Texas Court of Appeals Rules on Interlocutory Appeal of Motion to Compel Arbitration

In Schlumberger Technology Corp. v. Baker Hughes Inc., No. 01-11-00562 (Tex.App. – Houston [1st Dist.] Oct. 13, 2011) Schlumberger Technology Corp. (“Schlumberger” ) and Baker Hughes Inc. (“Baker Hughes”) are in an arbitration proceeding to resolve a patent infringement dispute. During the arbitration, a disagreement arose about whether the presiding panel of arbitrators has jurisdiction to determine an issue raised by Baker Hughes. Schlumberger contends that the issue should be resolved by the same panel. However, Baker Hughes argues that the issue is governed by a prior settlement agreement and must be resolved by the mediator who facilitated that agreement.

Baker Hughes and Schlumberger filed motions in trial court in accordance with their respective positions. The trial court granted Baker Hughes’s requested relief and denied Schlumberger’s motion. Schlumberger appealed.

The Texas Court of Appeals for the First District concluded that (a) it had jurisdiction over the interlocutory appeal and (b) the parties agreed to let the arbitrators resolve their disagreement about the proper arbitral forum for their dispute and that the trial court should have compelled arbitration of that issue. Accordingly, the court reversed the trial court’s order denying Schlumberger’s motion and remanded the case for further proceedings consistent with the opinion.

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