Petrolex II LLC v. Lyman Lofts Developers LLC The Bailey Group LLC

Syllabus

The plaintiff, Petrolex II LLC, appealed from a decision granting motions to stay the Superior Court proceedings in four cases and refer them to arbitration. On appeal, the plaintiff asserted that the trial justice erred because there was no dispute between the defendants and the subcontractors regarding the construction and language as set forth in the subcontracts. The plaintiff further argued that a dispute over the pay if paid provision contained in the respective contracts was not referrable to arbitration as this clause, plaintiff contended, is void and unenforceable as being against public policy. <br><br>The Supreme Court concluded that the trial justice did not err in granting the motions to stay and refer the cases to arbitration. The Court held that the language of the subcontracts explicitly required that any dispute, including legal disputes, must be referred for arbitration. The Supreme Court also concluded that even if the pay if paid provision was to be declared void, the arbitration section of the subcontract would not be nullified because a challenge to the enforceability of the entirety of a contract does not void an arbitration clause. Accordingly, the Court determined that any dispute of the enforceability of the pay-if-paid provision should be decided by an arbitrator.<br><br>Accordingly, the Supreme Court affirmed the orders of the Superior Court.