PowerShare, Inc. v. Syntel, Inc.

Two corporations, one based in Massachusetts, and the other in Michigan, entered into a business arrangement (the Agreement). After a falling-out, one of the contracting parties, PowerShare, Inc., commenced a civil action in the district court to enforce the Agreement. The defendant, Syntel, Inc., countered by instituting a parallel arbitration proceeding and moving to stay litigation pending arbitration. The district court denied the motion, and Syntel now appeals. We have jurisdiction pursuant to the Federal Arbitration Act to review the interlocutory order denying Syntel’s motion to stay litigation pending arbitration. See 9 U.S.C. § 16(a)(1)(A); Combined Energies v. CCI, Inc., 514 F.3d 168, 170 (1st Cir. 2008).

The question that lies at the heart of the appeal is whether the Agreement contains a mandatory arbitration provision. The district court thought not. We hold that the Agreement does so provide and therefore reverse. Along the way, we address, as a matter of first impression at the federal appellate level, an issue concerning the standard of review to be applied by a district judge when reviewing a magistrate judge’s disposition of a motion to stay litigation pending the completion of a parallel arbitration proceeding.