Subcontract’s Arbitration Clause Applies to Performance Bond Dispute, 11th Cir. Rules

TAMPA, Fla. — Indemnitors to a performance bond must arbitrate the issue of whether they are liable under the bond in the wake of a subcontractor’s default because the subcontract’s arbitration clause encompasses the dispute, a federal appeals court has ruled.

On Aug. 29, the 11th Circuit U.S. Court of Appeals held that the indemnification agreement, bond, and subcontract should be viewed as a single transaction because they relate to the same subject matter; therefore the arbitration clause encompasses disputes arising from all three agreements.

In 2010, the University of Alabama hired Brice Co. as the general contractor for development …