| j Appellants BDO Seidman, LLP, Mark Puckett, and James Cross (“BDO”) appeal from the Sebastian County Circuit Court’s denial of their amended motion to compel arbitration against appellees SSW Holding Co., Inc., Straits Steel & Wire, Co., and Straits Diversification, LLC (“SSW Holding”). On appeal, BDO argues (1) that the circuit court erred in denying arbitration because the claim of fraud in the inducement must be resolved by the arbitrator and not the courts, (2) that arbitration cannot be avoided because of unconsciona-bility, and (3) that all of the claims raised fall within the scope of the broad arbitration provisions. An order denying a motion to compel arbitration is an immediately appealable order. Ark. R.App. P.-Civ. 2(a)(12) (2011); Ark.Code Ann. § 16-108-228 (Repl.2006); see IGF Ins. Co. v. Hat Creek P’ship,
|2I. Procedural Background
SSW Holding filed a complaint against BDO and other defendants
Some of the defendants removed the case to the United States District Court, Western District of Arkansas, asserting that federal-question jurisdiction existed. The district court disagreed that it had subject-matter jurisdiction and remanded the case to the Circuit Court of Sebastian County. In Sebastian County Circuit Court, BDO filed an amended motion |sto compel arbitration and stay the action.
2001 Consulting Agreement:
Dispute Resolution.
8. (d) If any dispute, controversy or claim arises in connection with the per-
11. Governing Law. This agreement shall be governed and construed in accordance with the laws of the State of New York, except for its conflict of law principles.
2003 Consulting Agreement:
9. (d) If any dispute, controversy or claim arises in connection with the performance or breach of this Agreement (including the validity or enforceability of this Agreement) and cannot be resolved by faсilitated negotiations (or the parties agree to waive that process) then such dispute, controversy or claim shall be settled by arbitration. The arbitration proceeding shall take place in the city in which the BDO Seldman office providing the relevant services exists, unless the parties agree to a different locale. The proceeding shall be governed by the provisions of the Federal Arbitration Act (“FAA”) or, if a court of competent jurisdiction determines the FAA inapplicable, by the laws of the state in which the proceeding is to take place. In any arbitration instituted hereunder, the proceedings shall proceed in accordance with the then current Arbitration Rules for Professional Accounting and Related Disputes of |4the American Arbitration Association
(“AAA”), except that no pre-hearing discovery shall be permitted unless specifically authorized by the arbitration panel. 12. Governing Law and Severability. This Agreement, shall be governed by, and construed in accordance with, the laws of the State of Michigan (without giving effect to the choice of law principles thereof).
SSW Holding filed a responsе to the amended motion to compel arbitration and stay this action. SSW Holding stated that the 2001 Consulting Agreement contained an arbitration provision and that New York law governed. SSW Holding argued that under New York law, the arbitration provision was invalid and unenforceable because fraud permeated the entire Consulting Agreement. As a basis for denying the motion, SSW Holding also asserted that the claims against BDO were outside the scope of both arbitration provisions as those provisions only covered disputes arising “in connection with the performance or breaсh” of the Consulting Agreements, which specifically stated that they do not apply to investment advice and services. Finally, SSW Holding stated that the arbitration provision in the 2001 Consulting Agreement was procedurally and substantively unconscionable under New York law and that the arbitration provision in the 2003 Consulting Agreement was substantively unconscionable under Michigan law because (1) the arbitration provisions violate public policy as they were part of a conspiracy to commit criminal fraud, (2) BDO was the sole creator of the provisions, (3) the provisions contain unreasonable and impermissible limits on discovery, and (4) the provisions impermissibly preclude SSW Holding’s right to recover punitive damages. The response included voluminous exhibits of actual pleadings in criminal cases wherein some of the original defendants, their officers, and employees had been charged or convicted of offenses arising ¡from the performance of DDS with other clients.
BDO replied that all of the claims raised in the complaint related to services that it agreed to provide pursuant to the Consulting Agreements, which contain a broad provision mandаting arbitration of “any dispute, controversy or claim aris[ing] in connection with the performance or breach of this agreement.” BDO contended that under New York law the arbitration clause must provide that New York law governed its “enforcement” and as that language was absent from the 2001 Consulting Agreement, the FAA applied. BDO asserted that the FAA required arbitration of the fraudulent-inducement claim. BDO also argued that because the claim of un-conscionability concerned the contract as a whole, as opposed to only the arbitration provision, arbitrаtion and not the court must decide the issue.
