Originally from ICDR Awards and Commentaries - Volume 2

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COMMENTARY

ICDR CASE NO. 518-11

The Award in ICDR Case No. 518-11 resolves a dispute over the termination of a licensing agreement for irremediable breaches including the Respondent’s disclosure of the Claimant’s proprietary technology and confidential information to third parties. The decision reveals a rare example of a contractual choice of non-national rules of law to govern the merits of a dispute (here, the UNIDROIT Principles),  and is of procedural interest because of requests for emergency and interim relief and the admissibility of an affidavit of a witness who failed to appear for cross-examination. The Award is also notable for its analysis of: (i) whether the Claimant engaged in “self-help” that violated the arbitration provision; (ii) damages for the loss of future royalties and the diminished value of research and development; and (iii) indemnification for attorneys’ fees.

I. Background Facts

On July 20, 2007, the Parties entered into an agreement granting the Respondent an exclusive twenty-year license in the United States and Canada to use the Claimant’s proprietary system, including software, hardware and processes (the “Licensed Technology”), for the manufacture and sale of certain custom products (the “Licensing Agreement”).  In 2011, they entered into an Amended and Restated Licensing Agreement that provided for additional intellectual property to be developed by the Claimant in accordance with a Record of Agreement executed in March 2010.