In Guam Industrial Services, Inc. v. Dresser-Rand Co., the First District Court of Appeals consdiered an accelerated interlocutory appeal from an order denying GIS's special appearance. Dresser-Rand and GIS had a contract for repair and restoration work, with Dresser-Rand suing GIS in district court. Dresser-Rand contended that the trial court had jurisdiction because the arbitration provision in the contract operated as a forum-selection clause where GIS consented to personal jurisdiction in Houston. In response, GIS filed a special appearance, which was denied.
The First Court of Appeals reversed the trial court's order and rendered judgment granting the special appearance.
The arbitration provision in the contract stated that "Judgment upon the award may be entered in any court having jurisdiction...The site of such arbitration shall be either in Buffalo, New York or Houston, Texas."
In its opinion, the First Court of Appeals held that "an arbitration agreement is a type of forum-selection clause" and, because forum-selection clauses are creatures of contract, a court should apply ordinary principles of contract interpretation in its review.
Citing the Fifth Circuit's opinion in International Energy Ventures Management, LLC v. United, the First Court of Appeals concluded that an agreement to arbitrate does not necessarily constitute consent to the personal jurisdiction of a Texas court to adjudicate the claim, unless personal jurisdiction exists under traditional minimum-contacts and due-process analyses. The arbitration agreement constitutes "consent to jurisdiction 'for the limited purpose of compelling arbitration....'" Further, by agreeing to arbitrate in a particular state, the state may exercise personal jurisdiction over the parties for the limited purpose of compelling arbitration.
Special thanks to Ronnie Hornberger for bringing this decision to our attention.
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