Friday, July 25, 2014

8th Circuit: Arbitrator Decides Whether Non-Signatory to Contract can Compel Arbitration if Contract incorporates AAA Arbitration Rules

In a recent decision, Eckert/Wordell Architects, Inc v. FJM Properties of Willmar, LLC, the 8th Circuit reviewed a Minnesota federal court's order compelling the parties to submit - to an arbitrator - the question of whether a non-signatory party to the contract (FJM Properties) could compel arbitration. The parties' contract incorporated the AAA Rules requiring arbitration. As such, the 8th Ciruit found that the contract provided a "clear and unmistakable indication" that the parties intended for the arbitrator to decide the threshold question of arbitrability; therefore, the 8th Circuit affirmed the Minnesota district court's decision that the issue was to be resolved by the arbitrator, not by a court.

This case is in line with the U.S. Supreme Court decision in Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002), in which the Supreme Court found that a contract incorporating the NASD (National Association of Security Dealers) arbitration rules was a "clear and unmistakable indication" the parties intended for the arbitrator to decide threshold questions of arbitrability.

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