Question

Sunkist Growers Inc. brought Nabisco to court, claim- ing that under the companies' mutually agreed-on license agreement, Nabisco was causing Sunkist to engage in improper practices. Nabisco claimed that, under the license agreement, the companies had to settle the dispute through arbitration. However, Sun- kist claimed that it was a nonsignatory to the contract and thus did not have to settle through arbitration. Nabisco claimed that Sunkist was legally compelled to settle through arbitration, even though Sunkist had not signed the document, because the two parties admitted to the license agreement being an agree- ment between them and both companies' actions had been based on the agreement. How do you think the court decided? [10 F. 3d 753 (Ga. CA 11, 1993).]

Answer 1

As we know that arbitration is a form of contractual right which is commonly treated as an express decision to overcome the right of any kind of trails in the judicial system. The license agreement at issue here does not specify or make mention of any duties or obligations.

  However, the thing to be noticed in this case is that, in the absence of any written agreement for the arbitration, there is no restriction on the execution of arbitration process. Thus the decision should be in favor of conducting the arbitration.