After a hearing, the circuit court entered an order denying BDO’s amended motion to compel arbitration. The court found that New York law governed the 2001 Consulting Agreement and that the FAA does not apply and does not preempt New York law. The order stated that BDO could not enforce the 2001 arbitration provision because BDO committed fraud as part of a grand scheme that permeated the entire 2001 Consulting Agreement and its arbitration provision. The court further held that BDO could not enforce the arbitration clause in the 2001 Consulting Agreement because it was pro-eedurally and substantively unconscionable. The court also found that BDO could not enforce the arbitration provision in the 2008 Consulting Agreement because pursuant to the FAA the arbitration clause was proeedurally and substantively unconscionable under Michigan law.
| fiII. Standard of Review
We review a circuit court’s order denying a motion to compel arbitration de novo on the record. S. Pioneer Life Ins. Co. v. Thomas,
BDO argues that it was error to deny its amended motion to compel arbitration because (1) SSW Holding’s claim of fraud in the inducement must be resolved by the arbitrator and not the courts; (2) SSW Holding may not avoid arbitration due to alleged unconscionability; and (3) all of SSW Holding’s claims falls within the scope of the parties broad arbitration provisions. To resolve these arguments, we reframe the issues as (1) whether New York law or the FAA governs the enforcement of the arbitration provision in the 2001 Consulting Agreement; (2) whether any of the claims raised by SSW Holding in its complaint are subject to arbitration; and (3) whether SSW Holding’s assertion of unconscionability and fraud renders the arbitration provisions in the 2001 and 2003 consulting agreements unenforceable.
17III. New York Law or the FAA
Because arbitration is a matter of contract between the parties, it is a way to resоlve those disputes — but only those disputes — that the parties have agreed to submit to arbitration. First Options of Chicago, Inc. v. Kaplan,
BDO argues that the FAA governs the question of arbitrability. Specifically, BDO contends that while the arbitration provision in the 2001 Consulting Agreement states New York law applies, it does not contain the specific “enforcement” language necessary to trigger enforcement pursuant to New York law; therefore, the FAA applies. SSW Holding counters that the arbitration clause choice-of-law provision explicitly states that any “dispute, controversy or claim shall be settled by arbitration in accordance with the laws of the State of New York,” and that no special language is necessary. The import of whether New York |sIaw governs the enforcement of the arbitration provision in this case is that under New York law, unlike the FAA, the issue of arbitrability is for the court to decide. See Smith Barney, Harris Upham & Co. v. Luckie,
BDO cites Diamond Waterproofing Systems, Inc. v. 55 Liberty Ownеrs Corp.,
[a] choice of law provision, which states that New York law shall govern both “the agreement and its enforcement,” adopts as “binding New York’s rule that threshold Statute of Limitations questions are for the courts.” In the absence of more critical language concerning enforcement, however, all controversies, ... are subject to arbitration.
Id. at 807 (emphasis in original) (internal citations omitted).
BDO also cites to All Metro Health Care Services, Inc. v. Edwards,
The arbitration clause in the 2001 Consulting Agreement at issue here states “If any dispute, controversy or claim arises in connection with the performance or breach of this agreement ... then such dispute, controversy or claim shall be settled by arbitration in accordance with the laws of the State of New York.” The “enforcement” language necessary under New York law is absent. Therefore, based on the clear holdings of Diamond Waterproofing and All Metro Health Care Services, we conclude that the FAA applies to whether arbitration is decided by the court or an arbitrator. See 9 U.S.C. § 2 (2009) (stating FAA applies to any written agreement to arbitrate “a contract evidencing a transaction involving commerce”). Because the FAA governs the arbitration provision in the 2001 Consulting Agreement, we reverse the circuit court’s finding that New York law governs.
IV. Claims Within Scope of Arbitration Provision
We havе determined that the FAA governs the 2001 Consulting Agreement and the parties agree that the FAA governs the 2003 Consulting Agreement. We now determine whether SSW Holding’s claims fall within the scope of the parties’ arbitration agreements. |inThe FAA provides,
If any suit or proceeding is brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.
