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A federal district court in Texas ordered arbitration of a tortious interference with contract claim pursuant to an arbitration clause in a separate contract, holding that the claim was subject to arbitration because the contract containing the arbitration clause would likely be raised as a justification in defending against the tortious interference claim.
In Frindar Megasoft International v. Telcordia Technologies, Inc., No. A-06-CA-600 LY, 2006 WL 3063434 (W.D. Tex. Oct. 26, 2006), Frindar sued Telcordia, claiming that Telcordia tortiously interfered with a contract between Frindar and Sasktel by telling Sasktel that Frindar failed to pay invoices under the Frindar/Telcordia contract.
Telcordia counterclaimed for breach of contract. The Court ordered arbitration of the counterclaims pursuant to an arbitration clause in the Frindar/Telcordia contract, and Telcordia argued that Frindar’s tortious interference claim was also subject to arbitration.
The arbitration clause in the Frindar/Telcordia contract applied to “[a]ll controversies or claims arising out of or relating to this Agreement.” In determining whether the tortious interference claim was covered by the arbitration clause, the Court first looked to the elements of a tortious interference claim.
Without deciding which law governed the parties’ agreement, the Court looked to the elements of tortious interference under New Jersey and Texas law. The claimant had to show a “lack of justification” under New Jersey law, and justification served an as affirmative defense under Texas law.
Telcordia argued that the justification element of a tortious interference claim would require reference to the Frindar/Telcordia contract because Telcordia was likely to raise Frindar’s alleged breach of the contract as a justification for communicating with Sasktel. From that premise, Telcordia argued that the arbitration clause in the Frindar/Telcordia contract applied to the tortious interference claim.
The Court agreed, holding that the Frindar/Telcordia contract would be relevant in deciding the tortious interference claim. Accordingly, the Court ordered arbitration.
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