A trial court cannot properly refuse a motion to compel arbitration merely because of its concerns with the sufficiency of discovery allowed during the arbitral proceedings, according to the Maryland Court of Special Appeals.

In Essex Corp. v. Susan Katharine Tate Burrowbridge, LLC, No. 27 Sept. Term 2007, 2008 WL 251975 (Md. Ct. Spec. App. Jan. 31, 2008), Tate sued Essex for breach of a corporate acquisition contract. The contract contained an agreement requiring arbitration of any dispute regarding Essex's right of offset of the purchase price, and Essex sought to compel arbitration of Tate's claim.

The circuit court rejected the motion, expressing the opinion that Tate "could be prejudiced by an immediate referral to arbitration" by not affording Tate the opportunity to compel discovery under the rules of the court. Tate claimed that Essex had not complied with discovery requests for certain documents necessary for Tate to sustain its claim. The circuit court suggested it would reconsider the motion to compel "after the discovery was completed."

The Court emphasized that the proper role of a circuit court in considering a motion to compel arbitration was to determine whether there was an agreement to arbitrate the subject matter of the instant dispute.

To the Court, the circuit court's unease with the sufficiency of discovery during arbitration proceedings was not a proper reason to deny Essex's motion to compel. It "should not have kept an arbitrable dispute in circuit court for the purposes of discovery," said the Court, since the sought-after discovery was related to the substance of the dispute, not the validity or scope of the arbitration agreement.