“Calif. App. Court (2nd Dist) Holds Court Should Decide Whether Parties Agreed to Arbitrate”

Daniel Miller of Maurice Wutscher has this article, found in Lexology, discussing the recent California appellate decision in Banc of California, N.A. v. N977CB Holdings, LLC. The case arises from multiple agreements designed to facilitate loans for the purchase of commercial aircraft, and a separate, subsequent agreement providing for the lender’s charter of the aircraft. Only the latter agreement contained an arbitration provision.

Following alleged default, the lender filed suit, and, pursuant to the defendant’s motion, the lower court compelled arbitration on the basis of the arbitration agreement contained in the charter agreement, holding it was for the arbitrator, not the court, to determine the scope of the arbitration.

The appellate court reversed, finding that the lender was not asserting claims under the charter agreement, and that, since the loan agreements contained no arbitration provisions, there was no basis to compel arbitration of the dispute.

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