Sauer-Getriebe KG v. White Hydraulics, Inc.
United States Court of Appeals for the Seventh Circuit
715 F.2d 348 (1983)
- Written by Whitney Waldenberg, JD
Facts
On June 29, 1979, White Hydraulics, Inc. (White) (defendant), an Indiana corporation, contracted to give Sauer-Getriebe KG (Sauer) (plaintiff), a German partnership, the exclusive right to sell motors manufactured by White in Germany. White also agreed to convey to Sauer, upon the occurrence of certain events, the rights to manufacture the motors. The agreement between the parties contained an arbitration clause stating that the parties would submit all disputes to arbitration. White subsequently entered into a third-party contract to sell its manufacturing rights. Sauer commenced arbitration proceedings alleging repudiation of the contract and also filed an action in federal district court to enjoin White from transferring the manufacturing rights to the third party until the resolution of the arbitration. The district court denied injunctive relief, and Sauer appealed. On appeal, White claimed that Sauer had waived its right to arbitrate by filing suit in federal district court. White further argued that the contract containing the arbitration clause was invalid, rendering the arbitration invalid as well, and that the court had to decide the contractual issue before the matter could be sent to arbitration.
Rule of Law
Issue
Holding and Reasoning (Cummings, C.J.)
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