Polimaster Ltd. v. RAE Systems, Inc.

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

POLIMASTER LTD.; NA&SE TRADING 
CO., LIMITED,
Plaintiffs-Appellants, No. 08-15708
v.  D.C. No.
05-CV-01887-JF
RAE SYSTEMS, INC.,
Defendant-Appellee.


POLIMASTER LTD.; NA&SE TRADING 
COMPANY LTD., No. 09-15369
Plaintiffs-Appellants,
v.  D.C. No.
5:05-cv-01887-JF
RAE SYSTEMS, INC., OPINION
Defendant-Appellee.

Appeal from the United States District Court
for the Northern District of California
Jeremy D. Fogel, District Judge, Presiding

Argued and Submitted
January 15, 2010—San Francisco, California

Filed September 28, 2010

Before: J. Clifford Wallace, Procter Hug, Jr. and
Richard R. Clifton, Circuit Judges.

Opinion by Judge Wallace;
Dissent by Judge Clifton

16549
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16553

COUNSEL

Kevin R. Garden, Esq., Alexandria, Virginia, for appellants
Polimaster Ltd., et al.

John P. Flynn, Esq., San Francisco, California, for appellee
RAE Systems, Inc.

OPINION

WALLACE, Senior Circuit Judge:

Appellants Polimaster Ltd. and Na&Se Trading Company,
Ltd. (Na&Se) (collectively, Polimaster) appeal from the dis-
trict court’s confirmation of an arbitration award against them
and in favor of appellee RAE Systems, Inc. (RAE). They also
appeal from the district court’s subsequent order granting pre-
and post-judgment interest on the arbitration award. We have
jurisdiction pursuant to 28 U.S.C. § 1291 and 9 U.S.C.
§ 16(a)(1)(D), and we reverse and remand.

I.

Appellant Polimaster Ltd. is a limited liability company
based in Belarus, engaged in the design and manufacture of
16554 POLIMASTER LTD. v. RAE SYSTEMS, INC.
radiation monitoring instruments. Appellant Na&Se is a cor-
poration based in Cyprus, engaged in intellectual property
licensing. In January 2003, Polimaster Ltd. and Na&Se
entered into a contractual relationship with RAE, a Delaware
corporation with its principal place of business in California.
The parties signed two agreements, the “Nonexclusive
License for Proprietary Information Usage” (License Agree-
ment) and the “Product and Component Buy/Sell Agreement”
(Buy/Sell Agreement), which provided for RAE’s manufac-
ture and distribution of Polimaster-developed radiation detec-
tion devices.

The License Agreement refers to Na&Se as the “Licensor,”
RAE as the “Licensee,” Na&Se and RAE as the “Parties,” and
Polimaster Ltd. as the “Manufacturer.” The License Agree-
ment contains a dispute resolution provision that states:

9.1 In case of the dispute between the Licensor and
the Licensee on the issues provided for by the pres-
ent Agreement the Parties shall take every effort for
their settlement by negotiations.

9.2 In case of failure to settle the mentioned disputes
by means of negotiations they should be settled by
means of arbitration at the defendant’s side.

The parties agree that “defendant’s side” means “defendant’s
site,” that is, the geographical location of the defendant’s
principal place of business. The Buy/Sell Agreement also
contains an arbitration clause, which states, “7.1 The Parties
shall exert the best efforts to settle up any disputes by means
of negotiations, and in case of failure to reach an agreement
the disputes shall be settled by arbitration at the defendant’s
site.”

Disputes arose in the course of performing the agreements.
In May 2005, Polimaster filed an action against RAE in the
United States District Court for the Northern District of Cali-
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16555
fornia. After the district court denied Polimaster’s request for
a preliminary injunction, the parties negotiated to submit Poli-
master’s claims to arbitration in California (that is, defendant
RAE’s “site,” as directed in the agreements). In May 2006,
Polimaster and RAE commenced arbitration by a joint letter
to “JAMS,” an arbitration provider organization (since
renamed “JAMS, The Resolution Experts”). Although the
parties jointly submitted to arbitration, Polimaster made the
following reservation:

It is Polimaster’s position that no counterclaims will
be filed in this matter based on the requirement in
the agreement that all such claims be filed in the
location of the party against whom such claims are
brought. Because Polimaster is located in Belarus,
Polimaster asserts that all such claims against it shall
be brought in that location.

In July 2006, Polimaster submitted its demand for arbitra-
tion, setting forth claims against RAE for breach of contract
under both the License Agreement and the Buy/Sell Agree-
ment, misappropriation of trade secrets, and unfair competi-
tion. In August 2006, RAE submitted its answer to
Polimaster’s demand for arbitration, in which RAE set forth
not only its affirmative defenses and responses to Polimaster’s
allegations, but also RAE’s own claims against Polimaster,
which it called “counterclaims.” RAE asserted several claims
sounding in contract and tort, including interference with pro-
spective economic advantage, fraud and negligent misrepre-
sentation.

Polimaster asked the arbitrator to dismiss RAE’s “counter-
claims,” arguing that any claims by RAE against Polimaster
could not be arbitrated at RAE’s site in California, because
the arbitration agreement required that they be brought at the
“defendant’s [site],” that is, at Polimaster’s site. The arbitrator
refused to dismiss RAE’s counterclaims, reasoning that the
contract did not specify where counterclaims should be
16556 POLIMASTER LTD. v. RAE SYSTEMS, INC.
brought. To fill the perceived gap, he applied procedural rules
regarding compulsory counterclaims, as defined in Federal
Rules of Civil Procedure, California Rules of Civil Procedure,
and JAMS rules. The arbitrator decided it would be contrary
to “notions of fairness, judicial economy and efficiency” to
“[p]rosecut[e] a claim with affirmative defenses in one venue
while simultaneously prosecuting counterclaims almost iden-
tical to the affirmative defenses in another [venue].” Instead,
he reasoned, RAE’s “counterclaims” should be “heard in the
same venue as the properly situated original arbitration claims
[by Polimaster against RAE].”

The arbitrator in California ultimately adjudicated both
Polimaster’s claims and RAE’s “counterclaims.” The arbitra-
tor issued an Interim Award in July 2007, which rejected all
of Polimaster’s claims and awarded damages to RAE on its
successful counterclaim, in the amount of $2,412,432. By a
Final Arbitral Award dated September 20, 2007, the arbitrator
confirmed the findings and conclusions of the Interim Award
and further awarded costs to RAE, as the prevailing party, in
the amount of $46,213.15.

