Arbitration Agreement Can Be In Answer

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During the implementation of the FDA and after the reorganization of the company, a dispute had broken out under the agreement and Kabab initiated arbitration proceedings directly against Kout and not against its new subsidiary Al Homaizi, although the latter remained the licensee in question. The FDA contained an arbitration agreement fixing the seat of the Paris arbitration. A Paris-based arbitral tribunal applied French law to the question of whether Kout had become a party to the arbitration agreement and decided that this was the case because of the parties` conduct. The court then found Kut responsible for an FDA violation. The U.S. courts of appeals for the fourth, fifth, sixth and Federal Circuit have taken the “completely for no reason” test as part of their investigation into the arbitration capacity of a dispute. In Simply Wireless, the Fourth Circuit argued that the court should not leave the question of arbitration capacity to an arbitrator if “a party`s assertion that a claim falls under an arbitration clause is light or otherwise illegitimate.” Simply Wireless, 877 F.3d to 529. Indeed, if the parties have agreed to settle only a few issues, an arbitrator does not have the power to rule on the arbitration capacity of a party`s claim that clearly does not fall within the scope of the arbitration clause. See Douglas v. Regions Bank, 757 F.3d 460, 464 (5th Cir. 2014) (“[I]n a delegation provision (step 1), the Tribunal must ask whether the rejection of the claim falling within the scope of the arbitration agreement is totally unfounded (second step).); Turi v. Main Street Adoption Servs., LLP, 633 F.3d 496, 511 (6th Cir. In 2011 (“[I]n the end, if the parties expressly confer on the arbitrator the power to decide on the arbitration capacity of claims related to the arbitration agreement of the parties, this delegation applies only to claims at least well covered by the agreement.” (“Yes.

. . . the Tribunal concludes that the parties to the agreement clearly and unambiguously intend to delegate arbitration decision-making capacity to an arbitrator, and that the Tribunal should conduct a second, more limited inquiry to determine whether the assertion of arbitration capacity is wholy unfounded.”) Accordingly, a court cannot delegate the question of arbitration capacity to an arbitrator if it is clear that the right to arbitration is totally unfounded. . . .

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