9 U.S.C. § 3. The FAA is a congressional statement of a liberal policy favoring arbitration agreements. Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
BDO asserts that both of the arbitration provisions cover “any dispute, controversy or claim arising] in connection with the performance or breach of this agreement,” and that|nSSW Holding’s claims are closely connected to the parties’ Consulting Agreements. In contrast, SSW Holding contends that BDO intentionally omitted the DDS from the scope of the services to be rendered in the Consulting Agreements, and because the claims in the complaint arise from the DDS, they are not within the scope of the arbitration provisions. As further proof that the claims do not fall within the arbitration provisions, SSW Holding posits that each Consulting Agreement “specifically states that it does not apply to ‘investment’ advice and services.”
While SSW Holding correctly notes that the agreements specifically state BDO is not in the business of providing investment advice or services, we agree with BDO that SSW Holding’s claims directly relate to the DDS, which involve tax-planning advice. Both Consulting Agreements have a section heading entitled “Services” which state:
2001 Consulting Agreement: Services
(a) During the term, BDO agrees to provide the following consulting services to the Client (the “Services”): consulting services in conjunction with the sale of equity interest(s) in certain entities, including assistance in determining the overall effects of potential sales price(s) and allocations thereof, assisting the Client and/or the Client’s advisors in structuring the transaction(s) to attain the most beneficial tax results, and assisting with certain income tax, estate tax, personal financial planning and other financial aspects of various anticipated investment activities. BDO is not in the business of providing investment or legal advice or related services, thus, nonе of the services to be rendered by BDO to Client can or will include investment or legal advice and should not be considered as investment or legal advice. Client acknowledges and represents that it will, and is, not relying upon BDO for investment or legal advice or related services.
2003 Consulting Agreement: Services
(a) During the Term, BDO agrees to provide the following tax consulting services to the Client (the “Services”): tax consulting services in conjunction with certain income tax, and other financial aspects of various anticipated investment activities. These tax | ^consulting services will also include assistаnce with the tax ramifications of various hedging, interest rate swaps and related financial derivative transactions that the Client is contemplating. BDO is not in the business of providing investment or legal advice (other than with respect to tax matters) or related services, thus, none of the services to be rendered by BDO to Client can or will include investment or legal advice (other than with respect to tax matters) and should not be considered as investment or legal advice. Client acknowledges and represents that it will, and is, not relying upon BDO for investment or legal advice or related services.
In the complaint, SSW Holding seeks compensation “against their professional advisors for damages arising from a tax-advantaged investment strategy involving investments in distressed debt that [SSW Holding] entered into and utilized on their federal tax returns for the 2001-2005 tax years.” We do not agree that the limiting language under the sections entitled “services” is dispositive of whether the claims fall within the scope of the matters to be arbitrated. The services that BDO agreed to furnish, and apparently did furnish in the form of the DDS, involve matters SSW Holding presents in its complaint. Resolving this issue under the FAA, any doubt that we might have regarding whether the claims in the complaint are- within the scope of the matters the parties agreed to arbitrate, we resolve in favor of arbitration.
V. Defenses to Arbitration
The FAA was enacted in 1925 in response to widespread judicial hostility to arbitration agreements. See Hall Street Assocs., L.L.C. v. Mattel, Inc.,
The final phrase of section 2, however, permits arbitration agreements to be declared unenforceable “upon such grounds as exist at law or in equity for the revocation of any contract.” This permits agreements to arbitrate to be invalidаted by “generally applicable contract defenses, such as fraud, duress, or unconscionability,” but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue. Doctor’s Assocs., Inc. v. Casarotto,
Having determined SSW Holding’s claims fall within the scope of the arbitration provisions, we must determine whether SSW Holding’s defenses of procedural and substantive unconscionability and fraud invalidate, or render unenforceable, the arbitration provisions. Before the circuit court, SSW Holding challenged the 2001 and 2008 Cоnsulting Agreements based upon procedural and substantive un-conscionability and challenged the 2001 Consulting Agreement based upon fraud. We are obliged to analyze the unconsciona-bility claims under both New York and Michigan state law, but only New York state law for the fraud claim. Mastrobuono v. Shearson Lehman Hutton, Inc.,
114A. Unconscionability
Under New York law, a contract provision is unconscionable when it is grossly unreasonable or unconscionable in light of the mores and business practices of the time and place, making it unenforceable according to its literal terms. Gillman v. Chase Manhattan Bank, N.A.,
1. Procedural Unconscionability
Under both New York and Michigan laws, the procedural unconscion-ability requires an examination of the contract-formation process and the alleged lack of meaningful choice by one party coupled with unreasonably favorable terms to the other party. Gillman, supra; Liparoto Constr., supra. SSW Holding argues that the arbitration clauses violate public policy because they were part of a conspiracy to commit civil and criminal fraud. Additionally, SSW Holding contends that it “had absolutely no input as to the language of the arbitration provisions,” that BDO designed in a fraudulent manner to conceal its wrongful conduct, and that BDO never discussed the provisions with it. Further, SSW Holding asserts that BDO presented the DDS as a package deal and that SSW Holding had to enter into the Consulting Agreements to be able to get the promised “significant investment and tax benefits.”
