Pak v. EoCell, Inc.

Background

EoCell, Inc. argued that the dispute arose out of or was connected with a Shareholders Agreement. That agreement contained an arbitration provision. The opinion states that the provision included a delegation clause, incorporated by reference, assigning the Hong Kong International Arbitration Center—not the federal court—the authority to decide whether the arbitration provision applies to the dispute.

Court’s analysis

The court identified one remaining threshold question: whether the Shareholders Agreement was enforceable against Michael Pak. The court treated Pak’s allegation in his original complaint that he and Sputnik were alter egos of each other as competent evidence supporting enforcement of the agreement against him. The court stated that there appeared to be no evidence pointing the other way.

The court also considered whether to send the matter back to state court. It stated that doing so would only delay the expected arbitration and that the dispute was an international business dispute rather than a local matter for which a federal court might ordinarily defer to a state court.

Tentative ruling and hearing

The court stated that it seemed clear that the motion to compel arbitration should be granted. It did not state an express final disposition of that motion in this order. Instead, the order directed Pak’s counsel to be prepared at the hearing to identify any flaws in the tentative ruling. Judge Vince Chhabria signed the order.