patocchi of Lenz & Staehelin.
4
8. Communications
shall be deemed to be timely if sent by email by the due date at the
place of sending, with a confirming copy sent by fax or courier by
the following day.
9. Copies
of all communications between the Parties and the Arbitral Tribunal
shall be copied to the Secretariat of the ICC International Court of
Arbitration.
III. THE ARBITRATORS' FULL NAMES, DESCRIPTIONS AND ADDRESSES[Article
18(l)(e)]
10. The
Arbitral Tribunal comprises:
(1) Dr.
Roberto Dallafior, nominated
by SUSE and confirmed as arbitrator by Secretary
General of the ICC International Court of Arbitration pursuant to
Article 9(2) of the ICC Rules on 19 June 2006, and whose address
is: [address, telephone, fax, email]
(2) Yves
Derains, nominated by SCO and confirmed as arbitrator by the
Secretary General
of the ICC International Court of Arbitration pursuant to Article
9(2) of the ICC Rules on 19 June 2006, and whose address is:
[address, telephone]
5
[fax, email]
(3) Toby
Landau, jointly
nominated by the two arbitrators and confirmed as Chairman by the
Secretary General of the ICC International Court of arbitration
pursuant to Article 9(2)
of the
ICC Rules on 28 August 2006, and whose address is: [address, telephone, fax, email]
IV. SUMMARY
OF THE PARTIES' RESPECTIVE CASES AND RELIEF SOUGHT [Article
18(l)(c)]
11. A
summary of the Parties' respective claims and defences is set out
below in order to satisfy
the requirements of Article 18(l)(c) of the ICC Rules. Sections IV(1)
and IV(2)
below
have been prepared and drafted by each party unilaterally, and do
not reflect or contain any expression of acquiescence on the part of
the other party or the members of the Arbitral Tribunal.
12. This
summary is subject to further submissions, and to Article 19 of the
ICC Rules. As such, it is not intended as an exhaustive or
definitive statement, and nor is it to be taken as foreclosing the
making of arguments or the introduction of evidence not expressly
referred to therein. 13.
Subject
to the ICC Rules and the rules of procedure applicable to the
arbitration, the Arbitral Tribunal shall have power, on application
by any party, to
allow amendments to
6
the pleadings and written memorials on such
terms, if any, as the Arbitral Tribunal may deem appropriate.
(I)
Claimant's Summary
14. The
Claimant summarises its claims and the relief it seeks as follows:
i.
Jurisdiction
15. Article
9 of the Master Transaction Agreement ("MTA") and Article
12 of the Joint Development
Contract ("JDC") require "[a]ny differences or
disputes arising from" the MTA or JDC, or "from contracts
regarding its performance," to be resolved by ICC arbitration.
SUSE seeks to enforce its rights under the MTA and JDC and to obtain
relief from SCO's breach of these contracts. SUSE's claims arise
from the MTA and the JDC.
16. Therefore,
the Arbitral Tribunal has jurisdiction to adjudicate these claims.
17. In
contrast, there is no jurisdiction over SCO's counterclaims relating
to the Asset Purchase Agreement and Technical License Agreement,
because these contracts do not include arbitration clauses and were
not even signed by SUSE.
ii.
Claims
18. In
May 2002, in order to promote the widespread adoption of the Linux
computer operating system
as a standard for the information technology industry, SUSE, SCO
(then Caldera) and two other Linux vendors (Conectiva, Inc. and
Turbolinux, Inc.) agreed to develop a standard version of Linux
called "UnitedLinux." To this end, they entered into the
JDC and the MTA (together, "the UnitedLinux Contracts"),
which form the basis of these proceedings.
7
19. A
fundamental premise of the UnitedLinux project was that SCO, SUSE
and the other UnitedLinux members would have the right to
commercialize the technology in the UnitedLinux Software
independently, free from claims that other members had any
proprietary rights to such technology that could threaten the common
project. This agreement was reflected in the following key
provisions of the UnitedLinux Contracts:
(1) All
intellectual property rights in the UnitedLinux Software shall be
assigned to the UnitedLinux LLC, except for "Pre-Existing
Technology" and "Enhancements."
