Originally from Dispute Resolution Journal

INTERNATIONAL- BANKRUPTCY MOTION TO COMPEL-RES JUDICATA

The district court properly ordered a debtor to proceed to arbitration because the doctrine of res judicata barred the debtor from raising a late claim of an alleged financial inability to participate in a foreign arbitration proceeding as a ground for opposing the creditor's motion to compel arbitration.

Mitsubishi , a Japanese co rporation, entered into a distributorship agreement wi th Sol er, a Puerto Rico car dealer. The agreement provided for th e arbitration of disputes before the Japan Commercial Arbitration Association (JCAA). A dispute arose and Mitsubishi brought several causes of action against Soler. Mitsubishi successfully obtained a court order compelling arbitration of the claims. An appellate court reversed in part, holding that antitrust disputes were not arbitrable. The U.S. Supreme Court ultimately held that antitrust disputes in an international context were indeed arbitrable, and it affirmed the order compelling arbitration.

Sometime prior to the Court's decision , Soler filed a reorganization petition under Chapter 11 of the Bankruptcy Code, which triggered an automatic stay of the arbitration then in progress.