Thereafter, RAE sought confirmation of the arbitration
award in the United States District Court for the Northern
District of California. Polimaster moved to vacate the award,
arguing that the arbitral procedure was not in accordance with
the parties’ agreement and that the arbitrator exceeded his
powers by allowing RAE to assert “counterclaims” at RAE’s
own site in California rather than at the “defendant’s [site]”
as required by the agreement. The district court confirmed the
award to RAE, and this appeal followed.

II.

[1] The parties agree that the arbitration agreement and
award are governed by the Convention on the Recognition
and Enforcement of Foreign Arbitral Awards (the New York
Convention), June 10, 1958, 21 U.S.T. 2517. We must con-
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16557
firm an arbitration award falling under the New York Con-
vention unless we determine that “one of the grounds for
refusal or deferral of recognition or enforcement of the award
specified in the [sic] said Convention.” 9 U.S.C. § 207; see
also Mgmt. & Technical Consultants S.A. v. Parsons-Jurden
Int’l Corp., 820 F.2d 1531 (9th Cir. 1987) (Parsons-Jurden).

[2] The New York Convention enumerates seven defenses
to the recognition or enforcement of an arbitral award. These
grounds include, among others, that the award “deals with a
difference not contemplated by or not falling within the terms
of the submission to arbitration,” that the parties were under
some incapacity or their agreement is not valid under the law
of the country where the award is made, or that the party
against whom the award is invoked was not able to present its
case. 21 U.S.T. 2517, Art. V, §§ 1(a)-(c). In this appeal, Poli-
master invokes the defense set forth in Article V, § 1(d), of
the New York Convention:

(d) The composition of the arbitral authority or the
arbitral procedure was not in accordance with the
agreement of the parties, or, failing such agreement,
was not in accordance with the law of the country
where the arbitration took place.

21 U.S.T. 2517, Art. V, § 1(d). Polimaster asserts that the
arbitration procedure was contrary to the parties’ agreement
because the arbitrator allowed RAE to bring its claims, calling
them “counterclaims,” against Polimaster in an arbitration
proceeding in California, thereby permitting RAE to bring a
claim at its own site.

We review de novo whether a party established a defense
to enforcement of an arbitration award under the New York
Convention. China Nat’l Metal Prods. Import/Export Co. v.
Apex Digital, Inc., 379 F.3d 796, 799 (9th Cir. 2004). As the
party seeking to avoid enforcement of the award, Polimaster
has the burden of showing the existence of a New York Con-
16558 POLIMASTER LTD. v. RAE SYSTEMS, INC.
vention defense. Ministry of Def. of the Islamic Republic of
Iran v. Gould, Inc., 969 F.2d 764, 770 (9th Cir. 1992). Poli-
master’s burden is substantial because the public policy in
favor of international arbitration is strong, id., and the New
York Convention defenses are interpreted narrowly. See
China Minmetals Materials Imp. & Exp. Co., Ltd. v. Chi Mei
Corp., 334 F.3d 274, 282-83 (3d Cir. 2003); Gould, 969 F.2d
at 770 (adopting narrow interpretation of defense based on
arbitrator exceeding authority); Parsons & Whittemore Over-
seas Co. v. Societe Generale de L’Industrie Du Papier
(RAKTA), 508 F.2d 969, 976 (2d Cir. 1974) (adopting narrow
interpretation of public policy defense).

[3] The grounds for refusing confirmation of an award
under the Federal Arbitration Act (FAA), 9 U.S.C. § 10, gen-
erally track those under the New York Convention, although
they are not coextensive. See Parsons-Jurden, 820 F.2d at
1534. When interpreting the defenses to confirmation of an
arbitration award under the New York Convention, we may
look to authority under the FAA. Parsons & Whittemore, 508
F.2d at 974.

III.

We may decline enforcement of an arbitral award on the
basis that “the arbitral procedure was not in accordance with
the agreement of the parties.” 21 U.S.T. 2517, Art. V,
§ (1)(d). To determine whether the procedure used was con-
trary to the parties’ agreed arbitral procedures, we must begin
with the language of the parties’ arbitration agreement. See
Encyclopaedia Universalis S.A. v. Encyclopaedia Britannica,
Inc., 403 F.3d 85, 91 (2d Cir. 2005); Coast Trading Co. v.
Pac. Molasses Co., 681 F.2d 1195, 1198 (9th Cir. 1982); cf.
generally Howsam v. Dean Witter Reynolds, Inc., 537 U.S.
79, 84 (2002) (holding that, in the context of an arbitrability
determination, the court reviews the contract de novo);
Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999)
(also in context of arbitrability determination, the interpreta-
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16559
tion of the relevant contractual provision was subject to de
novo review).

A.

In this case, the arbitration agreement provided that dis-
putes “should be settled by means of arbitration at the defen-
dant’s [site].” According to Polimaster, the arbitration
agreement required RAE’s claims to be arbitrated in Belarus.
According to RAE, the arbitration agreement was ambiguous
concerning the treatment of counterclaims. Thus, according to
RAE, the arbitrator correctly, and within the scope of his
authority, resolved the ambiguity so as to allow litigation of
RAE’s counterclaims at its own site in California.

For the reasons stated hereafter, we conclude that the arbi-
tration agreement required that all requests for affirmative
relief, whether styled as claims or counterclaims, be arbitrated
at the defendant’s site. The arbitration agreement required that
any “dispute” be arbitrated at “the defendant’s [site].” The
term “dispute” encompasses both claims and counterclaims.
Moreover, a party is a “defendant” as to any dispute where
another party seeks damages or some other form of relief
against him. Therefore, Polimaster was clearly the “defen-
dant” as to RAE’s “counterclaims.” The “dispute” embodied
in those claims should not have been arbitrated at RAE’s site
in California.

1.

[4] The arbitration agreement was not ambiguous. The
agreement contemplated that all claims should be asserted at
the defendant’s site. This provided a clear designation of the
forum for arbitration. Cf, e.g., Bauhinia Corp. v. China Nat’l
Mach. & Equip. Imp. & Exp. Corp., 819 F.2d 247, 249 (9th
Cir. 1987) (ambiguous forum selection provision). The
requirement of arbitration at the defendant’s site is effectively
a forum selection clause, in which the parties agreed to arbi-
16560 POLIMASTER LTD. v. RAE SYSTEMS, INC.
trate at the location of a defendant’s principal place of busi-
ness. This choice of forum is presumptively enforceable. See
Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 (1974); M/S
Bremen v. Zapata Off-Shore Co., 407 U.S. 1, 13-14 (1972).