(2) Each
member shall have a royalty-free license to commercialize the
technology in UnitedLinux,
granted by the other members directly (for "Pre-Existing
Technology" and “Enhancements”) or through the
UnitedLinux LLC (for all other technology).
(3) All
UnitedLinux technology already subject to an "open-source
license" shall remain subject to such license as well. As SCO
knew, the Linux "kernel" was subject to the General
Public License ("GPL"), which required the Linux kernel
and any published modifications thereto to be made freely available
to the public. Thus, SCO agreed that any portions of UnitedLinux
based on the Linux kernel would be released subject to the GPL as
freely available, open source code.
20. Thus,
all of the UnitedLinux Software was available to all UnitedLinux
members by license from the UnitedLinux LLC, direct license from the
members, and/or under the terms of the open source licenses that the
members agreed to apply.
21. Initially,
SCO (then Caldera) strongly supported UnitedLinux, proclaiming that: "Caldera
sees the formation of UnitedLinux as a tremendous benefit to the
industry, to our customers, to our 16,000-member reseller channel,
and to our IHV and ISV partners. Linux and Open Source have already
changed the way software is developed in the new online world.
UnitedLinux now offers a viable business model and creates a
unified
8
environment that will attract many more global business
solutions to Linux enabling far greater adoption and use. Caldera
plans to make Linux not just an alternative OS, but the dominant
choice for businesses worldwide who are wanting to take advantage
of the benefits of online services."
22. In
November 2002, SCO proudly announced the release of SCO Linux 4.0,
"powered by UnitedLinux." However, SCO later changed its
position, asserting that it owned copyrights in UNIX that were
infringed by all Linux
products, including SUSE Linux, and that its UnitedLinux partners
were not licensed to use such alleged copyrights despite the
UnitedLinux contracts.
23. In
line with its new position, SCO began filing and threatening
lawsuits against Linux users, asserting that they were infringing on
SCO's copyrights and demanding that they partake in a licensing
program that SCO had set up. SCO also asserted that SUSE's licenses
under the JDC and MTA Agreements provided no protection to its
customers, suggesting that they were thus equally susceptible to
lawsuits. These statements and lawsuits directly threatened SUSE and
its Linux-based business. Moreover, in proceedings pending in Utah
against Novell -- SUSE's parent company and licensee to SUSE's
intellectual property rights -- SCO alleged that Novell's distribution
of SUSE Linux pursuant to its license from SUSE infringes on SCO's
alleged copyrights.
24. SCO's
actions constitute a clear breach of the plain language and purpose
of the UnitedLinux Contracts. In particular, SCO's assertion of
copyright infringement claims against SUSE Linux is contrary to the
clear terms of the UnitedLinux Contracts, which conferred upon the
UnitedLinux members the right to use "all" intellectual
property in the UnitedLinux "Software." Moreover, SCO's
public attacks on the Linux operating system and withdrawal of
support from the UnitedLinux project have impeded the purpose of the
common UnitedLinux project and caused damage to SUSE and its
business.
25. Accordingly,
SUSE has filed this arbitration to obtain (1) a declaratory judgment
by the Arbitral Tribunal; (2) an order preventing SCO from further
directly or indirectly interfering
in SUSE's business; and (3) compensation for the damages and costs
incurred.
9
26. SCO's
summary of its position in the Terms of Reference purports to assert
what are effectively
counterclaims against SUSE for alleged breach of two agreements
signed in 1995 by the Santa Cruz Operation and Novell. Yet SUSE did
not sign either agreement, which do not include arbitration clauses
in any event. Further, SCO did not include these counterclaims in
its Reply to the Request for Arbitration, as required by Article 5
of the ICC Rules. SCO's counterclaims are defective and should be
dismissed.
iii.
