The dispute in Dedon GmbH v. Janus et Cie, No. 10 CIV. 04541 CM, (S.D.N.Y. Oct. 19, 2010), aff'd, 411 F. App'x 361 (2d Cir. 2011) concerned the existence of an exclusive distribution agreement between Dedon, a German furniture manufacturer, and Janus, a California-based company that had distributed Dedon's products for several years.

When Dedon notified Janus that it planned to begin direct sales in the US, Janus filed for ICC arbitration in London pursuant to the arbitration agreement in the purported distribution agreement. In response, Dedon filed the instant action in the Southern District of New York seeking a declaration that no agreement existed. Dedon then asked the ICC International Court of Arbitration to find that it was not prima facie satisfied of the existence of an arbitration agreement under Article 6(2) of the ICC Rules. The ICC Court denied Dedon's motion. Subsequently, in the instant action, Janus moved for an order to compel Dedon to arbitrate, or in the alternative, for a stay of the court proceedings pending the ICC tribunal's decision on the merits.

Against this backdrop, the court expressed concern that, if it ruled on arbitrability, its ruling might be inconsistent with decisions by the ICC tribunal or an English court charged with reviewing the validity of the ICC award. Since New York had little connection to the dispute, a stay might be called for on comity grounds.

However, the court held that it was required to rule on the existence of the arbitration agreement and therefore could not compel the parties to arbitrate or stay the proceedings in favour of the ongoing arbitration. According to the court, the existence of an arbitration agreement, as distinguished from the question of whether the agreement is void, voidable, or illegal when formed, is a threshold issue for judicial consideration. Dedon did not waive its right to have the court decide the existence of the arbitration agreement by participating in the ICC arbitration, as Dedon had consistently objected to the arbitration and had sought immediate judicial review. Regarding comity as a basis for a stay, the court noted that the parties did not brief the issue.

The court concluded by ordering a hearing with witnesses and arguments to determine whether an exclusive distribution agreement containing an arbitration agreement existed.

For practitioners, the court's analysis of waiver is instructive. The court distinguished In re Arbitration between Halcot Navigation Ltd. P'ship & Stolt-Nielsen Transp. Group, 491 F. Supp. 2d 413 (S.D.N.Y. 2007), where the plaintiff voluntarily submitted the question of arbitrability to the arbitrators with just a general reservation of its rights, and only went to court after the arbitrators ruled against it. Here, Dedon objected to the ICC arbitration in its answer to the petition, and only made its Article 6(2) request to the tribunal after filing the complaint in this action. In its Article 6(2) request, Dedon also specifically reserved the right to go to court to challenge the existence of the arbitration agreement. In all, Dedon offers a roadmap of how to preserve a challenge to arbitrability while participating in a parallel arbitration.