## Facts

- Tolaram Fibers, Inc. (Tolaram) entered a contract concerning certain equipment with Deutsche Engineering der Voest-Alpine Industrieanlagenbau GMBH (Deutsche Engineering) and Barmag AG (Barmag).
- The contract provided that disputes would be settled in accordance with the International Chamber of Commerce (ICC) Rules.
- A dispute arose under the equipment contract, and Tolaram filed suit in North Carolina state court.
- Deutsche Engineering removed the case to the United States District Court for the Middle District of North Carolina.
- Barmag moved to compel arbitration under the Federal Arbitration Act (FAA) and to stay the federal case pending arbitration.
- Tolaram opposed the motion, arguing in part that Barmag could not pursue claims based on allegations originally made by Deutsche Engineering.
- Tolaram also argued that, if arbitration were required, it should occur in Randolph County, North Carolina, because the equipment was located in Asheboro, North Carolina.
- Barmag opposed a court order fixing Randolph County as the arbitration location, arguing that the ICC Rules assign forum selection to the ICC process and that a judicially imposed location would alter the parties’ bargain.

## Issues

1. Whether the FAA required the district court to compel arbitration of the parties’ equipment-contract dispute where the contract called for dispute resolution under the ICC Rules.
2. Whether the court could order arbitration to take place in Randolph County, North Carolina, or instead had to leave the place of arbitration to be determined under the ICC Rules.
3. Whether Tolaram’s objection to Barmag presenting claims tied to allegations first raised by Deutsche Engineering was a basis to deny a motion to compel arbitration.

## Decision

- The court granted Barmag’s motion to compel arbitration under the FAA.
- The court stayed the federal litigation pending completion of arbitration.
- The court declined to order that arbitration be held in Randolph County, North Carolina, leaving the place of arbitration to the ICC process contemplated by the parties’ contract.

## Legal Principles

- A written arbitration clause covering the dispute must be enforced under the FAA, and a court generally compels arbitration when the dispute falls within the clause’s scope.
- When parties agree to arbitrate “in accordance with” the ICC Rules, the court enforces that procedural framework rather than substituting court-selected procedures.
- If the contract does not clearly fix a location for arbitration and the incorporated institutional rules provide a method for selecting the place, the court generally leaves that question to the institution/tribunal under those rules.
- Objections framed as limits on what a party may argue or how claims relate to another signatory’s allegations typically do not defeat enforcement of an otherwise valid arbitration agreement; such matters are commonly addressed in arbitration once arbitration is compelled.
- Staying the court case pending arbitration is an appropriate remedy to prevent parallel litigation from proceeding while the parties arbitrate the dispute they agreed to arbitrate.

## Conclusion

In Tolaram Fibers, Inc. v. Deutsche Engineering der Voest-Alpine Industrieanlagenbau GMBH, the Middle District of North Carolina enforced the parties’ ICC-based arbitration clause by compelling arbitration under the FAA and staying the court action, while refusing to impose a North Carolina arbitration location in light of the ICC Rules’ mechanism for determining the place of arbitration.


Tolaram Fibers, Inc. v. Deutsche Engineering der Voest-Alpine Industrieanlagenbau GMBH, 1991 U.S. Dist. LEXIS 3565 (1991)