Relief Sought
27. Claimant
SuSE requests that the Arbitral Tribunal award the following relief:
(1) Declare
that SCO is precluded under the MTA and the JDC from asserting any
copyright infringement claims related to SUSE Linux;
(2) Declare,
in particular, that the MTA and JDC divest SCO of ownership of any
alleged intellectual property rights in any part of software
included in the UnitedLinux Software (other than Pre-Existing
Technology and Enhancements);
(3) Order
SCO to refrain from alleging publicly or against third parties that
the use and distribution of SUSE Linux infringes upon SCO's
copyrights, as precluded by the MTA and JDC;
(4) Order
SCO to pay damages in an amount to be determined for breach of the
MTA and
JDC by improperly asserting claims against SUSE and its licensees,
and by attacking and withdrawing support for the UnitedLinux
project;
(5) Dismiss
SCO's counterclaims relating to the Asset Purchase Agreement and
Technical License Agreement;
10
(6) Order
SCO to bear all costs of the arbitration proceeding, including the
costs and expenses of the ICC and of the arbitrators, as well as
attorneys' fees, cost of lost executive time and expert's costs, if
any; and
(7) Award
any further relief that the Arbitral Tribunal deems necessary to
effectuate the relief requested above.
(2)
Respondent's Summary
28. The
Respondent incorporates by reference its "Reply to SuSE Linux
GmbH Request for Arbitration" of 27 June 2006 and summarises
its claims and the relief it seeks as follows:
i.
Jurisdiction
29. SCO
contends that SUSE's claims and requests for relief are
nonarbitrable. The disputes herein are over defenses to and relief
from claims made by SCO against nonparties to this arbitration in US
litigation, which in any event are not "disputes arising from"
the JDC or MTA or "from contracts regarding its performance." 30. The
Tribunal has jurisdiction to hear SCO's counterclaim under the
doctrines of implied consent and set-off.
ii.
Defences / Claims
31. The
UNIX operating system, developed by AT&T's Bell Laboratories in
the mid-1980s, is one of the principal operating systems for
businesses throughout the world. Ownership of the intellectual
property in the UNIX Operating system, including specifically UNIX
System V, is now held by SCO. SCO holds not only certain
intellectual property rights to UNIX source-code, but it also
markets UNIX products, such as Openserver and
11
UNIXWARE.
In the late 1990s, SCO UNIX products had a market share of
approximately
80 percent of the so-called UNIX-on-Intel market, that is, computers
using Intel chips and a UNIX operating system.
32. Linux
is a "free" or "open source" operating system
that has become a major competitor of UNIX. Prior to 2003, when SCO
discovered that some of its proprietary UNIX technology had been
misappropriated into Linux, SCO (formerly known as Caldera
International, Inc.) had distributed Linux and participated in Linux
development efforts, as reflected by its participation in
UnitedLinux. SCO, however, never agreed to allow UnitedLinux to make
use of SCO's UNIX technology, on which SCO depended for 95% of its
revenue.
33. In
November 2003, Novell announced its acquisition of SUSE. Novell at
all times thereafter has had 100% control of SUSE. SCO is involved
in litigation against Novell and others over the misappropriation of
UNIX technology into Linux.
34. Each
of the members of the UnitedLinux LLC (the "LLC") agreed
in the JDC to (1) contribute
certain, clearly specified pre-existing technology
to the project, (2) develop
certain new technology
for purposes of the project, and (3) integrate the foregoing
technologies with existing, open-sourced Linux technology.
35. The
JDC provided that certain specified Pre-Existing Technology (defined
to include only the pre-existing technology listed in Exhibit C) was
to be licensed by each Member to the others and to the LLC. (JDC
art. 8.1.) The contributed, pre-existing technology listed in
Exhibit C does not include the technology over which SCO has
asserted claims against Novell and others. SUSE is improperly
asserting claims and seeking relief with respect to intellectual
property never contributed to the LLC.
36. In
addition, any new, jointly developed technology (as opposed to
pre-existing technology such as UNIX) was to be assigned to the LLC.
(JDC art. 8.2.) However, no Member made any actual assignments of
jointly developed technology to the LLC, and the LLC never made any
assignments to the Members.
12
37. The
intellectual property at issue was not jointly developed. Thus, SUSE
is improperly asserting claims and seeking relief with respect to
intellectual property that was not jointly developed by the LLC.
38. During
the negotiation of the UnitedLinux contracts, SCO discussed with the
other United Linux members the possibility that at some point in the
future SCO might be in a position to contribute some unspecified
UNIX technology to the United Linux project. However, it was made
clear that, if the parties were to agree on any contribution of UNIX
technology to the project, it would need to be the subject of a
subsequent agreement. No such agreement was ever reached.
