On August 7, 2014, in Nebraska Machinery Co. v. Cargotec Solutions, LLC, the US Court of Appeals for the Eighth Circuit joined the US Court of Appeals for the Tenth Circuit in holding that the Federal Arbitration Act (FAA) mandates a summary trial when there is a dispute as to whether there is an agreement to arbitrate (13-2753, (8th Cir. Aug. 7, 2014)).

Cargotec, a manufacturer of heavy machinery, sent Nebraska Machinery Company (NMC) two purchase orders for engine equipment. Each order referred to a separate form containing arbitration and indemnification clauses. NMC responded to each purchase order with its own purchase orders containing additional terms and conditions, which did not include an arbitration or indemnification provision. The parties claimed they did not receive the other party’s terms and conditions. NMC delivered the equipment and Cargotec remitted payment.

Cargotec and NMC were later sued as third parties because of unsatisfactory yard trucks that Cargotec fitted with NMC engines. Cargotec sent an indemnification demand to NMC, which NMC rejected. Cargotec filed a demand for arbitration in Kansas against NMC, and NMC filed an action in the US District Court for the District of Nebraska seeking a declaration that Cargotec's demand for arbitration and indemnification was improper. NMC moved to determine arbitrability and Cargotec moved to compel arbitration. The district court refused to submit the issue of whether there was an agreement to arbitrate to a jury, ruling that there were no facts left to try. Instead, the court granted NMC's motion to determine arbitrability and denied Cargotec's motion to compel. Cargotec appealed.

The Eighth Circuit reversed. The Eight Circuit joined the Tenth Circuit in Howard v. Ferellgas Partners, L.P., which involved similar facts as to contract formation, and ruled that when there is a material issue of fact as to whether there was an agreement to arbitrate, the FAA requires the court to resolve the question by proceeding to a bench trial if (as in this case) a jury trial is not available (748 F.3d 975 (10th Cir. 2014)). The Eighth Circuit found that the district court never resolved the factual issues concerning contract formation, but instead only noted that the factual issues were present. Because there were factual issues left to try, namely, determining what documents were sent and received and which side was credible, the court remanded the case to the district court to hold a bench trial, make findings of fact, and apply the appropriate UCC "battle of the forms" provisions in light of those facts.