The dissent takes a different position: it asserts that the
arbitration agreement is ambiguous. According to our dissent-
ing colleague, “To the extent that any answer can be gleaned
from the language used in the agreement, I think the language
cuts slightly against the majority opinion’s interpretation.”
The dissent points out that the arbitration clause in question
provides that, in the event that “the mentioned disputes” can-
not be settled by “negotiations[,] they should be settled by
means of arbitration at the defendant’s [site].” Because the
word “disputes” is plural, but the words “defendant” and “side
[site]” are singular, the dissent reasons that “[t]he parties
anticipated that there could be multiple disagreements, yet the
‘defendant’s site’ refers to only one location.”

[5] The dissent’s construction of the arbitration clause,
however, is simply not reasonable. The term “disputes” as
used in section 9.2 of the Agreement refers back to the cate-
gory of disputes made subject to the arbitration clause, as
defined in section 9.1 of the Agreement. Section 9.1 provides
that, in the case of “the dispute [sic] between the Licensee and
the Licensor on the issue provided for by the present Agree-
ment” the parties were to make “every effort for their settle-
ment by means of negotiations.” Section 9.2 contemplates
that, in the event that “the mentioned disputes” cannot be set-
tled by negotiations, they should be “settled by means of arbi-
tration at the defendant’s [site].” Thus, the plural term
“disputes,” as used in section 9.2 of the Agreement, is merely
a reference back to the covered disputes set forth in section
9.1, i.e. disputes “on the issues provided for by the present
Agreement.” When viewed in context, the plural term “dis-
putes,” cannot reasonably be said to mean consolidation of
multiple claims into a single arbitration because that would be
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16561
contrary to the more specific forum-selection clause contained
in section 9.2 of the Agreement.

2.

[6] The arbitrator opined that the arbitration clause was
indeterminate because it failed to provide expressly for the
treatment of counterclaims. The dissent likewise concludes
that the arbitration clause is faulty for failure to contemplate
counterclaims. But that the agreement neither expressly
included nor excluded counterclaims does not render it inde-
terminate. There is no reason why the arbitration agreement
had to provide for the treatment of counterclaims. To con-
clude that the arbitration clause is ambiguous on this basis
sets up a rigged game: criticizing the failure to provide for the
treatment of counterclaims presumes that such a clause is a
necessary, indispensable, or essential component of an agree-
ment to arbitrate. But there is no reason that this must be so.

The dissent argues that, “it is not a novel or obscure prac-
tice to resolve all claims, including counterclaims, in a single
proceeding that has already commenced.” The dissent, like
the arbitrator below, also points to rules pertaining to counter-
claims in the Federal Rules of Civil Procedure, the California
Rules of Civil Procedure, and the rules of the arbitration
forum agreed upon by the parties (JAMS). The dissent argues
that the arbitration clause in this case is ambiguous because
“[t]he prosecution of counterclaims in the same proceeding is
broadly recognized in international arbitration.” The dissent
then points to general procedural rules and guidelines from
several international arbitration provider organizations that
typically would apply to the extent those rules are consistent
with a given agreement to arbitrate. See, e.g., International
Chamber of Commerce (ICC) Rules of Arbitration art. 5;
London Court of International Arbitration Rules art. 2.1(b);
United Nations Commission on International Trade Law
(UNCITRAL) Arbitration Rules art. 19.
16562 POLIMASTER LTD. v. RAE SYSTEMS, INC.
[7] Nevertheless, although the joinder of counterclaims
into a pending proceeding is widely contemplated by various
rules of procedure, the parties simply did not incorporate
these rules into their contract. Instead, once the assumption
that counterclaims will be joined into a pending proceeding is
recognized as what it is — merely an assumption — it is clear
that the parties’ clause was adequate to express their intent.
To put the point differently, the parties’ clause was adequate
to provide for separate arbitrations at the defendant’s site. See,
e.g. Gary B. Born, International Commercial Arbitration in
the United States 6 (1994). There is no reason to require the
parties to include contractual language specifically defeating
or negating the joinder of claims. The dissent’s viewpoint is,
in effect, based on the dissent’s assumption that counterclaims
should be joined in a pending proceeding. We believe it
would be circular to interpret the parties’ agreement therefore
by reference to rules that the parties did not incorporate into
their contract and which are inconsistent with the parties’
agreement to arbitrate. See, e.g., Emmanuel Gaillard & John
Savage, Eds., Fouchard, Gaillard, Goldman on International
Commercial Arbitration 632-53 (1999) (pointing out that the
procedural rules of the forum need not apply to conduct of
international arbitration).

Indeed, to the extent that we look to, or incorporate, our
domestic rules of procedure in construing the arbitration
clause at hand, we believe those rules tend to support our
interpretation. Counterclaims are “affirmative claims for
relief” and are “offensive in nature.” Daniel R. Coquilette, et
al., eds., Moore’s Federal Practice § 13.90[1] (3d Ed. 2010);
see also FDIC v. F.S.S.S., 829 F. Supp. 317, 322 n.11 (D.
Alaska 1993) (“Counterclaims are separate claims indepen-
dent of the plaintiff’s underlying claim.”); In re Concept
Clubs, Inc., 154 B.R. 581, 586 n.4 (D. Utah 1993). Under
Federal Rule of Civil Procedure 13, a party is the “defendant”
against a counterclaim. See Moore’s Federal Practice
§ 13.90[2][a]; see also Rainbow Mgmt. Group v. Atlantis Sub-
marines Haw., L.P., 158 F.R.D. 656, 659 (D. Haw. 1994);
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16563
Earle M. Jorgenson Co. v. T.I. U.S., Ltd., 133 F.R.D. 472, 475
(E.D. Pa. 1991) (“Any party asserting a claim, whether an
original claim, counterclaim, cross-claim or third-party claim,
becomes an opposing party to the party sued” (internal cita-
tions and quotation marks omitted)).

[8] The dissent points out that the term “defendant” could
have a different meaning depending on the context. For
instance, in litigation, “defendant” is sometimes used as a
“shorthand” to “distinguish the original defending party from
the party initially on the offensive.” See Moore’s Federal
Practice at § 13.90[2]. The term, however, is used in the latter
sense only when it is clear from the relevant context that the
court, tribunal, arbitrator, or the parties have formally desig-
nated one particular side as the “defendant.” See id. In this
case, the context and structure of the arbitration clause clearly
indicate that the parties understood the “defendant” as a party
against whom the other asserts a “dispute” arising out of the
License Agreement or the Buy/Sell Agreement. Absolutely
nothing in these agreements suggests that the parties under-
stood the term “defendant” as a formal designation limited to
the party initially on the defensive. It is well established that
a counterclaim results in shifting the parties so that the party
counterclaiming becomes the plaintiff on the counterclaim
and the original plaintiff becomes the defendant. See Roberts
Min. & Mill v. Schrader, 95 F.2d 522, 524 (9th Cir. 1938)
(explaining that a “counterclaim [is], in effect, a new suit, in
which Schrader was plaintiff and Smith was defendant”).
Accordingly, there can be no dispute that Polimaster became
the “defendant” as to RAE’s claims against it for affirmative
relief, regardless of how RAE styled those claims. Under the
clear language of the arbitration agreement, Polimaster was
entitled to have the claims against it arbitrated in its home
forum.

