Refrigerant Importers Tell 11th Circuit to Reverse Fla. Court Order Denying Arbitration

The U.S. District Court for the Middle District of Florida was wrong to deny refrigerant importer BMP International's motion to compel arbitration in a case brought by Chinese company T.T. International Co. (TTI) for unpaid invoices, BMP argued in its opening brief at the U.S. Court of Appeals for the 11th Circuit. The district court had said that the motion for arbitration was waived by BMP, along with joint venture iGas USA, after the companies failed to raise the issue in an earlier case involving TTI and BMP (T.T. International Co. v. BMP International, 11th Cir. # 23-11978).

BMP argued that, contrary to the district court's ruling, "a party only waives its right to arbitrate subsequent claims if the claims present the same facts and legal issues," noting that this "test was not met" in the present instance. The claims TTI advances in this suit are based on 2018 shipments and are completely distinct from the claims in the earlier case, BMP told the appellate court.

BMP started buying refrigerant goods from TTI in 2012, though the business was phased out over time. In 2018, the joint venture iGas was formed between BMP's president, a Chinese manufacturer and TTI. The JV agreement included a binding arbitral clause, the brief said. In 2019, TTI sued BMP and iGas for unpaid voices from 2017 to 2018. The JV settled with TTI, but BMP was not so lucky, being held liable by the court for "unjust enrichment."

While that breach of contract suit was pending, TTI filed another suit alleging that BMP illegally transferred equipment to iGas and that the BMP entities illegally transferred their right to seek the HFC refrigerant allowances to iGas Holdings. The district court tossed BMP's motion to compel arbitration on the illegal transfer claims, finding that the motion was waived in the breach of contract suit.

BMP, along with iGas, said on appeal that this dismissal was erroneously granted. The trial court ruled that the defendants waived the ability to arbitrate when only some of the present defendants defended against different claims in a different suit, the brief argued. The claims in the present proceeding are based on 2018 transfers. Not one of the claims here overlaps with the arguments in the breach of contract case, BMP said.

The importers said that once this error is reversed, "it becomes clear that TTI's fraudulent transfer claims must be compelled to arbitration before the Shanghai International Economic and Trade Arbitration Commission Arbitration Center." The joint venture agreement is subject to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, making the Shanghai institution the proper place for the dispute, as the parties to the JV are from different nations.

BMP added that only one of the convention's elements was challenged at the trial court -- whether there's a written agreement to arbitrate -- further noting that since TTI signed the JV and the scope of the contract directly relates to the fraudulent transfer claims, the court must compel arbitration. While TTI said it wasn't party to the JV, BMP said that, although the trial court didn't rule on this claim, the company is "plainly bound" by the JV's arbitration clause.