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Seikaly v. Seikaly

United States District Court, D. Maryland

August 29, 2019



          Charles B. Day United States 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. See Local Rule 105.6 (D. Md.). For the reasons set forth below, the Court GRANTS IN PART Defendants' Motion.

         I. Analysis

         A. Applicable Legal Standard.

         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).” Stone v. Wells Fargo Bank, 361 F.Supp.3d 539, 548 (D. Md. 2019). It is without question that an agreement that requires binding arbitration is a forum-selection clause. Scherk v. Alberto-Culver Co., 417 U.S. 506, 519 (1974). The Court may decide to hold an evidentiary hearing on the matter, but if it decides not to do so, then the plaintiff only has to make a prima facie showing that venue is proper, and all inferences are viewed in the light most favorable to the plaintiff. Mitrano v. Hawes, 377 F.3d 402, 405 (4thCir. 2004); Aggarao v. Mol Ship Mgmt. Co., 675 F.3d 355, 366 (4th Cir. 2012). Unlike motions to dismiss under Fed.R.Civ.P. 12(b)(6), under Rule 12(b)(3), the Court is permitted to consider exhibits submitted by the parties. Sucampo Pharm. Inc. v. Astellas Pharma, Inc., 471 F.3d 544, 549-50 (4th Cir. 2006). In this instance, the Court will not hold an evidentiary hearing, but will consider the issues in the light most favorable to Plaintiff.

         B. The Agreement to Arbitrate Requires This Court to Enter a Stay of the Present Proceedings.

         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 et. seq., (2009) (the “FAA”). These rules are applicable to foreign arbitrations, as the United States has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “Convention Act”) found at 9 U.S.C. §§ 201-08 (2009). Furthermore, this Court is satisfied that the Agreement is enforceable under the Convention Act given that it meets the four required elements, namely that:

1) there is an agreement in writing within the meaning of the Convention; 2) the agreement provides for arbitration in the territory of a signatory of the Convention; 3) the agreement arises out of a legal relationship, whether contractual or not, which is considered commercial; and 4) a party to the agreement is not an American citizen, or that the commercial relationship has some reasonable relation with one or more foreign states.

Balen v. Holland Am. Line Inc., 583 F.3d 647, 654-55 (9th Cir. 2009).

         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, . . . .” Id. “In the event that a Party refuses to cooperate with a discovery request, the Arbitrators and/or any Party acting upon a discovery order issued by the Arbitrators, shall have the right of recourse to any court having jurisdiction, to obtain an Order mandating compliance.” Id., at 5. The claims and/or relief pursued by Plaintiff in this Court are devoid of any order issued by the Arbitrators or any other determination by the Arbitrators.

         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.” Hooters of Am., Inc, v. Phillips, 173 F.3d 933, 937 (4th Cir. 1999). Plaintiff however, comes to the Court nonetheless. In his estimation, too much time has passed and too many assets might eventually be frittered away while he continues to wait for a final determination. The arbitration has been proceeding for more than a decade. Plaintiff also contends there are procedural irregularities not being addressed. Pl.'s Opp'n 5. Plaintiff even expresses his fear of corruption without claiming that said corruption touches upon or even taints the on-going arbitration proceedings.

         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.

         C. This Court has Discretion to Enter an Order to ...

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