[9] We acknowledge that the arbitration agreement in this
case is an unusual one. The arbitration clause does not pro-
vide for a choice of law or a choice of procedural rules. See
16564 POLIMASTER LTD. v. RAE SYSTEMS, INC.
generally Born at 24 (describing the several choice of law
issues present in international arbitrations); Alan Redfern &
Martin Hunter, Law and Practice of International Commer-
cial Arbitration, 163-168 (2002). The arbitration clause also
does not provide for the number of arbitrators or a method for
their appointment. Cf., e.g., ICC Standard Arbitration Clause,
available at www.iccarbitration.org (last visited July 13,
2010) (recommending clause that states: “[a]ll disputes aris-
ing out of or in connection with the present contract shall be
finally settled under the Rules of Arbitration of the [ICC] by
one or more arbitrators appointed in accordance with the said
Rules”); American Arbitration Association, Drafting Dispute
Resolution Clauses: A Practical Guide at 4-5 (Sept. 1, 2007,
available at www.adr.org, last visited July 13, 2010) (setting
forth checklist of subjects generally appropriate for stipulation
in arbitration clause); id. at 8-9 (providing several model arbi-
tration clauses). In this case, the clause provides only for a
choice of forum: defendants’ [Polimaster] site. That choice is
entitled to enforcement.

B.

Admittedly, we have interpreted the parties’ arbitration
clause so as to permit an inefficient result: parallel arbitrations
in distant fora regarding similar and/or related topics and dis-
putes. Indeed, the dissent accurately points out that requiring
arbitration of a “counterclaim” in a separate proceeding at
Polimaster’s site in Belarus “would represent an inefficient
way to resolve disputes.” Over this point there is no dispute.
But we do not agree with the implication that the dissent
draws from the apparent inefficiency of the parties’ agreed
procedures. The dissent argues that the arbitration clause
should be construed in a manner to avoid inefficiency,
because “[p]arties contractually adopting arbitration as the
method for resolving disputes commonly do so to achieve
efficiency.” The dissent further adds that “[i]t is logical to rea-
son that the parties to this agreement did not intend an ineffi-
cient result.” Similarly, the arbitrator opined that parallel
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16565
arbitrations in two fora “would appear to be inconsistent with
the economic benefits of arbitration on which the parties
relied in agreeing to arbitration.”

We disagree with the proposition that our interpretation of
the arbitration clause should be controlled by efficiency con-
cerns. There are two independent reasons why we cannot
impose upon the arbitration clause an interpretation in the
interests of confirming it to an imputed notion of efficiency.
We now discuss those two reasons.

1.

First, the policy favoring arbitration “is at bottom a policy
guaranteeing the enforcement of private contractual arrange-
ments.” Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 625 (1985). We must enforce the parties’
agreement according to its terms, even if the result is ineffi-
cient. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213,
217-21 (1985) (arbitration required even when it results in
inefficient procedures: “The legislative history of the Act
establishes that the purpose behind its passage was to ensure
judicial enforcement of privately made agreements to arbi-
trate. We therefore reject the suggestion that the overriding
goal of the Arbitration Act was to promote the expeditious
resolution of claims”). It is true that it may be inefficient to
have multiple arbitrations regarding the parties’ dealings in
different fora before different arbitrators. See China Nat’l,
379 F.3d at 802. But we cannot override the express terms of
the parties’ agreement, because parties are free to agree to
inefficient arbitration procedures. See Byrd, 470 U.S. at 221
(“we rigorously enforce agreements to arbitrate, even if the
result is ‘piecemeal’ litigation”); Moses H. Cone Mem’l Hosp.
v. Mercury Constr. Corp., 460 U.S. 1, 20 (1983) (compelling
arbitration where it would result in bifurcated proceedings).
Thus, the “efficiency” position adopted by the arbitrator and
the dissent is inconsistent with the true basis of the “federal
policy favoring arbitration.”
16566 POLIMASTER LTD. v. RAE SYSTEMS, INC.
In a similar vein, RAE asserts that we should “construe
arbitral authority broadly to comport with the enforcement-
facilitating thrust of the Convention and the policy favoring
arbitration.” See Parsons-Jurden, 820 F.2d at 1534. While we
recognize that the New York Convention was enacted to pro-
mote the enforceability of international arbitration agree-
ments, that Convention, like the federal policy favoring
arbitration more generally, favors enforcement of arbitration
clauses according to the intent of the contracting parties. The
New York Convention “recognizes the central role of the par-
ties in fashioning the arbitration procedure, and provides
sanctions for failure to adhere to the agreed procedures.” Born
at 44; see also Rhone Mediterranee Compagnia Francese Di
Assicurazioni E Riassicurazoni v. Lauro, 712 F.2d 50, 54 (3d
Cir. 1983).

[10] We cannot, therefore, “overlook agreed-upon arbitral
procedures” in favor of the enforcement of an arbitration
award. Encyclopaedia Universalis, 403 F.3d at 91. We also
cannot utilize the federal policy favoring arbitration to justify
the imposition of general procedural rules at the expense of
the parties’ agreement. See Cargill Rice, Inc. v. Empresa
Nicaraguense Dealimentos Basicos, 25 F.3d 223, 225-26 (4th
Cir. 1994); Szuts v. Dean Witter Reynolds, Inc., 931 F.2d 830,
831 (11th Cir. 1991). Here, the parties expressly agreed to
submit disputes to arbitration at “defendant’s [site].” The par-
ties’ agreement effectively removed the decision regarding
forum from the procedural decisions delegated to the arbitra-
tor. The arbitrator could not override the parties’ express
agreement in favor of general procedural rules. Indeed, adher-
ence to the parties’ agreed-upon procedures is regularly
enforced, such as where relevant to the choice of forum of
arbitration, see Bear, Stearns & Co., Inc. v. Bennett, 938 F.2d
31, 32 (2d Cir. 1991); National Iranian Oil Co. v. Ashland
Oil, Inc., 817 F.2d 326, 332 (5th Cir. 1987), or the appoint-
ment of arbitrators, see Universal Reinsurance Corp. v. All-
state Insurance Co., 16 F.3d 125, 128 (7th Cir. 1993); Avis
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16567
Rent A Car System, Inc. v. Garage Employees Union, 791
F.2d 22, 24 (2d Cir. 1986).

