After a de novo review of the District Court’s ruling denying a bank’s motion to compel arbitration, the United States Court of Appeals for the Second Circuit reversed and remanded a district’s court order. The plaintiff argued that there was a factual issue whether a valid overdraft protection agreement existed and this needed to be determined by the court prior to order the matter to arbitration. However, this argument “put the cart before the horse.” As far as the motion to compel arbitration, the court considered whether a valid arbitration clause existed and if so, was the dispute within the scope of the arbitration agreement. There was a valid arbitration agreement and the dispute was covered by it. Therefore, the issue of whether there was a valid overdraft protection should be decided pursuant to the arbitration agreement. The matter was reversed and remanded to the district court to comply with the order. Hatemi v. M&T Bank, No. 14-4338-cv (2d Cir. Mar. 4, 2016).
This post written by Barry Weissman.
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