Court Rejects Arbitration in Tacoma Narrows Bridge Dispute
Samsung entered into a purchase order with Nippon Steel to provide the bridge deck for the new Tacoma Narrows Bridge, a design-build project awarded by the WSDOT to a Bechtel-Kiewit joint venture known as Tacoma Narrows Constructors (TNC). Nippon Steel was a first-tier subcontractor to TNC.
Delays and changes related to the bridge deck resulted in disputes, which in turn spawned two lawsuits in Thurston County Superior Court -- (1) a suit by TNC vs. Nippon Steel and (2) a suit by Nippon Steel vs. Samsung and TNC.
Samsung sought to invoke the Singapore arbitration clause in the purchase order and thereby stay the Superior Court action against it. In a decision favoring joinder of interrelated disputes, Division 2 held that Samsung may not compel arbitration because of an exception contained in the arbitration clause. Under that exception, the duty to arbitrate did not extend to any dispute which arises "in connection with the TNC Contract" if Nippon Steel is "of the opinion that such dispute touches or concerns" the work of Samsung.
The Court concluded the arbitration clause did not apply because there was a "high degree of connection" factually between the claims made in the TNC suit against Nippon Steel and Nippon Steel's suit against Samsung.
The decision is also notable for the Court's strong statement that the issue of arbitrability itself -- that is, whether the court has jurisdiction or not -- is for the Court to decide not the arbitrator, absent a clear delegation to the contrary in the arbitration clause.
Copy of decision also available here Download file
