A Colorado federal court denied a party’s motion to compel arbitration, finding that the party had previously waived its right to arbitrate the dispute by defaulting and failing to pay its share of arbitration fees in an earlier arbitration involving the same contract and issue.
The lengthy procedural history regarding this case can be found here. In short, the dispute arose under a purchase agreement between the parties, NPL and Norgren, for certain parts produced by NPL to be used in Norgren’s products. NPL initially filed an arbitration demand against Norgren in 2009 (the “First Arbitration”), alleging that Norgren failed to pay amounts due under the purchase agreement. Norgren filed an Answer and Counterclaim, and paid its share of the arbitration filing fee and also paid its share of the estimated fees of the arbitrator assigned to the case. NPL failed to pay its share of the arbitrator’s estimated fees. After numerous communications with NPL, the arbitrator stayed the arbitration and then later granted Norgren’s motion to dismiss for NPL’s failure to pay the fees. Subsequently, NPL initiated a second arbitration in 2014 (the “Second Arbitration”). Norgren filed an objection to the arbitration and challenged the jurisdiction of the arbitrator and the arbitrability of NPL’s claims. It also commenced the Colorado litigation, in which NPL filed the motion to compel arbitration and stay the court proceedings.
The Colorado federal court held that NPL’s failure to pay the arbitration fees in the First Arbitration was a default and breach of the arbitration agreement, and thus NPL waived its right and was precluded from subsequently attempting to enforce that arbitration agreement in the Second Arbitration.
Norgren, Inc. v. Ningbo Prance Long, Inc., No. 1:14-cv-03070 (D. Colo. Sept. 22. 2015).