Intl Engy Ventures Manage v. Untd Engy Grp, 999 F.3d 257

Background

IEVM (consultant) alleges UEG failed to pay agreed finder’s fee after UEG acquired BP’s Pakistani assets; parties signed a 2012 supplemental agreement with a Texas choice-of-law clause and an AAA arbitration clause (single arbitrator in Houston).
IEVM filed suit in Texas state court in July 2013 without invoking the arbitration clause; UEG removed and moved to dismiss for lack of personal jurisdiction; the parties submitted a joint case‑management plan and IEVM sought remand.
IEVM later demanded arbitration (AAA). Arbitrator McGowan found IEVM had waived arbitration by substantially invoking the courts and dismissed the arbitration; IEVM did not seek to vacate that award but continued litigating the jurisdictional issues through appeals.
IEVM then initiated a second parallel arbitration before Arbitrator Davis; Davis concluded he could decide waiver and also found IEVM had waived arbitration (citing IEVM’s litigation conduct and its appellate strategy).
The district court vacated Davis’s award, held UEG failed to show prejudice from IEVM’s litigation, and compelled arbitration; the Fifth Circuit reversed, holding IEVM substantially invoked the judicial process and prejudiced UEG, so IEVM waived arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Who decides litigation‑conduct waiver (court or arbitrator)?	IEVM: waiver is for courts (presumption).	UEG: incorporation of AAA rules and prior arbitrator rulings show parties agreed to arbitrate waiver.	Court presumption controls: questions of litigation‑conduct waiver are presumptively for courts, absent clear and unmistakable agreement otherwise.
Does incorporation of AAA rules supply a "clear and unmistakable" agreement to arbitrate waiver?	IEVM: incorporation does not clearly delegate waiver questions to arbitrators.	UEG: AAA Rule giving arbitrators power over jurisdiction/scope shows clear intent to arbitrate waiver.	Incorporation of AAA rules here is not a clear and unmistakable waiver of the presumption; AAA rules do not expressly authorize arbitrators to decide litigation‑conduct waiver.
Did the parties submit the waiver question to the arbitrator by conduct (submission)?	IEVM: it did not consent to arbitrators deciding waiver; it repeatedly maintained waiver is judicial.	UEG: prior arbitrator proceedings and IEVM’s participation show submission.	No clear, mutual submission to McGowan existed; IEVM’s later participation does not show clear and unmistakable agreement to arbitrate waiver.
Did IEVM waive its right to arbitrate by substantially invoking the judicial process and prejudicing UEG?	IEVM: litigation stayed discovery, focused on jurisdictional issues, did not reach merits, and delays were often caused by courts and UEG’s removal/motions.	UEG: IEVM pursued litigation for years, appealed jurisdictional rulings, forced UEG to expend significant time and fees, causing delay and expense.	IEVM substantially invoked the courts (filed suit, sought remand, litigated jurisdiction, appealed) and caused delay and significant expense to UEG; prejudice established; waiver found and arbitration compelled to be denied.

Key Cases Cited

BG Group v. Republic of Argentina, 572 U.S. 25 (2014) (parties may contract around presumptions about who decides arbitrability if they do so clearly and unmistakably)
Nicholas v. KBR, Inc., 565 F.3d 904 (5th Cir. 2009) (waiver arises when a party substantially invokes the judicial process to the other’s prejudice)
Miller Brewing Co. v. Fort Worth Distrib. Co., 781 F.2d 494 (5th Cir. 1986) (federal standard governs waiver and prejudice analysis under the FAA)
Republic Ins. Co. v. PAICO Receivables, LLC, 383 F.3d 341 (5th Cir. 2004) (prejudice includes delay, expense, or damage to legal position caused by litigating party)
In re Mirant Corp., 613 F.3d 584 (5th Cir. 2010) (delay benchmarks and rejection of forum‑shopping to obtain a “second bite” via arbitration)
Petrofac, Inc. v. DynMcDermott Petroleum Ops. Co., 687 F.3d 671 (5th Cir. 2012) (express adoption of AAA rules can sometimes supply clear and unmistakable evidence for arbitrability, but context matters)
Marie v. Allied Home Mortg. Corp., 402 F.3d 1 (1st Cir. 2005) (parties should not be forced to arbitrate waiver by conduct absent a clear indication in the agreement)
Ehleiter v. Grapetree Shores, Inc., 482 F.3d 207 (3d Cir. 2007) (courts, not arbitrators, should decide litigation‑conduct waiver)