Solymar Investments, Ltd. v. Banco Santander S.A.
672 F.3d 981
11th Cir.2012Background
- Holding Corporations sued Santander group over losses from Madoff-related investments via Optimal Strategic; Exchange Agreement with arbitration clause was formed amid settlement negotiations.
- Exchange Agreement contained integration clause and broad release of claims; arbitration clause required disputes to be resolved by arbitration; forum clause pointed to Geneva.
- Settlement discussions included an English version delivered with time pressure; multiple drafts existed but district court treated Exchange as binding.
- District court dismissed Amended Complaint under FAA impediments; Granite Rock/Prima Paint two-step framework guided arbitrability analysis.
- Eleventh Circuit affirmed, holding formation challenges resolved by court first, then arbitrability under Prima Paint; all claims fell within arbitration scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who decides formation challenges to contracts with arbitration clauses | Holding Corp.: Granite Rock overrides Prima Paint | Santander: Granite Rock preserves court-arbitrator split | Granite Rock two-step process; formation challenges decided by court first |
| Whether Exchange Agreement is binding and not subject to parol evidence | Holding Corp.: parol evidence shows broader agreement | Santander: integration clause; agreement facially complete | Exchange Agreement facially complete; parol evidence refused; binding |
| Whether the Amended Complaint falls within the arbitration clause | Holding Corp.: claims relate to comprehensive settlement | Santander: all disputes arising from agreement are arbitrable | All counts encompassed by arbitration clause; dismissal appropriate |
Key Cases Cited
- Granite Rock Co. v. International Brotherhood of Teamsters, 130 S. Ct. 2847 (Supreme Court 2010) (gateway formation determination precedes arbitration)
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (Supreme Court 1967) (courts decide validity of arbitration clause; re formation left to arbitrator)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (Supreme Court 2006) (arbitrability and severability; validity of contract vs arbitration clause)
- Rent-A-Center, West, Inc. v. Jackson, 130 S. Ct. 2772 (Supreme Court 2010) (arbitration clauses on equal footing; doubts resolved in favor of coverage)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (Supreme Court 1995) (doubts resolved in favor of arbitration coverage)