39. In
addition, when the UnitedLinux agreements were signed in May 2002,
SCO was unaware that its proprietary UNIX: technology had been
misappropriated into Linux. The agreements should not be interpreted
as working an unknowing, implied waiver or forfeiture of rights. 40. Based
on the above, SUSE Claims must be denied because the LLC never
purported to license SCO's UNIX technology to the Members, as SUSE
contends it did.
41. After
the date of its acquisition by Novell, SUSE has continued to
distribute Linux in competition with SCO. This violates the
Technology Licensing Agreement ("TLA") and the Asset
Purchase Agreement ("APA") in effect between Novell and
SCO.
42. In
connection with the acquisition of UNIX technology from Novell,
Novell and SCO's predecessor in interest, Santa Cruz, entered into
the TLA and APA. The TLA licensed back to Novell the UNIX technology
included in the transferred assets for certain purposes, but both
the TLA and the APA contained express non-compete provisions,
whereby Novell covenanted not to distribute the licensed back
technology in (a) any operating system in competition with SCO's
core server products or (b) in any product in which the technology
constitutes a primary portion of the value of the product.
13
43. SUSE
has continued to distribute Linux in violation of these provisions
of the TLA and APA. SUSE has induced Novell to breach these
provisions, interfered with SCO's rights under these contracts,
aided and abetted, conspired, and acted in concert with Novell in
breaching the non-competition covenants and related torts. SUSE has
also taken actions contrary to the interests of its joint venture
partner SCO, in violation of its duty of good faith.
44. Further,
SUSE has no right to enforce the UnitedLinux Agreements because it
abandoned and repudiated them, or abandoned the UnitedLinux project,
or both.
45. In
addition to misinterpreting the relevant contracts, SUSE's requests
for relief are grossly overbroad. SUSE, based on a dispute between
Novell and SCO, improperly
seeks a declaratory judgment and other relief from the Arbitral
Tribunal that would in effect approve the use and distribution of an
operating system that includes misappropriated technologies and is
the subject of multiple pending federal lawsuits on that precise
subject.
iii.
Relief Sought
46. SCO
requests that the Arbitral Tribunal find that the claims asserted by
SUSE are non-arbitrable as they constitute defenses to pending US
litigation claims and are not "claims" arising from the
MTA or JDC.
47. In
the alternative, if SUSE's claims are deemed arbitrable, SCO
requests that the Arbitral Tribunal:
(1) deny
all relief requested by SUSE;
(2) declare
that SUSE's activities violate the non-competition provisions of
the TLA and APA;
14
(3) award
damages to SCO, and
(4) grant
SCO all costs of this proceeding and any further relief that the Tribunal deems appropriate.
(3)
Amount in Dispute
48. The
amount in dispute between the Parties is, as yet,
unquantified, but currently estimated by SUSE (pursuant to Article
18(c) of the ICC Rules) as between US$50 million and US$ 100
million. SCO's counterclaim damages are estimated to be at least US$
10 million.
V
- LIST OF PRINCIPAL ISSUES TO BE DETERMINED [Article 18(1)(d)]
49. The
issues to be determined by the Arbitral Tribunal shall be those
resulting from the Parties' submissions, including forthcoming
submissions, and which are relevant to the adjudication of the
Parties' respective claims and defences.
50. Pending
full written submissions from each party, and taking into account
Article 18(1)(d) of the ICC Rules, it is inappropriate for a list of
principal issues to be drawn up at this stage of the proceedings.
VI
- THE PLACE OF THE ARBITRATION [Article 18(l)(f)]
51. As
provided for in Clause 9.4 of the MTA and Clause 12.4 of the JDC,
the legal place or seat of this
arbitration is Zürich, Switzerland.
52. The
Parties agree that all awards (whether final, interim or partial)
and all procedural orders, directions and instructions, wherever
signed, shall be deemed
as having been made in Zürich, Switzerland.
15
53. It
is agreed that, after consultation with the Parties, and pursuant to
Article 14(2) of the ICC Rules, the Arbitral Tribunal may conduct
any meeting, hearing or examination in such other location as it may
consider appropriate, unless otherwise agreed by the Parties.
