2011 Arbitration Case Law | Texas Supreme Court

Continuing our 2011 Year-End Highlights series, we present today noteworthy arbitration cases heard by the Texas Supreme Court.

• On February 27, 2011, the Texas Supreme Court denied cert to a case where agreement required arbitrator to be Saudi National or Muslim Foreigner. In In re Aramco Services Co., No. 01-09-00624-CV, (Tex. App. – Houston [1^st], March 19, 2010), DynCorp International, LLC and Aramco entered into a contract for a computer system which was to be manufactured in the U.S. and installed at Aramco’s offices in Saudi Arabia. The contract contained a Saudi “Choice of Law” provision and an arbitration clause which required an arbitrator to be “a Saudi national or a Moslem foreigner.” Read more here.

• In February, the Texas Supreme Court heard oral arguments in CMH Homes, Inc. et al. v. Perez, No. 10-0688. At issue in this case of first impression is an interlocutory appeal from an arbitration order filed pursuant to Section 51.016 of the Texas Civil Practice and Remedies Code. Read more here.

• On March 11, 2011, the Supreme Court of Texas held that parties to an arbitration agreement may grant non-signatories the right to compel arbitration. In In re Rubiola, No. 09-0309, (Tex., March 11, 2011), Brian and Christina Salmon agreed to purchase a home from Greg and Catherine Rubiola with J.C. Rubiola acting as listing broker for the transaction. Brothers Greg and J.C. Rubiola jointly operate a number of real estate and mortgage companies in San Antonio, including Rubiola Management, L.L.C. and Rubiola Mortgage Company. Read more here.

• On April 1, 2011, the Supreme Court of Texas held in a per curiam opinion that the Texas General Arbitration Act (TAA) applied to a dispute where a party invoked the TAA in a hearing on a motion to compel arbitration and no evidence was offered to show the TAA did not apply despite that the motion itself failed to invoke the act. Read more here.

• On May 13, 2011, the Supreme Court of Texas held that the Texas General Arbitration Act (TAA) allows judicial review of arbitral awards by agreement beyond what the Federal Arbitration Act (FAA) allows. In Nafta Traders, Inc. v. Quinn, No. 05?07?00340 (Tex., May 13, 2011) Nafta, an international re-distributor of athletic apparel and footwear, challenged a $200,000 arbitration award to Quinn on her sex-discrimination and retaliation claims. An arbitration provision in the company’s employee handbook barred arbitration awards that contained reversible legal error or that applied a cause of action or remedy not expressly provided by law. However, the arbitration section did not indicate whether state or federal law would apply, providing only that “[a]ll proceedings shall be conducted in the City of Dallas, State of Texas.” Quinn argued that federal arbitration law controls, which, under the U.S. Supreme Court’s decision in Hall Street v. Mattel Inc., 552 U.S. 576, 128 S. Ct. 1396, 170 L. Ed. 2d 254 (2008) does not allow judicial review to be expanded by agreement beyond what the federal arbitration statute provides. Read more here.

• On May 27, 2011, the Texas Supreme Court held that Texas Civil Practice and Remedies Code Section 51.016 does not allow an interlocutory appeal of an order appointing an arbitrator.In CMH Homes,et al.v. Adam Perez, No. 10-0688 (Tex., May 27, 2011), Adam Perez purchased a manufactured home from CMH Homes , Inc. from salesman Bruce Robinson Moore, Jr. and Vanderbilt Mortgage and Finance financed the purchase. Read more here.

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