2.

Second, the policy favoring arbitration “applies with spe-
cial force in the field of international commerce.” Mitsubishi
Motors, 473 U.S. at 631. The Court has recognized the impor-
tance of forum-selection clauses to international trade: “agree-
ing in advance on a forum acceptable to both parties is an
indispensable element in international trade, commerce, and
contracting,” M/S Bremen, 407 U.S. at 13-14, and that a
choice of forum is “an almost indispensable precondition to
achievement of the orderliness and predictability essential to
any international business transaction,” Scherk, 417 U.S. at
516.

There is no sound basis for imputing a concern for effi-
ciency to the parties in this case. We cannot assume that the
parties’ agreement to arbitrate was motivated by a desire for
efficiency alone, or even that efficiency was a central motiva-
tion for their arbitration agreement. Indeed, there are many
reasons why parties might agree to private dispute resolution;
many of these reasons have nothing to do with efficiency.
Non-efficiency justifications for arbitration are especially
important in the realm of international contracting. For exam-
ple, international arbitration is often preferred as a method to
obtain a neutral decision maker, and to “obviate[ ] the danger
that a dispute under the agreement might be submitted to a
forum hostile to the interests of one of the parties or unfamil-
iar with the problem area involved.” Scherk, 417 U.S. at 516;
see also Mitsubishi Motors, 473 U.S. at 631; M/S Bremen,
407 U.S. at 13; Born at 5. That appears to have been a critical
concern to the contracting parties here: forum selection
restricted to the defendants’ site. That language makes sense
only by a joint view of the parties that neither will be required
to defend itself except in a proceeding at its home forum.
16568 POLIMASTER LTD. v. RAE SYSTEMS, INC.
[11] In sum, although we recognize that parties often
choose arbitration for sake of efficiency, we cannot impute
such a motivation to the parties here, and we cannot and the
arbitrator cannot rewrite the forum selection clause to suit a
personal view of the virtue of efficiency.

C.

China National is not contrary to our holding in the present
case. 379 F.3d 796. There, the arbitration provision at issue
submitted disputes to arbitration by the China International
Economic and Trade Arbitration Commission (CIETAC),
pursuant to CIETAC arbitration rules, to be conducted in Bei-
jing, Shenzen, or Shanghai, as determined by the claimant.
Apex commenced arbitration proceedings against China
National in Shanghai. A few days later, China National com-
menced a separate arbitration in Beijing. Apex objected to
China National’s arbitration application because it concerned
the same purchase orders as its own arbitration application.
CIETAC allowed the arbitrations to proceed separately, how-
ever. China National obtained a favorable award in the Beij-
ing arbitration, and obtained confirmation of that award. Apex
appealed, arguing that the arbitral procedure did not comply
with the parties’ agreement.

We concluded that the maintenance of multiple arbitrations
was not inconsistent with the arbitration agreement. The
agreement specified three acceptable venues — Beijing,
Shenzen, or Shanghai — and made the selection the claim-
ant’s option. “Nothing in the parties’ purchase orders either
specifically designated Shanghai as the only appropriate arbi-
tral forum or articulated a rule of decision for determining the
appropriate forum.” Id. at 800. Further, the arbitration agree-
ment incorporated CIETAC rules, “[t]hus, CIETAC did not
trump specific terms of the parties’ purchase orders by turning
to its own rules because the arbitral clause did not resolve the
parties’ dispute itself.” Id. at 801.
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16569
[12] China National thus involved an arbitration agree-
ment dissimilar to what we consider here. In China National,
the arbitration provision provided three options for forum to
be selected by the claimant. This provision did not constitute
a mandatory forum selection clause. Here, in contrast, there
is no ambiguity in the agreement: it requires arbitration at the
defendant’s site. Further, the parties in China National
adopted CIETAC rules in their arbitration agreement;
CIETAC did not trump the specific terms of the parties’
agreement. Cf. Cargill Rice, 25 F.3d at 225-26. Here, the par-
ties made no similar choice of applicable procedures. Thus,
the arbitrator’s reference to compulsory counterclaim proce-
dures went outside of the parties’ agreement, and violated the
specific agreement of the parties.

The dissent argues that our holding is inconsistent with
China National. The dissent’s position is, at base, that “[t]he
parties’ disagreement in this case over who is a ‘defendant’ —
a respondent to an initial claim only, or both an initial respon-
dent and a party who responds to counterclaims — matches
the China National debate over the meaning of the contractual
word ‘claimant.’ ” The dissent reasons that “the arbitration
clause here is equally ‘indeterminate’ with respect to the dis-
positive interpretive question of the precise meaning of
‘defendant.’ ”

In our view, however, the dissent focuses on an inapposite
aspect of China National. Apex argued that CIETAC had dis-
regarded the parties’ arbitration clause by permitting separate,
parallel arbitrations to proceed. Apex, therefore, had to estab-
lish that the parties’ arbitration agreement permitted proceed-
ings in only one forum “and not in multiple venues.” 379 F.3d
at 799. As we have described, the agreement in China
National gave the claimant the option to select one of three
fora: Beijing, Shenzen, or Shanghai. Because the arbitration
agreement provided the choice of three fora at claimant’s
option, “[n]othing in the parties’ purchase orders either spe-
cifically designated Shanghai as the only appropriate arbitral
16570 POLIMASTER LTD. v. RAE SYSTEMS, INC.
forum or articulated a rule of decision for determining the
appropriate forum. Apex [was] mistaken in its claim that the
arbitration clause was sufficiently specific that CIETAC could
determine the arbitral forum without reference to its arbitral
rules.” Id. at 800. Further, we determined that the use of the
term “claimant” did not limit arbitration proceedings to the
first-chosen forum. Instead, “the clause does not define
‘Claimant’ but leaves it open as a variable term (i.e. either
party could be a claimant).” Id. at 801. Thus, the term “claim-
ant” did not designate the forum of arbitration in light of the
fact that the clause allowed each “claimant” to elect the forum
of arbitration. We stated that the arbitration clause — because
it provided three potential fora for each claimant’s election
— did not resolve the question of forum.

