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A party seeking a determination of arbitrability from the arbitrator is not refusing to arbitrate as defined by the FAA, according to a federal district court in Ohio.
In Warren Steel Holdings, LLC v. Williams, Civ. No. 3:06CV1665(WWE), 2007 WL 2688240, (N.D. Ohio Sept. 11, 2007), Williams filed a breach of contract lawsuit against Warren, and Warren moved to compel arbitration. The parties, at that point, agreed to submit the claim to international arbitration as stated in the contract.
The parties appeared for arbitration proceedings, but Williams later claimed that the arbitration court did not have jurisdiction over him, and asked the arbitrator to render a decision on the issue. Upon Williams’s objection, Warren petitioned the Court to compel arbitration of the claim, claiming Williams’s objection to the jurisdiction of the arbitration court constituted a refusal to arbitrate under the Federal Arbitration Act (FAA), allowing a court to order the refusing party to arbitration.
First, the Court found that the question of arbitrability was correctly submitted to the arbitrator. The Court observed that the parties had clearly agreed to arbitrate arbitrability through the invocation of particular international arbitration rules that required the arbitrator to hear any question of arbitrability. The parties’ signatures on documents defining this and other terms also indicated clear agreement as to this issue.
Second, the Court refused to equate Williams’s arbitrability challenge with a refusal to arbitrate under the FAA. The Court did not find that Williams had commenced litigation or failed to arbitrate once ordered, the grounds for granting a motion to compel under the FAA. Williams merely requested the issue of arbitrability be reviewed by the arbitrator, and that, according to the Court, did not amount to a refusal to arbitrate.
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