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Arbitration of related claims - Sixth Circuit says yes and no

In NCR Corp. v. Korala Assoc., Ltd., No. 06-3685 (6th Cir. Jan. 16, 2008), a U.S. appeals court dealt with the question whether a claim that was only tangentially related to a contract was required to be arbitrated because of the contract's arbitration clause. The court's answer was no, because adjudicating the tangential claim did not require reference to the contract:

Under this Court’s precedent, the following standard emerges for determining which of NCR’s claims must be resolved in arbitration: while we must bear in mind the presumption of arbitrability, the cornerstone of our inquiry rests upon whether we can resolve the instant case without reference to the agreement containing the arbitration clause. If such a reference is not necessary to the resolution of a particular claim, then compelled arbitration is inappropriate, unless the intent of the parties indicates otherwise. ...

NCR could not maintain a copyright infringement claim against KAL without referencing the 1998 Agreement. While a court would not need to reference the 1998 Agreement to determine if NCR owns a copyright for APTRA XFS, a court would need to reference the Agreement to determine what, if any, authorization NCR provided to KAL with respect to the APTRA XFS software contained on the ATM that NCR loaned to KAL under the 1998 Agreement. ...

We reach a different conclusion, however, with respect to NCR’s claim that KAL directly infringed the S4i software copyright. No reference to the 1998 Agreement is necessary to determine whether (1) NCR owns a copyright in the S4i software or (2) KAL was licensed or authorized to access and/or copy the S4i software.

Id., slip op. at 4, 5.

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