A federal district court in Ohio has rejected a party's efforts to avoid arbitration through a preliminary injunction, holding that the party had not shown either a likelihood of success on the merits or a risk of irreparable harm should arbitration commence.

In O.N. Equity Sales Co. v. FINRA Dispute Resolution, Inc., No. 1:07CV804, 2008 WL 281788 (S.D. Ohio Feb. 1, 2008), O.N. Equity Sales Co. (ONESCO) sought a preliminary injunction against arbitration administrator FINRA. ONESCO alleged that FINRA had no authority to determine the arbitrability of ONESCO's claims and could not compel ONESCO to waive its objections to its forum through a submission agreement.

In deciding whether the requested injunction was warranted, the Court first considered the likelihood of ONESCO's success on the merits. The Court noted that the arbitrability dispute turned on whether ONESCO was a "customer" as defined in the arbitration agreement.

While the Court acknowledged that the arbitrability of this issue was a close question, it decided the issue was probably arbitrable due to the agreement's broad language and its designation of authority to the arbitrators to "interpret and determine the applicability of all provisions under the Code." This, to the Court, implied that the authority to decide whether ONESCO was a customer within the meaning of the Code was bestowed on the arbitration panel. Therefore, it was unlikely that ONESCO would prevail on the merits of its opposition to arbitration.

The Court also found that there was no risk of irreparable harm to ONESCO should the motion to enjoin be denied. It assured ONESCO that it was not waiving its right to object to the arbitral forum through any subsequent participation, recognizing ONESCO's consistent, numerous objections and FINRA's stipulation that participation would not be construed as a waiver of the objection to the arbitral forum.