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A federal district court in Florida held that a party waived its right to arbitrate by participating in discovery and representing to the Court that it wished to proceed with litigation before filing a motion to compel arbitration. In so ruling, the Court rejected the moving party's argument that the uncertainty of its right to arbitrate necessitated the delay.
In Triplecheck, Inc. v. Creole Yacht Charters Ltd., No. 05-21182-CIV, 2006 WL 3507971 (S.D. Fla. Dec. 5, 2006), Triplecheck filed a motion to compel arbitration more than a year after bringing suit. In fact, Triplecheck had already served interrogatories and requests for production, taken four depositions, completed pre-trial mediation, and attended a scheduling conference. Given those circumstances, the Court found that Triplecheck waived its right to arbitrate and denied the motion to compel.
Triplecheck argued that its duty to demand arbitration did not arise until shortly before it brought the motion to compel because the recent interview of a "key witness" was necessary to determine that the arbitration agreement was contractually binding. Triplecheck cited no authority to support this argument.
Moreover, the Court pointed out that issues regarding the "enforceability of a contract are matters that are for the arbitrator to decide, so long as the contract on its face requires arbitration." As the Court noted, section 4 of the Federal Arbitration Act provides that a party faced with a challenge to the existence of an arbitration agreement may demand a summary trial on that specific question.
By waiting too long to demand arbitration, Triplecheck exposed its opponent to prejudice and squandered the efficiency gains that arbitration normally affords. For those reasons, the Court denied Triplecheck's motion to compel.
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