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An arbitrator’s determination that a particular dispute falls within the scope of an arbitration agreement cannot be subjected to interlocutory court review, according to a federal district court in Ohio.
In MJCM, LLC v. IntelliShop, LLC, No. 3:07CV01115, 2007 WL 2482081 (N.D. Ohio Aug. 27, 2007), two competing corporations had a business dispute and entered into a settlement agreement that contained an arbitration clause. A disagreement arose as to whether a particular aspect of the dispute fell within the scope of the arbitration clause. The arbitrator determined that the arbitration clause applied to that aspect of the dispute.
IntelliShop filed motion to vacate the arbitrator’s decision on the scope of the arbitration clause. Instead of reaching the merits of the arbitrator’s decision, the Court held that IntelliShop’s motion to vacate was not properly before the Court because the motion was in fact an interlocutory appeal. In reaching this holding, the Court noted that the Federal Arbitration Act (FAA) does not give district courts the power to review interlocutory rulings by arbitrators.
The Court cited various policy considerations for the rule, including the fact that allowing such interlocutory appeals would undermine the advantages of the arbitration process by increasing the time spent and expenses incurred during arbitration.
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