A federal court in Kentucky has confirmed that it is without authority to tinker with the venue clause in an arbitration agreement. The plaintiff subcontractor is from Kentucky, and the joint venture prime contractor partners from Massachusetts and Pennsylvania; the project is in Kentucky. The subcontractor filed suit in Kentucky, and the JV prime moved to compel arbitration in Boston, per the subcontract arbitration clause. The sub argued that the venue clause was "unfair and unreasonable." The court did not even consider that argument. Quoting from an Ohio federal court decision, the Kentucky court noted that "enforcement of a forum-selection clause . . . in an arbitration agreement may be inconvenient and burdensome to the parties in some instances." However, and more critically, the court "does not have the authority to invalidate a term of an arbitration agreement simply on the forum non conveniens argument that it is unfair, unreasonable, or inconvenient to one of the parties." (emphasis added)
As the arbitration clause is enforceable, the Kentucky sub will have to arbitrate its claims in Boston. The case is Weddle Enterprises, Inc. v. Treviicos Soletanche, J.V., 2014 U.S. Dist. LEXIS 146812 (W.D. KY, Oct. 15, 2014), available here (subscription required). This decision continues the tradition of the courts deferring to the arbitration forum on procedural issues, which would include venue.
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