In Al Rushaid v. Nat’l Oilwell Varco, Inc., plaintiffs sued eight entities for breach of contract. The District Court found that the disputed contracts could result in damages in the hundreds of millions of dollars. Discovery would have to take place on several continents. Accordingly, although plaintiffs served all defendants except National Oilwell Varco Norway (NOV Norway) in August 2011, the District Court set a trial date in June 2013.

In August 2012, plaintiffs served NOV Norway, which invoked an arbitration clause in September 2012. The District Court denied NOV Norway’s motion to compel arbitration, finding that the dispute was not within the scope of the arbitration clause and that NOV Norway had waived its right to arbitrate.

The Fifth Circuit rejected both the District Court’s conclusion that there was no agreement to arbitrate and its conclusion that NOV Norway had waived its right to arbitrate. On the first issue, the District Court’s ruling was based on its finding that plaintiffs’ claims against NOV Norway related to an NOV Norway price quotation that did not include an arbitration clause. The Fifth Circuit concluded that the price quotation was merely a supplement to terms provided in a general agreement called the ORGALIME. The Fifth Circuit concluded that the relationship between the two documents was sufficiently established so that the ORGALIME’s arbitration clause should apply to disputes relating to the price quotation.

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