An Arizona federal district court has refused to decide whether an arbitration agreement's choice of law provisions violated Arizona public policy, noting that neither party challenged the validity of the arbitration agreement as a whole.

In Millenium 3 Techs. v. ARINC, Inc., No. CV 08-1257-PHX-JAT, 2008 WL 4737887 (D. Ariz. Oct. 29, 2008), ARINC contracted with the City of Phoenix to construct security systems in its airport. Millenium entered into a contract as a subcontractor on the project.

After a dispute arose over payments, Millenium and ARINC agreed that the dispute was to be resolved by arbitration in accordance with their contract, but disagreed about the enforceability of the choice of law provisions contained in the arbitration agreement. Millenium brought suit for a declaratory judgment that the choice of law provisions were unenforceable as a violation of Arizona public policy.

The Court acknowledged that another Ninth Circuit district court previously held that the enforceability of a choice of law provision in an arbitration agreement was a matter for the court to decide. See Smith v. Paul Green School of Rock Music, No. CV 08-00888, 2008 WL 2037721 (C.D. Cal. May 5, 2008). However, the Court noted that, unlike in Paul Green, Millenium and ARINC agreed that the dispute was subject to arbitration and the agreement as a whole was enforceable. Under those circumstances, the Court held it was inappropriate for a court to decide the choice of law issue.

Accordingly, the Court dismissed Millenium's action seeking a declaratory judgment on the choice of law provisions and ordered the parties to proceed to arbitration.