Calif. Federal Judge Compels Arbitration of Contract Dispute, Says Arbitration Clause is Mandatory

SAN FRANCISCO — A California federal judge has compelled arbitration of an investment contract dispute, ruling that the arbitration clause is not optional, despite its statement that any party “may demand” arbitration of “any dispute” between the parties.

In a Nov. 19 order, Magistrate Judge Laurel Beeler of the U.S. District Court for the Northern District of California explained that when the phrase “may demand” is read in context with the rest of the clause, arbitration is mandatory once a party submits a demand.

Mentor Capital Inc. and Bhang Corp. entered into an investment contract under which Mentor was to …