The dissent focuses on the insufficiency of the term “claim-
ant” to resolve the dispute at issue in China National; but that
term was insufficient to resolve the dispute in light of the con-
text of the arbitration agreement involved. Rather than being
contradictory to our holding, we view China National’s dis-
cussion of “claimant” to be consistent with our conclusion. In
China National, as in this case, two parties purported to be
claimants. By extension, in this case, there are two claimants
and two defendants. The arbitration clause at issue required
arbitration at the “defendant’s [site].” In light of the manda-
tory forum selection clause, there is no ambiguity. This case
is distinct from China National.

D.

[13] We hold that Polimaster has established a defense
under the New York Convention. Under the New York Con-
vention, we may refuse enforcement of an award if it is the
result of procedures that are contrary to the parties’ agree-
ment. Here, the parties agreed to an arbitration clause that
requires disputes to be arbitrated where the defendant is
located; each party should be held to the contractual language
requiring arbitration of disputes in the location of the party
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16571
against whom relief is sought. The procedures used in the
arbitration of “counterclaims” were “not in accordance with
the agreement.” The district court erred in confirming the
arbitration award for RAE.

IV.

On February 25, 2008, the district court issued an order
confirming the arbitration award, but did not issue a judg-
ment. Polimaster’s appeal of that order is discussed in Part III.
On June 5, 2008, RAE filed a motion in our court, asking that,
pursuant to Federal Rules of Civil Procedure 60(a), the district
court be allowed to make corrections to the order. We denied
that motion, but following a request from the district court for
leave to fix “an omission and an error” in the February 25,
2008 Order, and a request from RAE that we reconsider our
earlier denial of the Rule 60(a) motion, we granted RAE’s
motion for reconsideration and “motion for limited remand”
to allow RAE to file a Rule 60(a) motion in district court to
correct the clerical errors identified by the district court. In the
district court, RAE then filed its Rule 60(a) motion; on Janu-
ary 23, 2009, the district court granted the motion and filed
an amended order and a judgment, this time including in its
relief to RAE pre- and post-judgment interest. Polimaster now
appeals from that judgment (case No. 09-15369), arguing that
the judgment’s inclusion of pre- and post-judgment interest
exceeded the scope of our limited mandate.

We need not reach the issue of whether the district court
erred in this respect, because we hold that the district court’s
judgment must be vacated for the reasons set forth in Part III
of this opinion. We therefore remand for further proceedings
consistent with this opinion.

REVERSED AND REMANDED.
16572 POLIMASTER LTD. v. RAE SYSTEMS, INC.
CLIFTON, Circuit Judge, dissenting:

I respectfully dissent. I believe that the majority opinion
has gone astray in two ways.

First, it fails to recognize that the relevant language in the
parties’ arbitration agreement is ambiguous. The arbitrator
and the district judge both concluded that the language is
ambiguous, and I agree with them. The arbitrator also con-
cluded that the language is better interpreted differently than
the majority has read it here, and I tend to agree with the arbi-
trator’s specific interpretation, as well. The two judges mak-
ing up the majority insist, nonetheless, that the language can
have but one reasonable interpretation, an interpretation dif-
ferent from that reached by the arbitrator. In light of the con-
trary views of the neutral arbitrator, the district court, and me,
the majority’s conclusion that the language is unambiguous
flies in the face of a strong headwind, and the reasoning
offered by the majority to support its conclusion is unpersua-
sive.

Second, as a result of its refusal to recognize the ambiguity
of the contractual language, the majority opinion usurps the
arbitrator’s authority to interpret an ambiguous contractual
term, in conflict with our decision in China National Metal
Products Import/Export Co. v. Apex Digital, Inc., 379 F.3d
796 (9th Cir. 2004).

1. The ambiguity of the relevant language

The problem posed by this case is how, after an arbitration
between the parties has been initiated, to deal with a claim
back by the respondent against the original claimant. In fed-
eral court, we call this type of claim a “counterclaim.” See
Fed. R. Civ. P. 13. The parties advocate different solutions to
the problem based upon different interpretations of the arbi-
tration term in the contract: “In case of failure to settle the
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16573
mentioned disputes by means of negotiations they should be
settled by means of arbitration at the defendant’s side [site].”

RAE Systems maintains that the word “defendant” refers to
the initial respondent, the party against which the first claim
is brought, such that any subsequent counterclaim can be
brought in the same arbitration proceeding, even though that
proceeding is not located at the site of the target of the coun-
terclaim. Polimaster, on the other hand, contends that both the
initial respondent and the counter-respondent are “defen-
dant[s]” within the meaning of the contractual term, requiring
the original respondent to initiate and pursue a separate arbi-
tral proceeding at the site of the counter-respondent in order
to pursue a counterclaim.

The majority opinion accepts Polimaster’s multiple-
defendant, multiple-arbitration interpretation as the right one.
It further decides that this interpretation is so clearly correct
that the arbitration clause is not ambiguous. The majority does
not satisfactorily explain, however, why RAE’s alternative
interpretation is not also a reasonable reading of the arbitra-
tion clause. “[A] contract is ambiguous if reasonable people
could find its terms susceptible to more than one interpreta-
tion.” Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir.
2009) (internal quotation marks omitted). The arbitration
clause is susceptible to more than one reasonable interpreta-
tion, as the arbitrator and the district court concluded. The
language is ambiguous and should be recognized as such.

The majority argues that its reading is the only reasonable
one based on the notion that any party who defends against
“any dispute where another party seeks damages or some
other form of relief against him” is necessarily a “defendant.”
Maj. op. at 16559. But none of the sources the majority cites,
at 16562-63, establish as a matter of terminology that the term
“defendant” must be used only as the majority supposes.1 At
1
See, e.g., Rainbow Mgmt. Group, Ltd. v. Atlantis Submarines Haw.,
L.P., 158 F.R.D. 656, 659 (D. Haw. 1994) (holding that “[c]o-parties
16574 POLIMASTER LTD. v. RAE SYSTEMS, INC.
least two of the cited sources actually support the opposite
conclusion: that one might use the term “defendant,” espe-
cially with the definite article and without a preceding adjec-
tive, to distinguish the original defending party from the party
initially on the offensive. For example, Moore’s Federal Prac-
tice, upon which the majority relies, refers to “the defendant”
in precisely this way. See Daniel Coquilette et al., eds.,
Moore’s Federal Practice § 13.90[2] (3d ed. 2010) (especially
the text following n.9 and preceding n.17) (using “the plain-
tiff” and “the defendant” to designate substantive sides in liti-
gation, in contrast to the term “defending party,” which refers
to either side whenever it defends against an affirmative claim).2
The plaintiff, under this terminology, might later become a
“counterclaim defendant” or a “crossclaim defendant” as well,
but such additional designations, despite including the word
“defendant,” would not transform that party into “the defen-
dant” in the contemplated sense—a shorthand for a particular
side in the litigation.

