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DESPITE ALREADY PENDING LITIGATION BETWEEN UNITED STATES AND AUSTRALIAN RELIGIOUS ORGANIZATIONS IN AUSTRALIAN COURT, SIXTH CIRCUIT FINDS THAT INTERNATIONAL COMITY DOES NOT STAND IN WAY OF U.S. FEDERAL SUIT TO COMPEL ARBITRATION UNDER ARBITRATION CONVENTION TO WHICH BOTH U.S. AND AUSTRALIA ARE PARTIES
"Answers in Genesis" of Kentucky (Plaintiff) is a Kentucky non-profit corporation. "Creation Ministries International" (Defendant) (which previously was the "Foundation") is an Australian non-profit organization. Its goal was to promote creationism and apologetics throughout Australia. In 1987, one of Defendant's leaders, Ken Ham, moved to the U.S. and set up what would become Plaintiff. The two organizations worked together for years in the area of teaching creationism. Plaintiff grew faster than Defendant, however, which led to tensions between Ham and Carl Wieland, the leader of Defendant.
One of the disputes centered on the control over "Foundation," Defendant's predecessor. In October 2005, the boards of directors of both Plaintiff and the Foundation met in Kentucky to resolve their disputes over the Foundation, as well as the content of the Foundation's publication "Creation Magazine" and the parties' joint website.
The result of the meeting was a Memorandum of Agreement (MOA), which transferred inter se certain copyrights and licenses. The MOA included an arbitration clause, requiring the parties to submit their disputes to "Christian arbitration." Wieland objected to the MOA and tensions increased.
In May 2007, the U.S. Defendant filed a lawsuit against the present Plaintiff in a Queensland, Australia trial court. The following March, Plaintiff sued in a Kentucky federal court to compel arbitration under the Federal Arbitration Act (FAA), 9 U.S.C. [section] 206. Plaintiff also asked the court to enjoin Defendant from continuing the Australian lawsuit.
After hearing the parties, the district court ordered them to arbitrate the dispute. Defendant appeals, claiming that the court should either have dismissed Plaintiffs lawsuit based on the contract's forum selection clause, or should have abstained since Defendant had filed its Australian lawsuit first.
On Defendant's appeal, the U.S. Court of Appeals for the Sixth Circuit affirms. It rules (1) that the district court had properly ordered the parties to arbitrate, and (2) did not abuse its discretion in declining to issue an anti-suit injunction.
Source: HighBeam Research, Arbitration.(Answers in Genesis and Creation Ministries International)