From In re Ayad, decided Friday by the Texas Supreme Court:
Relator Salma Mariam Ayad married real party in interest Ayad Hashim Latif in 2008. In connection with their marriage, they signed … [an] “Islamic Pre-Nuptial Agreement” …. In the Agreement, the parties recite their “belief that Islam … is binding on [them] in all spheres of life.” As relevant here, the Agreement provides that “[a]ny conflict which may arise between the husband and the wife will be resolved according to the Qur’an, Sunnah, and Islamic Law in a Muslim court, or in [its] absence by a Fiqh Panel.” The Agreement then explains how the members of the three-person panel will be selected and provides that the panel “will not represent the parties in conflict, but rather, serve as impartial arbitrators and judges, guided by Islamic Law and [its] principles.” According to the Agreement, “the majority decision of the Fiqh Panel will be binding and final.”
Although Ayad’s signature appears on the Agreement, she alleges that she did not become aware of its contents—or even see it—until she and Latif began experiencing marital difficulties in 2020. This, Ayad asserts, is when she learned she had been “defrauded” into signing a premarital agreement that violates her fundamental rights. According to Ayad, she received the two documents in a stack with the Marriage Contract [which she acknowledges she did sign, and which isn’t at issue here -EV] on top, and she thought the Agreement was another copy of the Marriage Contract.
In January 2021, Ayad sued for divorce and sought to be appointed joint managing conservator of the couple’s six-year-old son. Latif filed his own counterpetition for divorce and moved to enforce the Agreement. Ayad raised multiple challenges to enforcement, including that: the term “Islamic Law” was too indefinite; the Agreement was void because it violated public policy; Latif’s previous breaches of the Agreement had excused Ayad from performing; and the Agreement was unconscionable.
The trial court ordered that the case go to arbitration, and said that, “if an eventual arbitration award was based on foreign law, it would review the award under Texas Rule of Civil Procedure 308b ‘to determine whether the award violates constitutional rights or public policy.’ The court also noted that ‘upon proper application of a party’ under Section 153.0071 of the Family Code, it would hold a hearing to determine whether the arbitration award was not in the best interest of the parties’ child.”
Not proper, said the Texas Supreme Court (emphasis added):
Because we agree with Ayad that the trial court was statutorily required [by the Texas Family Code] to hear and determine her challenges to the Agreement’s validity and enforceability before referring the parties’ disputes to arbitration, we conditionally grant her petition for writ of mandamus. We do not reach the merits of her challenges to the validity and enforceability of the Agreement, which the trial court should try in the first instance….
To be sure, “Under the ordinary rule [for arbitration provisions in Texas], challenges to the validity or enforceability of the contract containing the agreement to arbitrate are decided by the arbitrator.” But the “unique statutes” applicable to family arbitration “alter the ordinary rule.”
In the trial court, Ayad raised multiple challenges to the validity and enforceability of the Agreement. During the hearing on Latif’s motion to enforce, the trial court did receive testimony from Latif’s expert witness regarding Ayad’s contention that the Agreement’s reference to Islamic law was ambiguous and thus unenforceable. And during the hearing on Ayad’s motion to reconsider, the trial court gave each party twenty minutes to present arguments and evidence on the sole issue of voluntariness.
The trial court did not determine either issue in its order compelling arbitration, however, because it incorrectly concluded it was without discretion to do so. Nor is there any indication in the record that the court tried Ayad’s additional challenges that the Agreement itself was void as against public policy and unconscionable. Instead, the court indicated that it would determine following arbitration whether the terms of any award made under the Agreement violate public policy….
[But] when a party to a divorce or child-custody proceeding has challenged the validity or enforceability of an agreement containing an arbitration provision, the trial court cannot order binding arbitration without first “try[ing]” the issues of validity or enforceability and “determin[ing]” that the agreement is valid and enforceable. Tex. Fam. Code §§ 6.6015(a), 153.00715(a). Because the trial court did not comply with Sections 6.6015 and 153.00715, it clearly abused its discretion….
The post Trial Court Must Hear Challenge to “Islamic Pre-Nuptial Agreement” Before Referring Matter to Arbitration appeared first on Reason.com.