SSW Holding’s allegation that BDO made numerous false representations inducing 11sthem to enter into the arbitration provision, are not persuasive. Although the complaint contains an isolated reference to the arbitration provisions being procured through fraud, the overwhelming majority of the factual allegations in the ninety-seven page complaint focus on the overall grand scheme in the formation of the Consulting Agreements. This type of allegation falls short of what is required to prove procedural unconscionability regarding the arbitration clause. Such a claim is proper for an arbitrator to decide. See Prima Paint Corp. v. Flood & Conklin Mfg. Co.,
Because the circuit court found that the arbitration provisions in the 2001 and 2003 Consulting Agreements were unenforceable and invalid due to procedural uncon-scionability, wе reverse.
2. Substantive Unconscionability
Under both New York and Michigan laws, a contract’s terms are substantively unconscionable when they are unreasonably favorable to the party against whom 11fiunconscionability is claimed. See Desiderio v. Nat’l Ass’n of Sec. Dealers, Inc.,
SSW Holding asserts that substantive unconscionability exists in this case due to the impact on it of two provisions in the Consulting Agreements. Those рrovisions are that no pre-hearing discovery shall be permitted unless specifically authorized by the arbitration panel, and any award shall not include punitive damages.
SSW Holding argues that it is unduly burdened by not being permitted discovery because the information needed to prove its claims is within the control of BDO, whereas BDO does not need any discovery from SSW Holding. However, the provisions do not exclude the right to discovery, they simply require either party to get permission from the arbitration panel. Also, limitations on discovery in the arbitration process do not invalidate a contract. Gilmer v. Interstate/Johnson Lane Corp.,
Because the circuit court found that the arbitration provisions in the 2001 and 2003 117Consulting Agreements were unenforceable and invalid due to substantive uncon-scionability, we reverse.
B. Fraud
Alleging fraud, SSW Holding asserts that BDO and others made numerous knowingly false affirmative representations and intentional omissions of material facts in order to get substantial fees. While SSW Holding lists sixty instances of actiоns and inactions constituting fraud, the allegations of fraud are directed at the 2001 Consulting Agreement as a whole, as opposed to the arbitration clause. SSW Holding concludes that it never would have hired BDO but for these intentional, material misrepresentations. Before the circuit court, SSW Holding sought invalidation based upon fraud of the arbitration provision in the 2001 Consulting Agreement.
If a claim of fraudulent inducement relates to the contract generally, and the contract contains an arbitration clause, the language of the FAA provides that the dispute must be adjudicated by the arbitrator. Prima Paint, supra. In Buckeye Check Cashing, Inc. v. Cardegna, the Court found: “First, as a matter of substantive federal arbitration law, an arbitration provision is severable from the remainder of the contract. Second, unless the challenge is to the arbitration clause itself, the issue of the contract’s validity is considered by the arbitrator in the first instance. Third, this arbitration law applies in state as well as federal courts.”
Reversed and remanded.
Notes
. The additional parties named were Paul Shanbrom; Gramercy Advisors, LLC; Gram-ercy Capital Recovery Fund II, LLC; Gramer-cy Capital Recovery Fund A, LLC; Jay Johnston; Sidley Austin Brown & Wood, LLP a/k/a Brown & Wood, LLP; Raymond J. Ruble; and De Castro, West, Chodorow, Glick-field & Nass, Inc.
. BDO’s first motion to compel arbitration and stay the action was filed in federal court.
. The parties’ argument regarding the 2001 Consulting Agreement is limited to whether New York law or the FAA applies to the arbitration provision. No argument is made that Arkansas law governs the arbitrability of disputes allegedly arising out of the 2001 Consulting Agreement.