contract containing an arbitration clause in Louisiana

2016In Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 , 126 S.Ct. 1204 , 163 L.Ed.2d 1038 (2006), the parties signed a contract containing an arbitration clause, but the respondents claimed the agreement was not valid because it was usurious.

2016In Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 , 126 S.Ct. 1204 , 163 L.Ed.2d 1038 (2006), the parties signed a contract containing an arbitration clause, but the respondents claimed the agreement was not valid because it was usurious.

2011While provisions for arbitration of controversies arising out of contracts are declared to be valid, irrevocable and enforceable, validity, irrevocability and enforceability are by the terms of Section 4201 made dependent upon “such grounds as exist at law or in equity for the revocation of any contract.” Stone v. Stone, 292 So.2d 686 (La.1974).

1997While provisions for arbitration of controversies arising out of contracts are declared to be valid, irrevocable and enforceable, validity, irrevocability and enforceability are by the terms of Section 4201 made dependent upon "such grounds as exist at law or in equity for the revocation of any contract." Stone v. Stone, 292 So.2d 686 (La.1974).

1997As the majority notes, the rule enunciated in Doctor's Associates is consistent with the Louisiana Supreme Court's most recent case on this issue, George Engine, Co. v. Southern Shipbuilding Corp., 350 So.2d 881 (La.1977), which allowed a party to sue to rescind a contract containing an arbitration clause on the grounds that the contract was void ab initio in a court of competent jurisdiction.

1978We find the Court of Appeal erred when it concluded, "we believe there should be a similar result if the arbitration provision has been waived." In George Engine, supra, the issue was whether a party to a contract containing an arbitration clause may sue to rescind that contract in a court because the contract is, and was, void ab initio.

2020Further, “[a] nonsignatory can ‘embrace’ a contract containing an arbitration clause in two ways: (1) by knowingly seeking and obtaining ‘direct benefits’ from that contract; or (2) by seeking to enforce the terms of that contract or asserting claims that must be determined by reference to that contract.” Id., 52,592, p. 11, 268 So. 3d at 428 (quoting Noble Drilling Servs., Inc. v. Certex USA, Inc., 620 F.3d 469 (5th Cir. 2010)).

2020Further, “[a] nonsignatory can ‘embrace’ a contract containing an arbitration clause in two ways: (1) by knowingly seeking and obtaining ‘direct benefits’ from that contract; or (2) by seeking to enforce the terms of that contract or asserting claims that must be determined by reference to that contract.” Id., 52,592, p. 11, 268 So. 3d at 428 (quoting Noble Drilling Servs., Inc. v. Certex USA, Inc., 620 F.3d 469 (5th Cir. 2010)).

2016The Third Circuit, in Sandvik AB v. Advent Int’l Corp., 220 F.3d 99 (3d Cir.2000), addressed the issue of whether the court |nor the arbitrator should decide the issue of the very existence of a contract containing an arbitration clause when one of the parties claimed the person who signed the agreement lacked authority to do so.

2011For further discussion of these two cases and their divergent treatment of claims of fraud in the inducement of a contract containing an arbitration clause, see Long v. Jeb Breithaupt Design and Build Inc., 44,002, p. 14 (La.App. 2 Cir. 2/25/09), 4 So.3d 930, 939 . .

2010Bridas, 345 F.3d at 354 .

2009In so finding, we relied on Doctor's Assoc., Inc. v. Casarotto, 517 U.S. 681 , 116 S.Ct. 1652 , 134 L.Ed.2d 902 (1996), as permitting a court to consider a challenge to the main contract based on a claim of fraud in the inducement.

2009In so finding, we relied on Doctor's Assoc., Inc. v. Casarotto, 517 U.S. 681 , 116 S.Ct. 1652 , 134 L.Ed.2d 902 (1996), as permitting a court to consider a challenge to the main contract based on a claim of fraud in the inducement.

2009In Sun Drilling Products Corp. v. Rayborn, 97-2112 (La.App. 4 Cir. 12/3/97) , 703 So.2d 818 , this court found that an allegation of fraud in the inducement of a contract containing an arbitration clause was to be decided by the court even when the case was governed by the FAA.

2009In Sun Drilling Products Corp. v. Rayborn, 97-2112 (La.App. 4 Cir. 12/3/97) , 703 So.2d 818 , this court found that an allegation of fraud in the inducement of a contract containing an arbitration clause was to be decided by the court even when the case was governed by the FAA.

1997That rule was also followed in Ackel v. Ackel, 97-70 (La.App. 4 Cir. 5/28/97) , 696 So.2d 140, 143 .