To the extent that any answer can be gleaned from the lan-
guage used in the agreement, I think the language cuts slightly
against the majority opinion’s interpretation. Look carefully at
the sentence in question: “In case of failure to settle the men-
tioned disputes by means of negotiations they should be set-

become opposing parties [emphasis added] within the meaning of Fed. R.
Civ. P. 13(a) after one such party pleads an initial cross-claim against the
other,” with no discussion of whether an “opposing party” must be
deemed a “defendant”); In re Concept Clubs, Inc., 154 B.R. 581, 586 n.4
(distinguishing between a counterclaim and a setoff or recoupment, with
no mention of whether a counterclaim makes the party that opposes it a
“defendant”); Earle M. Jorgenson Co. v. T.I. U.S., Ltd., 133 F.R.D. 472,
475 (E.D. Pa. 1991) (dealing, like In re Concept Clubs, with the “opposing
party” issue, without endorsing any theory of how the term “defendant”
can or must be used).
2
See also FDIC v. F.S.S.S., 829 F. Supp. 317, 322 n.11 (D. Alaska
1993) (also cited by the majority) (describing a counterclaim brought by
“Defendants[ ]” against “the plaintiff”).
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16575
tled by means of arbitration at the defendant’s side.” The
word “disputes” is plural, but the words “defendant” and
“side” (or “site”) are singular. The parties anticipated that
there could be multiple disagreements, yet “the defendant’s
site” refers to only one location. The arbitration clause does
not say “defendants’ sites.” Of course, I need not be as sure
of this interpretation as the majority must be of its own,
because I do not contend that only this reading is reasonable.
To establish that the language is ambiguous, it is enough to
demonstrate that a reasonable interpretation other than the
majority’s exists, and the language of the arbitration clause is
more than adequate for that purpose.

The reasoning provided by the arbitrator to support his con-
clusion that the existing arbitration should encompass coun-
terclaims as well was logical. The arbitrator rejected the
interpretation embraced by the majority—that arbitration of a
counterclaim must be conducted in a separate proceeding at
the counter-respondent’s site—because that would represent
an inefficient way to resolve disputes. Parties contractually
adopting arbitration as the method for resolving disputes com-
monly do so to achieve efficiency. It is logical to reason that
such parties do not intend inefficient results. See Restatement
(Second) of Contracts § 202(1) (1981) (“Words and other
conduct are interpreted in the light of all the circumstances.”);
id. cmt. b (“The circumstances for this purpose include the
entire situation, as it appeared to the parties.”).

In addition, the arbitrator recognized that it is not a novel
or obscure practice to resolve all claims, including counter-
claims, in a single proceeding that has already commenced.
The arbitrator here specifically referenced the treatment of
counterclaims in the Federal Rules of Civil Procedure, the
California Rules of Civil Procedure, and the rules of the arbi-
tration forum agreed upon by the parties, JAMS. The prosecu-
tion of counterclaims in the same proceeding is broadly
recognized in international arbitration. Prominent interna-
tional arbitration organizations address counterclaims explic-
16576 POLIMASTER LTD. v. RAE SYSTEMS, INC.
itly in their rules. See, e.g., International Chamber of
Commerce Rules of Arbitration art. 5; London Court of Inter-
national Arbitration Rules art. 2.1(b); German Institute of
Arbitration Rules § 10; United Nations Commission on Inter-
national Trade Law Arbitration Rules art. 19.

Considering the context in which the parties made their
agreement does not improperly assume any conclusion or
wrongly impute any particular motivation to the parties. It
merely recognizes one good reason the parties may have
intended to agree to something different from the interpreta-
tion of the arbitration clause that the majority espouses:
because the majority’s interpretation ignores both the com-
mon desire for efficiency and the widespread procedural prac-
tice of litigating counterclaims in the same proceeding.3 Given
this context, it is not so clear to me, let alone unambiguously
clear from the words of the arbitration clause, that the parties
agreed to require piecemeal litigation. The majority opinion
does not persuasively explain why we should conclude that
they did.

The majority opinion’s arguments are, in reality, circular—
the arguments for its preferred reading of the arbitration
clause assume the correctness of that reading. For example,
the majority opinion asserts, at 16562, that “the parties’ clause
was adequate to express their intent . . . to provide for sepa-
rate arbitrations at the defendant’s site.” I agree that if the par-
ties intended separate arbitrations at the sites of each
defendant or counterclaim defendant, then that is how the
agreement should be interpreted and applied. But the infer-
ence that the parties intended the interpretation favored by the
majority rests on nothing other than the majority’s own inter-
3
We need not (indeed, should not, in determining whether a contract is
ambiguous) seek to establish whether the parties subjectively took effi-
ciency concerns or the concept of counterclaims into account. The relevant
point is that the influence of these considerations as background to the
agreement makes an alternate reading of the arbitration clause reasonable.
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16577
pretation of the contractual language. Nothing else is cited by
the majority opinion to support its assertion that the parties
intended that result, nor is any persuasive explanation given
to counter the reasoning of the arbitrator that reached a differ-
ent conclusion.

Similarly, the majority opinion asserts, at 16562, that this
dissent rests on an “assumption” that counterclaims will be
joined into an existing proceeding, and, at 16562, that the rel-
evant language is clear because there was “no reason to
require the parties to include contractual language specifically
defeating or negating the joinder of claims.” But the parties
obviously recognized the possibility of conflicting claims.
The possibility of combining those claims into a single pro-
ceeding was by no means unknown. As noted above, that is
the result suggested by both rules of courts and rules of inter-
national arbitration organizations. It is no less an “assump-
tion” to conclude that, in the absence of a contractual
agreement, multiple claims should be litigated piecemeal in
separate arbitrations.

In the end, the reasoning offered by the majority to demon-
strate that the agreement unambiguously provided for piece-
meal arbitrations rests on nothing more than the majority’s
own assumption that its interpretation of the arbitration clause
is correct. In the face of contrary conclusions by the arbitrator,
the district court, and this dissent, that is much too thin a reed
to support the majority’s conclusion that the relevant language
is unambiguous.

