Whistling Ipse Dixit

The United States District Court for Delaware recently provided an exceptionally thorough and clear analysis of gateway arbitrability determinations, holding in Nidec Corporation v. Seagate Technology LLC that, under the parties’ contract, the issue was one for the arbitrator, not the court. The court’s decision is summarized in this article by Oskana Wright at Fox Rothschild, available at JD Supra.

The contract provision at issue (Section 10.8(b)) provided that:

If the parties are unable to resolve any dispute, controversy or claim arising out of or relating to this Agreement, including the formation, interpretation, breach or termination thereof, whether the dispute, controversy or claim asserted is able to be arbitrated … then either party will have the option to request that the dispute be finally determined by arbitration in accordance with the JAMS International Arbitration Rules.

Objecting to the defendant’s motion to compel arbitration, the plaintiff argued that there was a role for the court to determine arbitrability and that the defendant “should not be allowed to compel arbitration simply by declaring ipse dixit that any dispute is a dispute arising out of or relating to the Covenant Agreement.”

Rejecting this argument, the court explained:

The question whether the claims “arise[] out of or relate[] to the Covenant Agreement” has been delegated to the arbitrator. The parties agreed to resolve any disputes regarding whether the “claim asserted is able to be arbitrated” in arbitration. Here, there is a dispute between the parties about whether the claims asserted in this case can be arbitrated pursuant to the Covenant Agreement. Therefore, this dispute is within the scope of the arbitration clause and must be delegated to an arbitrator. The Covenant Agreement may be completely irrelevant to the claims in this action. But that is not an issue that I am permitted to resolve per the clear language of the contract.

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