Firm that did not agree to arbitration cannot be compelled to give up litigation rights
American Marsh Pumps was brought into a dispute between Patriot Pumps and the John E. Green Company. Marsh was a supplier of equipment to Green, and under Green's contract with its General Contractor, all disputes between them were to be subject to arbitration at Green's sole option. Patriot Pumps attempted to apply this contract clause to require Marsh to arbitrate their dispute, and the trial court ordered Marsh to participate. The Court of Appeals overturned this decision and held that by its very terms, the contract did not offer Green the option of compelling another party to arbitrate disputes.
Michigan law favors arbitration and other forms of alternative dispute resolution, however, the Courts also must zealously protect citizens' constitutional and due process rights. As a result, a waiver of jury trial rights, in particular, must be knowingly and consciously made in order to be enforceable.