Originally from Dispute Resolution Journal

INTERNATIONAL-ANTITRUST-ARB ITRATlONNON COMPETITION CLAUSE

A broad arbitration clause contained in a stockholders' agreement purporting to require arbitration of antitrust claims was unenforceable. Stendig International, Inc., held an exclusive United States distributorship to market furniture manufactured by B. & B. ltalia, S.p.A. When B. & B. declined to renew the distributorship, Stendig claimed that it was entitled to restrain B. & B. from distributing in the United States under a noncompetition clause contained in a stockholders' agreement between Stendig, its 70 percent shareholder and president, and B. & B., which held the remaining 30 percent of Stendig. B. & B. announced its intention to distribute its furniture in the United States, argu ing that the noncompetition clause, which appeared to prevent it from entering the United States market until the year 2050, violated federal antitrust law. Stendig moved to compel arbitration and to enjoin B. & B. from competing pending arbitration, whereupon B. & B. crossmoved to enjoin arbitration. The court granted B. & B.'s cross-motion, citing the Second Circuit rule in American Safety Equipment Corp. v. }. P. Maguire & Co., 391 F.2d 821 (1968), that the right to a judicial determination of antitrust claims may not be waived contractually. While the court noted that the Second Circuit's reasoning had been questioned by the U.S. Supreme Court in Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 105 S. Ct. 3346 (1985), it nonetheless concluded that American Safety had not been overruled and held that the arbitration clause was invalid . Stendig International, Inc. v. B. & B. ltalia, S.p.A., 633 F. Supp. 27 (S.D.N.Y. 1986).