Rhode Island: Expiration Clause Trumps Arbitration Clause (Web)
June 27, 2006
Rhode Island Supreme Court Finds that Contract’s Expiration Clause Trumps Arbitration Clause in Dispute Over Contract’s Duration
In Radiation Oncology Associates, Inc. v. Roger Williams Hosp., 2006 WL 1689209 (R.I. 2006) the Rhode Island Supreme Court held that an intent to submit the particular dispute at issue to arbitration could not be inferred from the broad language of a services agreement, when the contract itself had expired by its terms.
In a dispute over the duration of a general, commercial contract between Radiation Oncology Associates (ROA) and Roger Williams Hospital, ROA sought to appoint an arbitrator pursuant to the Rhode Island Arbitration Act, while Roger Williams Hospital filed a motion to enjoin arbitration.
ROA argued that since the law imposes a “presumption” in favor of arbitration, the broad language within the services agreement’s arbitration clause that “‘all disputes’ arising under the agreement ‘shall be settled by arbitration,’" called for settlement of the action by arbitration.
The issue before the court was whether the parties manifested an intent to submit the dispute to arbitration in their services agreement.
Justice Paul A. Suttell examined the expiration provision in paragraph 22(a) of the services agreement which reads: "’If an extension or substitute contract is not signed by the parties prior to December 31, 2004, this Agreement shall be null and void and of no further effect.’”
In affirming the decision of the Superior Court to deny ROA’s motion to appoint an arbitrator and to grant Roger Williams Hospital's motion to enjoin arbitration, Justice Suttell notes that the parties did not intend to submit duration disputes to arbitration because their agreement included a date certain for expiration.
By John Ousley, CPR Intern