VII
- PARTICULARS OF THE APPLICABLE PROCEDURAL RULES AND OTHER
MATTERS
[Article 18(1)(g)]
54. Arbitration
Agreements: These
proceedings have been commenced pursuant to the following
contractual provisions, which are in near identical terms:
(1)
Clause 9 of the Master Transaction Agreement (MTA), dated 29 May
2002, by and between SUSE (then known as SuSE Linux AG); SCO (then
known as Caldera International, Inc.); Conectiva Inc.; and
Turbolinux, Inc. This provides as follows:
"9. Governing
Law; Dispute Resolution
9.1 This
MTA shall be governed by and construed in accordance with the laws
of Switzerland. The United Nations Convention on the International
Sale of Goods shall not apply to this MTA.
9.2 Any
differences or disputes arising from this MTA or from contracts
regarding its performance shall be settled by an amicable effort on
the part of the Parties. An
attempt to arrive at a
settlement shall be deemed to have failed as soon as one of the
Parties so notifies the other Party in writing.
9.3 If
any attempt of settlement has failed, the disputes shall be finally
and exclusively settled under the Rules of Arbitration of the
International Chamber of Commerce then in force (Rules) by three
arbitrators appointed in accordance with said Rules.
9.4 The
place of arbitration shall be Zürich. The procedural law of
this place shall apply when the Rules are silent.
9.5 The
arbitral award shall be substantiated in writing. The arbitral
tribunal shall decide on the matter of costs of the arbitration.
16
9.6 The
arbitration language shall be English.
(2)
Clause 12 of the UnitedLinux Joint Development Contract
(JDC), dated 29 May 2002,
by and between SUSE (then known as SuSE Linux AG); SCO (then known as
Caldera International, Inc.); Conectiva Inc.; Turbolinux, Inc.; and
UnitedLinux, LLC. This provides as follows:
"ARTICLE 12
GOVERNING
LAW; DISPUTE RESOLUTION
12.1 Governing
Law. This JDC shall be governed by and construed in
accordance with the laws of Switzerland. The United Nations
Convention on the International Sale of Goods shall not apply to
this JDC.
12.2 Any
differences or disputes arising from this JDC or from contracts
regarding its performance shall be settled by an amicable effort on
the part of the Parties. An attempt to arrive at a settlement shall
be deemed to have failed as soon as one of the Parties so notifies
the other Party in writing.
12.3 If
any attempt of settlement has failed, the disputes shall be finally
and exclusively settled under the Rules of Arbitration of the
International Chamber of Commerce then in force (Rules) by three
arbitrators appointed in accordance with said Rules.
12.4 The
place of arbitration shall be Zürich. The procedural law of
this place shall apply when the Rules are silent.
12.5 The
arbitral award shall be substantiated in writing. The arbitral
tribunal shall decide on the matter of costs of the arbitration.
12.6 The
arbitration language shall be English."
55. Notwithstanding
the existence of two arbitration clauses, the Parties agree that in
these arbitration proceedings there shall be a single arbitral
tribunal comprising three members.
56. Standing of the Arbitral
Tribunal: For
the purpose of these arbitration proceedings, and without prejudice
to any jurisdictional objections based on the scope of the relevant
17
arbitration agreements or the arbitrability or nature of SUSE's
claims, and any arguments on stay, waiver or abandonment, the
Parties agree that the arbitrators have been properly and validly
appointed, and each Party hereby confirms that it is not aware of
any ground to challenge the appointment of the Arbitral Tribunal or
any of its members.
57. Awards,
Orders, etc: Subject
to the ICC Rules and these Terms of Reference, the Arbitral Tribunal
is authorised to issue such partial awards, interim awards,
procedural orders and other procedural directions or instructions as
it may deem appropriate.
58. Powers of the Chairman: Procedural
orders or other directions or instructions may be signed by the
Chairman alone, on behalf of the Arbitral Tribunal, after
consultation with the other members of the Arbitral Tribunal. In
case of urgency, the Chairman acting alone may extend or modify any
procedural time limit.
59. Language
of the Proceedings: As
provided in Clause 9.6 of the MTA and Clause 12.6 of the JDC, the
language of the proceedings (Article 16 of the ICC Rules) is
English. Documents submitted in any other language shall be
accompanied by a translation into English. Any witness may give oral
evidence in the witness's mother tongue, provided that arrangements
for interpretation to the satisfaction of the Arbitral Tribunal are
made by the party calling that witness.
