Many construction agreements call for binding arbitration as the means to resolve a dispute between the contracting parties. Pretty straightforward. But what happens if one party disregards the arbitration provision and files suit? Can the other party ask that the arbitration provision be enforced at the same time that it also files a counterclaim?
You might think not, but in one such case an appellate court found that filing a counterclaim at the same time one files a motion to compel arbitration, isn’t enough to overturn the contractual requirement to arbitrate. To do that, the court clarified, one has to initiate discovery or take some additional action inconsistent with the right to arbitrate.
Courts are keen on leveling the playing field between litigants whenever possible. They are therefore very reluctant to waive any prior understanding the parties may have reached – including one to arbitrate any dispute.
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