TRAFIGURA PTE. LTD., Appellant
CNA METALS LIMITED, Appellee
Appeal from the 434th Judicial District Court Fort Bend
County, Texas Trial Court Cause No. 13-DCV-210802-B
consists of Justices Boyce, Busby, and Wise.
William J. Boyce Justice
principal issue on appeal is whether the trial court or an
arbitrator determines arbitrability of the plaintiff's
claims. The challenged order was signed by the trial court,
which determined that the claims at issue are not arbitrable.
Because an arbitration agreement existed between the parties,
and because that agreement assigns arbitrability
determinations to the arbitrator, we conclude the trial court
erred by making the determination. Accordingly, we reverse
and remand to the trial court for proceedings consistent with
Trafigura Pte. Ltd. contracted in January 2013 to buy 70, 000
metric tons of iron ore from appellee CNA Metals Limited (the
"First Contract"). This contract included a
broad-form arbitration agreement submitting all disputes to
arbitration in England under the United Kingdom's
to CNA, a smaller scrap-metal trading company called Jace
Metals and Minerals, L.L.C. acted as CNA's agent in
connection with the First Contract. CNA allegedly advanced
funds to Jace with the expectation that Jace would use them
to purchase the iron ore promised to Trafigura in the First
of Jace's alleged failure to secure sufficient iron ore,
CNA delivered only 40, 989.13 of the 70, 000 contracted-for
metric tons of iron ore. CNA admitted in its live petition
below that it breached the First Contract by delivering only
a portion of the contracted-for ore, but contended that
Trafigura accepted the lesser amount in late March 2013 and
paid CNA $4, 302, 211.60 for the ore in April 2013. CNA
alleged that, unknown to it, Jace still possessed a
substantial amount of iron ore purchased with CNA funds.
allegedly approached Trafigura in June 2013 without CNA's
knowledge and proposed to sell Trafigura 80, 000 additional
tons of iron ore. Jace and Trafigura allegedly entered into a
new contract (the "Second Contract"), and Jace
allegedly sold Trafigura the iron ore in exchange for
approximately $4 million. Jace is alleged to have kept this
amount for itself. CNA alleged that at least a portion of the
iron ore Jace sold to Trafigura under the Second Contract was
purchased using funds CNA had advanced to Jace to purchase
ore under the First Contract.
sued Jace and its principals in November 2013, and added
Trafigura as a defendant in November 2015. CNA alleged that
Trafigura engaged in conversion of CNA's iron ore and
engaged in a conspiracy with Jace "to fraudulent[ly]
purchase, from Jace, iron ore it knew belonged to CNA."
moved to stay proceedings and compel arbitration pursuant to
the arbitration clause in the First Contract. After hearing
arguments from the parties, the trial court denied
Trafigura's motion to compel arbitration on June 16,
2016. The trial court made the following findings in its
1. On January 22nd, 2013 Plaintiff CNA entered into a
purchase contract (hereinafter referred to as the
"contract") with Defendant Trafigura PTE that
contained a broad form arbitration agreement.
2. That while the relationship between the parties may have
begun in this contract, or bear some evidentiary relationship
to this contract, that the subject matter of the causes of
action do not fall within the scope of the arbitration
agreement, and can be maintained without reliance/reference
to the contract.
timely filed this interlocutory appeal. See Tex.
Civ. Prac. & Rem. Code Ann. § 51.016 (Vernon 2015)
(in a matter subject to the Federal Arbitration Act, an
appeal may be taken from an interlocutory order of a district
court under the same circumstances that an appeal from a
federal district court's order or decision would be
permitted by 9 U.S.C. § 16); 9 U.S.C.A. §
16(a)(1)(C) (West 2009) (under FAA, appeal may be taken from
order denying application to compel arbitration); In re
Helix Energy Sols. Grp., Inc., 303 S.W.3d 386, 396 (Tex.
App.-Houston [14th Dist.] ...