60. Applicable
Substantive Law: The
relevant contracts contain the following express provisions as to
applicable law:
(1) Clause
9.1 of the MTA:
"9.1
This MTA shall be governed by and construed in accordance with
the laws of Switzerland. The United Nations Convention on the
International Sale of Goods shall not apply to this MTA."
(2) Clause
12.1 of the JDC:
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"12.1
Governing Law. This
JDC shall be governed by and construed in accordance with the laws
of Switzerland. The United Nations Convention on the International
Sale of Goods shall not apply to this JDC."
61. Applicable
Procedural Rules: Clause
9.4 of the MTA and Clause 12.4 of the JDC both contain the following
provision: "The
place of arbitration shall be Zürich. The procedural law of
this place shall apply when the Rules are silent."
62. Article
15(1) of the ICC Rules provides as follows: "The
proceedings before the Arbitral Tribunal shall be governed by these
Rules and, where these Rules are silent, by any rules which the
parties or, failing them, the Arbitral Tribunal may settle on,
whether or not reference is thereby made to the rules of procedure
of a national law to be applied to the arbitration."
63. Article
35 of the ICC Rules provides as follows: "In
all matters not expressly provided for in these Rules, the Court
and the Arbitral Tribunal shall act in the spirit of these Rules
and shall make every effort to make sure that the Award is
enforceable at law."
64. Given
that Clause 9 of the MTA and Clause 12 of the JDC both incorporate
the ICC Rules, and that Articles 15(1) and 35 of the ICC Rules
themselves cater for any "silences" in the Rules, it is
agreed that, subject to any mandatory provisions of Swiss law
relating to an international arbitration with a seat in Zürich, the
procedure to be followed shall be governed by the ICC Rules and
where these rules are silent, as may be determined by the Arbitral
Tribunal in its discretion.
65.
Article
17(3): The
Arbitral Tribunal shall not have authority to act as amiable
compositeur or
to decide ex
aequo et bono in
accordance with Article 17(3) of the ICC
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Rules.
66. Appointment
of Experts: The
Arbitral Tribunal reserves the right, after consultation with the
Parties, to appoint such expert(s) as it may deem advisable to
assist the Arbitral Tribunal, in addition to any experts which the
Parties may choose to present.
67. Changes
in Details: The Parties, counsel and Arbitrators shall notify all Parties, all signatories of these Terms of Reference and the ICC Secretariat of any change of name, description, address, telephone or fax number. In the absence of any such notification, communications sent in accordance with these Terms of Reference shall be valid.
68. Extensions
of Time: The
Parties hereby agree and give consent, in so far as necessary, that
the Arbitral Tribunal may apply to the ICC International Court of
Arbitration for an extension of the time within which their award
must be rendered. Any extension of time granted by the ICC Court
shall be deemed to have the consent of the Parties to the extent the
consent of the Parties may be required under any applicable law.
VIII
- VAT ON ARBITRATORS' FEES
69.
In
light of Article 2(9) of Appendix III of
the ICC Rules, it is agreed that if and to the extent that any of
the arbitrators is required to collect VAT from one or all of the
Parties, such Party or Parties, as determined by the Arbitral
Tribunal, shall pay the amount of such VAT to the arbitrator in
addition to any fees due to him. Each party further undertakes, if
and when required by the Arbitral Tribunal, to pay to the ICC its
share of an advance on VAT as determined by the Arbitral Tribunal.
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These
Terms of Reference have been agreed and duly signed and executed as
follows:
(1)
On behalf of the Claimant _____[signature]_____
Printed
Name: Michael A Jacobs
Signed
on 30 October 2006
(2)
On behalf of the Respondent: ____[signature]
Printed
Name: William A. Isaacson
Signed
on 31 October 2006
(3)
Roberto Dallafior, Co-Arbitrator ____[signature]___
Signed
on 15 October November 2006
(4)
Yves Derains, Co-Arbitrator ______[signature]_______
Signed
on 24 October 2006
(5)
Toby Landau, Chairman:____[signature]____
Signed
on 21 October 2006
[End of Document]
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