Legal Memorandum: Motion to Compel Arbitration in VI

Issue: Under the law of the Virgin Islands, when will a court grant a motion to compel arbitration?

Area of Law: Alternative Dispute Resolution, Litigation & Procedure
Keywords: Motion to compel arbitration; Granting; Valid agreement to arbitrate
Jurisdiction: Federal, Virgin Islands
Cited Cases: 514 U.S. 938; 921 F.2d 507; 473 U.S. 614; 531 U.S. 79; 475 U.S. 643
Cited Statutes: 9 U.S.C. § 2
Date: 05/01/2004

In deciding a motion to compel arbitration under the Federal Arbitration Act (FAA), a court must conduct a two-step inquiry.  First, the court must determine whether the parties agreed to arbitrate the dispute.  Mitsibushi Motors Corp. v. Solar Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985).  This determination involves two considerations:  (1) whether there is a valid agreement to arbitrate between the parties; and (2) whether the dispute in question falls within the scope of that arbitration agreement.  AT&T Techs. v. Communications Workers of Am., 475 U.S. 643, 649 (1986); Paine Webber, Inc. v. Hartmann, 921 F.2d 507, 511 (3d Cir. 1990).  “Ordinary state law principles governing the formation of contracts” should apply when deciding if the parties agreed to arbitrate the dispute in question.  First Options, Inc. v. Kaplan, 514 U.S. 938, 941 (1995).  Thus a generally applicable contract defense such as unconscionability may preclude enforcement of the agreement.  Alexander v. Anthony Int’l, L.P., 341 F.3d 256, 264 (3d Cir. 2003). See also Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1170 (9th Cir. 2003) (“Arbitration agreements . . . are subject to all defenses to enforcement that apply to contracts generally.”), cert. denied, 124 S. Ct. 1169 (2004); 9 U.S.C. § 2.

The second step is to determine “whether legal constraints external to the parties’ agreement foreclose[] the arbitration of those claims.”  Mitsubishi Motors, 473 U.S. at 628.  Where the arbitration agreement involves statutory claims, the court […]

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