Judge Wrestles With Sharp Electronics' Bid to Quash Arbitration Gag Order

A federal judge in Washington, D.C., heard arguments Friday in a novel case that asks whether a private arbitrator's emergency gag order against Sharp Electronics should be declared unenforceable.

Sharp sued Chinese manufacturing company Hisense and its U.S. subsidiary in August. The two companies are in ongoing arbitration proceedings in Singapore, as Sharp tries to end its licensing deal allowing Hisense to sell Sharp TVs in the United States. An arbitrator in that proceeding issued an “emergency” order preventing Sharp from talking publicly about the dispute, though no such restriction was imposed on Hisense. Sharp also sued Hisense in California earlier this year, accusing the company of poorly manufacturing and deceptively advertising Sharp TVs.

Sharp's lawyer, Venable's Randy Miller, told U.S. District Judge James Boasberg of the District of Columbia on Friday that the gag order is unenforceable under a provision in the New York Convention because it is contrary to U.S. public policy. Sharp wants to communicate with the Federal Communications Commission about possible safety issues with the TVs Hisense is selling, but cannot do so because of the gag order. Miller said the gag order therefore violates the public policy of the United States to allow private entities to petition the government under the First Amendment.

Miller said the “elephant in the room” was that due to the gag order, which Sharp is currently honoring, the company's “speech rights are at minimum chilled” and potentially “destroyed.”