SW Legal Educational Publishing

Failure to Arbitrate Does Not Allow Litigation Instead
Description A failure of a party to arbitrate denies right to litigate international commercial contract claim. Otherwise, parties could simply ignore arbitration so as to force a matter directly into court.
Topic International
Key Words Arbitration, U.N. Convention
C A S E   S U M M A R Y
Facts Quasem, a Bangladesh company, bought thousands of bales of cotton from Mask, a Tennessee cotton broker. Contracts all stated that any disagreement was subject to arbitration by the Liverpool Cotton Association (LCA), which required the complaining party to submit the complaint and evidence within a certain time, which was not done. Quasem, complaining about the quality of cotton, sued Mask in federal court after LCA refused to grant Quasem a time extension so it could file a complaint. Mask moved for dismissal of the suit.
Court Decision Suit dismissed. The U.N. Convention on the Recognition and Enforcement of Foreign Arbitrable Awards is codified in federal law, which require courts to uphold arbitral awards unless the agreement was not valid, the contract applied to a party not from a signatory country, or the agreement did not arise from a commercial relationship. Those conditions were not met, so the arbitration clause was binding. Quasem lost its arbitration rights by not acting in a timely manner; the courts will not give such parties a second shot at resolving their complaint.
Citation Quasem Group, Ltd. v. W.D. Mask Cotton Co., 967 F.Supp. 288, W.D., Tenn., 1997

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