2. The China National decision

Our decision in China National Metal Products
Import/Export Co. v. Apex Digital, Inc., 379 F.3d 796 (9th
Cir. 2004), requires that we respect the arbitrator’s interpreta-
tion of an ambiguous contractual provision. Indeed, it also
provides further support for the conclusion that the arbitration
clause here is ambiguous.
16578 POLIMASTER LTD. v. RAE SYSTEMS, INC.
The arbitration clause in China National provided that all
disputes arising from or in connection with the contract would
be submitted to a specified forum, the China International
Economic and Trade Arbitration Commission (“CIETAC”),
for arbitration in Beijing, Shenzhen, or Shanghai, “at the
Claimant’s option.” China National, 379 F.3d at 800. Just as
the parties here argue over who qualifies as “defendant,” the
parties in China National debated who qualified as “claimant”
under their arbitration clause. At stake was the right to deter-
mine where arbitration would take place.

Apex first commenced arbitration against China National in
Shanghai. Days later, China National brought its own claims
against Apex in a separate arbitration in Beijing. Id. at 798-
99. Apex argued that only it, as the party that first initiated
arbitration, was a “claimant,” and that its selection of Shang-
hai as the arbitral forum required China National to bring its
claims, which arose largely out of the same set of facts, as
counterclaims in the ongoing Shanghai arbitration. Id. at 801.
China National countered that “[i]t too was a rightful claimant
with respect to its claims against Apex” and that it therefore
retained the right, under the arbitration clause, “to pick a
forum for its own claims.” Id. After considering its own rules,
CIETAC decided in favor of China National’s position and let
the claims proceed separately before separate panels. The Bei-
jing panel entered an award in favor of China National and
against Apex. China National brought an action in federal dis-
trict court to confirm the Beijing panel’s award, the court con-
firmed the award, and Apex appealed, arguing that only one
proceeding, the Shanghai arbitration, should have taken place.
We rejected the challenge and affirmed the confirmation
order. Id. at 797-98.

We held that “[b]oth positions are arguable, and in the face
of an assertion that there can be two claimants, the text of the
arbitration clause alone is indeterminate and does not resolve
the matter.” Id. at 801. The parties’ disagreement in this case
over who is a “defendant”—a respondent to an initial claim
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16579
only, or both an initial respondent and a party who responds
to counterclaims—matches the China National debate over
the meaning of the contractual term “claimant.” See id.
(describing how the parties argued “claimant” should be inter-
preted). And the arbitration clause here is equally “indetermi-
nate” with respect to the dispositive interpretive question of
the precise meaning of “defendant.”

Because China National dealt with an analogous contrac-
tual ambiguity, it controls our decision here and requires us
to affirm. China National established that an arbitrator does
not impermissibly “trump specific terms of the parties’
[agreement] by turning to its own rules” when, as here, an
“arbitral clause [does] not resolve the parties’ dispute itself.”4
Id. In our case the arbitrator applied JAMS rules and the Fed-
eral and California Rules of Civil Procedure because the par-
ties’ agreement left a dispute about counterclaims unresolved.
The application of extrinsic procedural rules did not contra-
dict the parties’ agreement, but merely supplemented it. The
arbitrator thus did not violate Article V, section 1(d) of the
New York Convention, and the judgment of the district court
confirming the arbitration award should be affirmed.

The majority opinion tries to distinguish China National on
several grounds, but none are persuasive. It points out that
“the parties in China National adopted CIETAC rules in their
arbitration agreement,” so the gap-filling application of those
rules by CIETAC “did not trump the specific terms of the par-
ties’ agreement.” Maj. op. at 16569; see China National, 379
F.3d at 801. But it was the arbitration panel, not our court,
that interpreted CIETAC rules and made the decision as to
where the arbitration could proceed. The majority opinion in
4
None of the parties’ contracts defined “defendant’s site” or “defen-
dant’s side.” The controversial term in China National, “claimant,” was
similarly undefined: the arbitration clause “[did] not define ‘Claimant’ but
[left] it open as a variable term (i.e., either party could be a claimant).”
China National, 379 F.3d at 801.
16580 POLIMASTER LTD. v. RAE SYSTEMS, INC.
this case overrides the arbitrator’s decision. While the parties
in this case did not specify a choice of forum or a choice of
procedural law to address issues their arbitration clause did
not resolve, they subsequently did expressly agree on JAMS
as a forum.

Moreover, while the election of default procedural rules in
China National may have strengthened the argument that
applying those rules did not violate the parties’ agreement, a
choice of law was not necessary to China National’s result.
“CIETAC did not trump specific terms of the parties’ pur-
chase orders by turning to its own rules because the arbitral
clause did not resolve the parties’ dispute itself,” 379 F.3d at
801 (emphasis added), not because the CIETAC rules used to
fill a gap in the arbitration clause were incorporated by refer-
ence into the contract. Rules entirely extrinsic to an agree-
ment, such as the JAMS rules and Federal and California
Rules of Civil Procedure applied in this case, do not automati-
cally conflict with that agreement. China National makes
clear that it is the presence of a gap in an arbitration clause,
not the specification of default rules for filling such a gap, that
makes an arbitrator’s reference to extrinsic rules appropriate.
A gap—that is, a dispute between the parties that “the text of
the arbitration clause alone” does not resolve—exists as much
in this case as it did in China National. Reference to outside
procedural rules was appropriate here, even though the rules
employed were not specified in advance by the parties.

The majority opinion also attempts to differentiate this case
from China National by highlighting the fact that the arbitra-
tion clause at issue here, once properly interpreted, mandates
a particular forum (“the defendant’s side”), while the clause
in China National gave one party a choice among three Chi-
nese cities. Maj. op. at 16569. That distinction is beside the
point. The parties debated the meaning of “claimant” in China
National because its definition determined which party got to
choose among Beijing, Shenzhen, and Shanghai. The winner
of the interpretive debate received the right to select a city
 POLIMASTER LTD. v. RAE SYSTEMS, INC. 16581
instead of, as in this case, a predetermined forum that the vic-
torious party would prefer. But that detail does not disturb the
parallel contractual analysis that underlies the two cases. Both
cases are fundamentally about how contractual terms, “claim-
ant” and “defendant,” respectively, should be interpreted
when the contracts themselves do not resolve the parties’ dis-
putes.

Because I conclude that the judgment on the merits should
be affirmed, I would reach the issue of whether the district
court exceeded the scope of our earlier limited remand to cor-
rect its failure to enter a judgment. I would affirm the district
court’s belatedly entered judgment. Because the court’s over-
sight was its failure to enter any judgment at all, it was
empowered to correct its mistake by entering a judgment that
included any relief, including pre- and post-judgment interest,
that could have been included in the judgment in the first
instance. A court is allowed, under Federal Rule of Civil Pro-
cedure 60(a), to make corrections to effectuate what it “origi-
nally intended to do.” Robi v. Five Platters, Inc., 918 F.2d
1439, 1445 (9th Cir. 1990).

I would affirm.