Thursday, December 15, 2005

S.C. Court of appeals issues decision on validity of arbitration agreement

In Aiken v. World Finance, World Finance argued that the circuit court erred in denying their motion to compel arbitration. According to World Finance, once the court determined that an arbitration agreement existed between the parties, the court's "decisional function" was completed and any decisions regarding the validity of the agreement and the arbitrability of Aiken's claims were to be decided by an arbitrator. The court of appeals refused to decide this issue because World Finance did not raise this precise argument in their motion to compel arbitration, the circuit court did not address this issue in its order, and World Finance did not file a motion pursuant to Rule 59 of the South Carolina Rules of Civil Procedure to challenge this omission.

The court of appeals upheld the decision to deny arbitration because no "significant relationship" existed between Aiken's tort claims and the loan agreement which was subject to arbitration.

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