Opinion ID: 2509558
Heading Depth: 2
Heading Rank: 3

Heading: Volt

Text: Volt involved the application of section 1281.2(c) to a lawsuit with interrelated arbitrable and nonarbitrable claims and parties who were not subject to the arbitration agreement at issue. The underlying contract, which covered the installation of an electrical system on the Stanford University campus, contained an agreement to arbitrate all disputes between the parties `arising out of or relating to this contract or the breach thereof.' The contract also contained a choice-of-law provision that the contract `shall be governed by the law of the place where the Project is located,' which was California. After disputes arose, Volt demanded arbitration. Stanford, in turn, filed an action in the California superior court against Volt and other companies involved in the construction project with whom it did not have arbitration agreements. The trial court, ruling on Stanford's motion to stay the arbitration and Volt's motion to compel arbitration and stay the lawsuit, stayed the arbitration under section 1281.2(c). ( Volt, supra, 489 U.S. at pp. 470-471, 109 S.Ct. 1248.) The California Court of Appeal affirmed the trial court's ruling, concluding that the choice-of-law provision incorporated California's rules of arbitration into the contract. ( Volt, supra, 489 U.S. at pp. 471-472, 109 S.Ct. 1248.) After acknowledging that the interpretation of private contracts is ordinarily a question of state law, which this Court does not sit to review, the high court accepted the Court of Appeal's construction that the choice-of-law provision incorporated the state arbitration laws, including section 1281.2(c). ( Volt, supra, 489 U.S. at pp. 474-476, 109 S.Ct. 1248.) The court held that application of the California statute to stay arbitration would not undermine the goals and policies of, and is not preempted by, the FAA in a case where the parties have agreed that their arbitration agreement will be governed by the law of California. ( Volt, supra, 489 U.S. at pp. 470, 477-479, 109 S.Ct. 1248.) There is no federal policy favoring arbitration under a certain set of procedural rules; the federal policy is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate. ( Id. at p. 476, 109 S.Ct. 1248.)