by Andrew Flake
After a recent family screening of Odysseus — which, whatever one’s view on Christopher Nolan’s fidelity to the plot of the epic, was indeed impressive in its sweep, sets, and cinematography — I was inspired to re-read the classic. And some research reminded me of a real-world epic in its own right: the almost serendipitous discovery by a German businessman turned archaeologist of the site of the actual ancient city of Troy. Armed with some historical theories and maps, Heinrich Schliemann scouted out two sites, one of which had a broad and low hill, in front of a broad plain, running out to the sea. After years of excavation, that hill revealed, layer-by-layer, settlements built up over time above the layer that was ancient Troy.
Case law can sometimes benefit from a “dig.” On the one hand, the Georgia Court of Appeals decision in Georgia Kenworth, LLC v. Smith is an unassuming hill: It reverses a trial court for disregarding the breadth of an arbitration clause in a vehicle-repair agreement. On the fact, not a surprising result. Kenworth repaired trucks, Smith signed a repair order containing an arbitration clause that the parties would arbitrate “any controversy or claim arising out of or relating to” the Order, and someone stole Smith’s truck from the repair lot.
The Court of Appeals held that Smith’s negligence claim for the loss of his truck, which “arose out of” the Order, was arbitrable. The trial court, viewing the dispute as one involving an implied bailment that was outside the arbitration clause’s scope, had denied a motion to compel, so Judge Davis reminded the parties that to “arise out of” a contract requires only a “slight causal connection,” which was present because Smith’s truck was at Kenworth’s for repairs under that contract.
Judge Davis makes a point in the opinion — perhaps because the court was reversing the trial court concerning the arbitration clause for the second time — of emphasizing the favored construction Georgia courts accord to arbitration clauses. One of the cases Kenworth cites, Emory Healthcare, Inc. v. Farrell, a 2021 opinion by Judge Dillard, for example, refers to Georgia’s “robust policy of favoring the resolution of legal disputes through arbitration” and a “strong” presumption in favor of arbitration, have made a policy preference clear.
What I find interesting is the origin of that policy — federal case law under the Federal Arbitration Act (FAA) — and how it evolved into an interpretive principle under Georgia law. To understand that requires some excavation.
The Court of Appeals opinion in Farrell, for example, was an FAA case. As was the 2018 Georgia Supreme Court opinion, SunTrust Bank v. Lilliston, that Judge Davis quotes: “[Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” And the quoted language was, again, from the United States Supreme Court (the often-cited Moses H. Cone decision.)
So was another case Kenworth cites, Waffle House, Inc. v. Pavesi, for the principles that “an order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” The quoted language in Pavesi finds its origin in a 1960 United States Supreme Court decision under the FAA, United Steelworkers of America v. Warrior and Gulf Navigation Company, via subsequent citations by the Supreme Court, then by the Northern District of Georgia, and then by Georgia’s appellate courts, where it appears as a Georgia law “presumption” in favor of arbitration — as indeed, by stare decisis, it now is. In Pavesi, the parties’ arbitration clause had specified that the FAA applied.
This grafting of federal and FAA principles onto Georgia arbitration occurred, I believe, in part because it is so common for both sets of law to apply: The parties’ will specify or an interstate-commerce nexus requires that the FAA applies, at the same time as substantive choice-of-law provision selects Georgia law, leading courts to blend them in discussing contract construction.
Equally interesting is a recent tack by the Supreme Court, that I have written about before in this blog, away from that “pro-arbitration” gloss on the FAA. In 2022’s Morgan v. Sundance, Inc., the Court wrote that the “[t]he federal policy is about treating arbitration contracts like all others, not about fostering arbitration.”
In view of this evolution, perhaps the most arbitration-friendly drafting variant in an arbitration clause with a Georgia nexus remains to specify the applicability of the Federal Arbitration Act as well as, via a substantive choice-of-law clause, Georgia law. ABF
[Cases cited include Morgan v. Sundance, Inc., 596 U.S. 411, 142 S.Ct. 1708 (2022); United Steelworkers of America v. Warrior and Gulf Navigation Company, 363 U.S. 574, 80 S.Ct. 1347 (1960); SunTrust Bank v. Lilliston, 302 Ga. 840, 842, 809 SE2d 819 (2018); Georgia Kenworth, LLC v. Smith, ___ S.E.2d ___, Docket No. A26A0645 (Ga. Ct. App., decided July 29, 2026); Emory Healthcare, Inc. v. Farrell, 859 S.E.2d 576, 359 Ga.App. 621 (Ga. App. 2021); and Waffle House, Inc. v. Pavesi, 343 Ga. App. 102, 109(3) (806 SE2d 204) (2017).]