As you know from prior articles, arbitration is a creature of contract where parties agree to resolve their dispute through arbitration, not litigation. What if the parties are non-signatories to the arbitration agreement?
In a recent case, the trial court compelled parties that did not sign the governing agreement with an arbitration provision to arbitration. One of the parties argued that the non-signatories to the agreement entered into another agreement which incorporated the agreement with the arbitration provision. The trial court agreed and compelled the parties to arbitration. The appellate court reversed because the party opposing arbitration disputed the underlying facts. As such, the appellate court held that the trial court was required to hold an evidentiary hearing to resolve disputed issues of fact. This evidentiary hearing was important because the parties being compelled to arbitration were not the actual parties to the arbitration agreement, albeit they were related parties.
Check out this article for more information on this case.
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