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Ruling on Arbitration and Standard of Review Issues

By FindLaw Staff on March 02, 2010 10:22 AM

In Powershare, Inc. v. Syntel, Inc. No. 09-1625, the First Circuit decided an issue of whether a parties' agreement contained a mandatory arbitration provision.

In reversing the decision of the district court, the First Circuit first clarified the standard of review to be used by a district judge when reviewing a magistrate judge's order on a motion to stay litigation pending the resolution of a parallel arbitration proceeding.  The court held that, from a procedural standpoint, the district judge properly applied the "clearly erroneous or contrary to law" standard under Rule 72(a) where, as in this case, review of a non-dispositive motion by a district judge turns on a pure question of law.

On the merits of the case, the court held that the parties' agreement contained a mandatory arbitration provision based on the only sensible reading of the agreement.

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