Opinion ID: 8407625
Heading Depth: 2
Heading Rank: 2

Heading: Waiver of Right to Object to Arbitration

Text: Opals contends, as a preliminary matter, that Bodylines waived its right to object to proceeding with arbitration because it submitted the issue of arbitrability to the arbitrators, and participated actively in the arbitration. “Although a party is bound by an arbitral award only where it has agreed to arbitrate, an agreement may be implied from the party’s conduct.” Gvozdenovic v. United Air Lines, 933 F.2d 1100, 1105 (2d Cir.1991). In other words, if a party participates in arbitration proceedings without making a timely objection to the submission of the dispute to arbitration, that party may be found to have waived its right to object to the arbitration. See, e.g., ConnTech Dev. Co. v. Univ. Of Conn. Educ. Props., 102 F.3d 677, 685 (2d Cir.1996) (finding waiver where party had participated in 45 days of hearings and did not assert objection until 41 months after being served with notice of arbitration demand). However, in this case, Bodylines objected repeatedly to arbitration, beginning with the statement by its counsel in June 1999 which inspired Opals to file the instant litigation. Correspondence between the parties throughout the period of the dispute further supports Bodylines’ assertion that it continuously objected to arbitration. These objections prevent a finding of waiver. See, e.g., Herman Miller, Inc. v. Worth Capital, 1999 WL 132183, at  (2d Cir. Mar. 9, 1999) (summary order finding no waiver where party “repeatedly reserved the right to contest the existence of an agreement to arbitrate”); AGCO Corp. v. Anglin, 216 F.3d 589, 593 (7th Cir.2000) (“If a party willingly and without reservation allows an issue to be submitted to arbitration, he cannot await the outcome and then later argue that the arbitrator lacked authority to decide the matter. If, however, a party clearly and explicitly reserves the right to object to arbitrability, his participation in the arbitration does not preclude him from challenging the arbitrator’s authority in court.”) (internal citation omitted). Further, to the extent that Bodylines participated in the arbitration hearings in order to resolve the question of arbitrability itself, such participation does not constitute waiver. The Supreme Court has held that “merely arguing the arbitrability issue to an arbitrator does not indicate a clear willingness to arbitrate that issue.” First Options of Chicago v. Kaplan, 514 U.S. 938, 946, 115 S.Ct. 1920, 131 L.Ed.2d 985 (1995). To the contrary, the Court noted in First Options, the fact that a party “forcefully objeet[s]” to having an arbitrator decide a dispute — as Bodylines clearly did — suggests an unwillingness to submit to arbitration. Id. See also Textile Unlimited v. A..BMH & Co., 240 F.3d 781, 788 (9th Cir.2001) (holding that party did not waive right to object to arbitration by participating in arbitration proceedings where the party “only participated in the arbitration to contest the arbitration itself’); Coady v. Ashcraft & Gerel, 223 F.3d 1, 9 n. 10 (1st Cir.2000) (holding that party’s objection to scope of arbitration was not waived by its participation in hearings because the party “consistently and vigorously maintained its objection to the scope of arbitration”). Thus, the district court was correct in finding that Bodylines had not waived its right to object to arbitration.