Texas Supreme Court Denies Cert. Where Agreement Required Arbitrator to be Saudi National or Muslim Foreigner

The Supreme Court of Texas has denied a party’s petition for a writ of mandamus after the Houston [1^st] Court of Appeals held U.S. courts lacked authority to appoint an arbitration panel.

In In re Aramco Services Co., No. 01-09-00624-CV, (Tex. App. – Houston [1^st], March 19, 2010), DynCorp International, LLC and Aramco entered into a contract for a computer system which was to be manufactured in the U.S. and installed at Aramco’s offices in Saudi Arabia. The contract contained a Saudi “Choice of Law” provision and an arbitration clause which required an arbitrator to be “a Saudi national or a Moslem foreigner.” DynCorp filed suit in Houston seeking payment of certain monies pursuant to the contract. Aramco filed a motion to compel arbitration, which the trial court granted. DynCorp then filed a motion to compel arbitration before JAMS or the American Arbitration Association. Over Aramco’s objections, the trial court granted DynCorp’s motion in part and appointed a three party arbitration panel which consisted of two non-Muslims. Aramco sought a writ of mandamus from an appeals court.

The Houston Court of Appeals held that the trial court lacked authority to appoint an arbitral panel to decide the parties’ dispute. The Houston Court conditionally granted Aramco’s writ of mandamus and directed the trial court to vacate its previous orders. DynCorp then filed a petition for a writ of mandamus with the Supreme Court of Texas.

On February 25^th, the Supreme Court denied DynCorp’s petition in In re DynCorp International, LLC, No. 10-0798.

You can read Disputing‘s previous post about the case here.

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