Opinion ID: 2149843
Heading Depth: 1
Heading Rank: 4

Heading: This Contract Dispute

Text: AMAX asserts that questions of arbitrability are for the court to determine, not an arbitrator. It relies on various precedents from our Court of Appeals stating that the existence of a valid agreement to arbitrate is a threshold question for judicial determination. See, e.g., McCrary Eng'r Corp. v. Town of Upland (1985), Ind. App., 472 N.E.2d 1305, 1307 (citing Great Am. Trading v. I.C.P. Cocoa, Inc., 629 F.2d 1282, 1288 (7th Cir.1980)). Certainly, the validity of an arbitration agreement is a justiciable question, for as Justice Brennan observed more than thirty years ago, the arbitration promise is itself a contract. United Steelworkers v. American Mfg. Co., 363 U.S. 564, 569, 80 S.Ct. 1343, 1347, 4 L.Ed.2d 1403 (1960) (Brennan, J., concurring). Before a court compels arbitration, it must resolve any claims the parties had concerning the validity of the contract containing the arbitration clause. Once satisfied that the parties contracted to submit their disputes to arbitration, however, the court is required by statute to compel arbitration. [6] Judicial inquiry is thus limited to the validity of the contract containing the arbitration clause, not the construction of the clause. More particular to this case, when a valid contract contains a broad arbitration clause, resolution of disputes about various other clauses should be through arbitration. AMAX does not question the validity of its contract with PSI. It explicitly acknowledges the legitimacy of the section 28 arbitration clause. Instead, AMAX seeks a judicial determination that the parties had not agreed to arbitrate whether a gross inequity had occurred. Courts are certainly adept at interpreting contracts, but a court cannot resolve the parties' dispute in the instant case without also eviscerating the arbitration clause of their contract. See, e.g., Goebel v. Blocks & Marbles Brand Toys (1991), Ind. App., 568 N.E.2d 552, 557 (holding that trial court abused its discretion when it ruled on contractual disputes after it had determined the existence of a valid contract containing an arbitration clause). The parties here chose all-encompassing language in deciding what to arbitrate. They agreed that any controversy, claim, counterclaim, defense, dispute, difference or misunderstanding arising out of or relating to this Agreement or breach thereof shall be settled by arbitration... . Agreement § 28, at 36. While parties to such contracts are sometimes moved to seek a judicial remedy when differences arise, judicial intervention can undermine legitimate expectations based on an ADR clause produced through due bargaining, and actions brought despite the presence of such clauses should be viewed with disfavor. See, e.g., Georgia Power Co. v. Cimarron Coal Corp., 526 F.2d 101, 106 (6th Cir.1975), cert. denied, 425 U.S. 952, 96 S.Ct. 1727, 48 L.Ed.2d 195, (1976) (In the absence of language withdrawing this provision [for correcting gross inequities] from the arbitration requirement it is the duty of the court to resolve any doubts in favor of arbitration.). This is not a contract of adhesion; both sides bargained for each term of the contract, including the arbitration clause. PSI appropriately asserts that the contract clause which calls for the parties to renegotiate the contract [w]henever an agreement is reached ... that a gross inequity has occurred is silent as to what the parties should do if they do not agree on the question of whether the changed conditions constitute a gross inequity. Absent language to the contrary, the arbitration clause applies to the disagreement about gross inequities.