Per CaseMaker ® Digest:

Issue of whether the defendant should be required to pay a deposit in underlying arbitration was procedural, left to the discretion of arbitrators. Thus, the trial court erred when it granted the order to compel the defendant to pay the required deposit.

Dealer Computer Services Inc. v. Old Colony Motors Inc., Fifth Circuit Court of Appeals

Date decided:  November 19, 2009

Docket number: 09-20049

Judge:  William Lockhart Garwood

The plaintiff company sued under 9 U.S.C. section 4 to compel the defendant company to pay a deposit in the underlying arbitration. In that arbitration, the defendant informed the arbitrators that it could not afford to pay its share of the required deposit before the final arbitration. The arbitrators asked the plaintiff to pay the full deposit. The plaintiff refused and brought the instant suit to compel the arbitration. The district court ordered the defendant to pay its share of the deposit. The Fifth Circuit reversed the district court’s judgment. The court held that the issue of whether the defendant should be required to pay was a procedural issue left to the discretion of the arbitrators. Thus, the trial court erred when it granted the order to compel the defendant to pay the required deposit.