CHARLES B. DAY, Magistrate Judge.
Before this Court is Defendant's Rule 12(b)(3) Motion to Compel Arbitration and Dismiss or, in the Alternative, Stay Proceedings Pending Arbitration (ECF No. 22) ("Defendant's Motion"). The Court has reviewed the Motion, related memoranda and applicable law. No hearing is deemed necessary.
This Court has recently stated that "a challenge based on a forum-selection clause, including an arbitration clause, should be addressed by way of a motion to dismiss for improper venue under Rule 12(b)(3)."
There is no dispute but that the parties agreed to arbitration and that all disputes presently between the parties are arbitrable when they agreed in writing to the Arbitration Submission Agreement (the "Agreement") (ECF No. 1-1). Moreover, the parties have been participating in the arbitration of the present disputes for many years. Pl.'s Opp'n 3; Compl. ¶¶ 6-11. "Plaintiff is not at this time asking this Court to take over the arbitration on the merits. . . . Rather, in this lawsuit, Plaintiff seeks injunctive and other equitable relief from Defendant, . . . ." Pl.'s Opp'n 2.
The disputes between the parties are governed in the first instance by the Agreement, and the Agreement is governed by the Federal Arbitration Act, 9 U.S.C. § 1
The claims are arbitrable, as the Agreement states that the "Parties agree that they may present any form of claim or dispute including, but not limited to claims for accountings." Agreement 2. "All Disputes . . . shall be finally settled under the rules of conciliation and arbitration at the Beirut Chamber of Commerce and Industry (CCIB) by three arbitrators appointed in accordance with the said Rules, . . . ."
Fourth Circuit law is abundantly clear. "When a valid agreement to arbitrate exists between the parties and covers the matter in dispute, the FAA commands the federal courts to stay any ongoing judicial proceedings and to compel arbitration."
In consideration of the facts and factors set forth above, the Court believes the entry of a stay of all proceedings in the federal court for the District of Maryland is appropriate.
The present lawsuit has been filed for the purpose of obtaining an accounting and an order to preserve all assets of the Other Ventures as defined in the Agreement. Plaintiff wants "disclosure of the financial records regarding Other Ventures." Comp. ¶ 28. Plaintiff is fearful that the assets are being dissipated. Comp. ¶ 31. One legal maxim permits the exercise of equitable jurisdiction when there is no adequate remedy at law. Plaintiff contends that the years of frustration in the arbitration proceeding satisfies this maxim. While this is very doubtful, it is clearly a matter of discretion for this Court.
As for the dissipation concern, this Court has the authority even in a case governed by the FAA, to issue the requested injunctive relief. When persuaded that assets will not be available by the time an arbitration is concluded, the Court can use its equitable powers to maintain the status quo. The exercise of this power is a discretionary one.
Here, the Court declines Plaintiff's invitation. The Agreement is very broad in scope and clear regarding the intent of the parties in many respects. It states that each signatory acknowledges that they are receiving "mutual benefits" by the election to use arbitration. They agreed it to be "the most convenient, expeditious, economical, and private procedure for finally resolving all of their Disputes." Agreement 2. While there were many expectations between the parties as to the efficiencies and speed by which resolution of their dispute could be accomplished, they did not agree to a "get out of arbitration provision" should the matters not proceed according to expectations. The Agreement merely states that "[t]he Parties also agree to collaborate with the Arbitrators in order to ensure that a final arbitral award(s) is reached within Twelve (12) months starting the date of final constitution of the arbitral tribunal." Agreement 2.
Plaintiff brings the present action upon his "information and belief" that assets are being dissipated. In fact, it was upon Plaintiff's action that "the arbitration was ordered suspended, . . . pending a ruling on a Motion to Dismiss the arbitration." Comp. ¶ 16. In doing so, Plaintiff notes a number of procedural due process type grievances. The core of these concerns was appealed to the Lebanese Court of 1st Instance in Beirut (4
Under the Agreement, the parties enjoy a full range of the tools of discovery. Moreover, if a party is frustrated in its efforts to obtain discovery, it can seek relief from the Arbitrators who can issue discovery orders which can be enforced by a court. Agreement 5.
By its terms, the Agreement covered "any form of claim or dispute including, but not limited to, claims for accountings . . . ." Agreement 2. It is this accounting that Plaintiff seeks here. But the law strongly suggests that the Court should enter a stay until the arbitration has concluded. The FAA states in pertinent part,
9 U.S.C. § 3. This is precisely the situation presented by Plaintiff's filing of suit. Not only is the present matter referable to arbitration, the parties are mired in the depths of the process. To the extent Plaintiff complains of the need to preserve assets, the very concern was contemplated by the parties as a matter to be governed by the arbitration process. Agreement 3-4. Concerns about the procedural disputes aside, this Court is not moved to intercede on the present record. Should the Arbitrators declare an award for Plaintiff, or the need for court enforcement of a preservation order, then the parties are free to seek enforcement from this Court.
For the reasons set forth above, the Court hereby STAYS all proceedings in this Court. In the event judicial assistance is needed to enforce an order of the Arbitration panel, or of the judgment of the Arbitration panel, then the parties are free to pursue said assistance from this Court. A separate Order shall be filed.