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A federal court in Ohio denied a non-signatory's motion to compel arbitration because the claims did not fall within a narrow interpretation of the arbitration agreement.
In General Power Products, LLC v. MTD Products, Inc., No. 1:06-cv-143, 2007 WL 901522 (S.D. Ohio. Mar. 26, 2007), General Power Products (GPP) signed an exclusive distribution agreement with Zongshen (ZS). The parties' agreement contained an arbitration clause.
When ZS began to deal directly with MTD Products (MTD), GPP brought several claims against MTD, including tortious interference with contract, unfair competition and trade secret misappropriation. MTD then brought a motion to compel arbitration, citing the arbitration clause in the GPP/ZS agreement.
Although the Court held that MTD had standing to compel arbitration, it refused to grant the motion to compel. The language of the GPP/ZS agreement called for arbitration only of "disputes hereunder." The Court interpreted this language to mean that the parties would arbitrate only those disputes regarding interpretation of the contract itself. Because all of GPP's claims against MTD could be resolved without interpretation of the GPP/ZS agreement, the claims did not fall within the scope of the agreement.
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