Ex Parte Shamrock Food Service, Inc.
Ex Parte Shamrock Food Service, Inc.
Opinion
This petition for mandamus involves the question of whether a dispute over the termination of a food service agreement between Shamrock Food Service and Birmingham-Southern College is within the scope of the agreement's arbitration clause.
The arbitration clause at issue reads as follows:
"In the event of any dispute(s) in regard to matters stated herein, which may not be resolved mutually between the parties hereto, such matters shall be referred to a Board of Arbitration. . . . If the two so named cannot agree on a third member, the Director of the Federal Mediation and Conciliation Service shall be requested to name the third member. . . . The decision of the majority of the members of the Board of Arbitration shall be final and binding upon both parties to the Agreement."
The food services contract and arbitration clause are in writing and involve transactions in interstate commerce; therefore, the provisions of the Federal Arbitration Act are applicable.
"The [Federal Arbitration] Act was intended to 'revers[e] centuries of judicial hostility to arbitration agreements,' Scherk v. Alberto-Culver Co., supra, at 417 U.S. [506], at 510, 94 S.Ct. [2449] at 2453 [
41 L.Ed.2d 270 ], by 'plac[ing] arbitration agreements "upon the same footing as other contracts." '417 U.S., at 511 ,94 S.Ct., at 2453 , quoting H.R. Rep. 96, 68th Cong., 1st Sess. 1, 2 (1924). The Arbitration Act accomplishes this purpose by providing that arbitration agreements 'shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.'9 U.S.C. § 2 . The Act also provides that a court must stay its proceedings if it is satisfied that an issue before it is arbitrable under the agreement, § 3; and it authorizes a federal *Page 922 district court to issue an order compelling arbitration if there has been a 'failure, neglect, or refusal' to comply with the arbitration agreement, § 4."The Arbitration Act thus establishes a 'federal policy favoring arbitration,' Moses H. Cone Memorial Hospital v. Mercury Construction Corp.,
460 U.S. 1 ,24 ,103 S.Ct. 927 ,74 L.Ed.2d 765 (1983), requiring that 'we rigorously enforce agreements to arbitrate.' Dean Witter Reynolds Inc. v. Byrd, 470 U.S. [213], at 221, 105 S.Ct. [1238] at 1243 [84 L.Ed.2d 158 ]."
See also Ex Parte McKinney,
In the case at bar, the plaintiff contends that both parties agreed to terminate the contract prior to the end of its five-year term, but that after the plaintiff had acted in reliance on the agreement to terminate, the defendant changed its mind and sought to enforce the contract. The defendant, however, contends that there was no agreement to terminate the contract.
Section 8.1 of the food services contract states that the agreement may be terminated by either party at the end of its five-year term or at any time thereafter, by giving 90 days' prior written notice. The plaintiff contends that because the contract specifically addresses only the termination of the contract at the end of its term, their alleged bilateral agreement to terminate the contract prior to the end of its term is outside the scope of the arbitration clause. We disagree.
Clearly, under the broad provisions of the arbitration clause, the issue of whether the contract has been terminated must be submitted to arbitration. See Houston GeneralInsurance Co. v. Realex Group, N.V.,
Accordingly, the trial court was in error in holding that the matter of the termination of the food services contract is not an arbitrable issue under this particular arbitration clause.
WRIT GRANTED.
TORBERT, C.J., and JONES, SHORES, ADAMS and HOUSTON, JJ., concur.
Reference
- Full Case Name
- Ex Parte Shamrock Food Service, Inc. (In Re Birmingham-Southern College v. Shamrock Food Service, Inc.)
- Cited By
- 4 cases
- Status
- Published