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Appeal tests whether Telos can be forced into arbitration tied to related sale documents
Summary
At oral argument, counsel disputed whether Telos (TELUS/Telos), an entity tied to Mr. Knudson, can be compelled to arbitrate claims in a forum it did not sign for; respondents argued contract interrelation and ownership link Telos to the transaction, while the bench asked about parties' manifest intent and conflicting arbitration clauses.
The second issue presented at oral argument in Other Court was whether Telos (referred to in the record as TELUS/Telos), an entity tied to the appellant, can be compelled to arbitrate claims in a forum and against parties to which it did not expressly agree.
"The second issue is whether appellant telos can be compelled to arbitrate claims in the forum and against parties to which you never agreed," Andrew Escobar said at the outset. He asked the court to conclude the answer is no.
Respondent counsel Matt Heneman acknowledged ongoing AAA arbitration and told the court it would be possible to move or consolidate proceedings: "There's nothing that prevents the AAA arbitration that's going on now maybe could be held in King County," Heneman said, adding that parties negotiated the agreements and that Mr. Knudson is "the 100% owner of TELUS," integrating the entity into the transaction package.
The bench pressed whether the court should look to the objective manifest intent of parties and how to resolve multiple, interrelated arbitration provisions. The panel observed that the record contains different arbitration clauses in different documents (some calling for King County under Washington law; others referencing Chicago) and asked whether courts should bifurcate arbitrations or leave questions of venue, applicable law, and scope to arbitrators.
Heneman proposed two paths: separate the intertwined agreements into distinct arbitrations in different venues or combine them and let arbitrators determine applicable law and forum. The judges noted the record shows an AAA proceeding but said how that proceeding affects the present appeal was not before them.
The court recessed deliberation by submission after argument. The question for the court is whether contractual integration and ownership connections permit a non‑signatory (Telos) to be bound to arbitration clauses in related documents or whether the manifest intent and separate arbitration provisions preclude such a result.
