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Legal Memorandum: Stay of Proceedings Pending Arbitration

Issue: What must a party demonstrate in order to have a court grant its request for a stay of judicial proceedings in order to permit arbitration to proceed?

Area of Law: Alternative Dispute Resolution, Litigation & Procedure
Keywords: Stay of judicial proceedings; Arbitration
Jurisdiction: Federal, Virgin Islands
Cited Cases: 433 F. Supp. 2d 538
Cited Statutes: 9 U.S.C. § 3
Date: 11/01/2007

It is well established that the party seeking a stay of judicial proceedings pending arbitration pursuant to 9 U.S.C. § 3 bears the burden to show the matter is properly referable to arbitration.  Am. Fin. Capital Corp. v. Princeton Elec. Prods., No. CIV. A. 95-4568 (E.D. Pa. Mar. 20, 1996); see Nederlandse Erts-Tankersmaatschappij v. Isbrandtsen Co., 339 F.2d 440, 442 (2d Cir. 1964) (defendants who seek stay have burden of establishing such stay is warranted); Miletic v. Holm & Wonsild, 294 F. Supp. 772, 774 (S.D.N.Y. 1968) (“The burden is on the party seeking a stay to satisfy the court that a matter is referable to arbitration.”).  Similarly, a motion to compel arbitration is reviewed under the summary judgment standard, requiring the court to consider all evidence and inferences in favor of the party opposing arbitration.  Ostroff v. Alterra Healthcare Corp., 433 F. Supp. 2d 538, 541 (E.D. Pa.), reconsideration denied July 25, 2006.

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