Legal Memorandum: Interpretation of Arbitration Agreements

Issue: WHETHER A DEFENDANTS HAS PROFFERED ANY ADMISSIBLE EVIDENCE THAT PLAINTIFF ASSENTED TO AN AGREEMENT TO ARBITRATE.

The first gateway question is whether the parties “enter[ed] into a valid arbitration agreement?”  John Hancock Mut. Life Ins. Co. v. Olick, 151 F.3d 132, 137 (3d Cir. 1998).

The second gateway question is whether “the dispute between [the] parties fall[s] within the language of the arbitration agreement?”  John Hancock, 151 F.3d at 137. 

Although generally arbitration agreements are construed generously in favor of arbitration, there is an exception when, “a narrow rather than a broad arbitration clause is involved.”  Mayor & City Council v. Baltimore City Composting, 800 F. Supp. 305, 308 (D. Md. 1992).  In the latter situation, “courts generally scrutinize the contract more closely to determine whether the parties intended that a particular dispute be arbitrated.”  Id. at 308 (citing McDonnell Douglas Fin. v. Penn. Power & Light Co., 858 F.2d 825, 832 (2d Cir. 1988)). 

The phrase “arising from” has frequently been construed by the courts in various contexts.  Generally, it is interpreted to mean that there is a substantial nexus or a causal connection between the two events listed; that is, that the first event listed was proximately caused by the second event.  Chedid v. Boardwalk Regency Corp., 756 F. Supp. 941, 943 (D. Va. 1991).  The Chedid court’s observation about the plain meaning of the phrase is instructive.  In the course of construing the phrase as part of a long-arm statute, the court noted:

Resolving this question requires […]

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