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NO.

_____________

In the Fifth Court of Appeals
Dallas, Texas


I N RE TAILWIND SPORTS CORP. AND LANCE ARMSTRONG
Relators

ORIGINAL PROCEEDING FROM CAUSE NO. DC-13-01564
116TH JUDICIAL DISTRICT COURT OF DALLAS COUNTY, TEXAS
HON. TONYA PARKER PRESIDING
RELATORS JOINT PETITION FOR WRIT OF MANDAMUS

HOWRY BREEN & HERMAN LLP
Timothy J. Herman
State Bar No. 09513700
therman@howrybreen.com
Sean E. Breen
State Bar No. 00783715
sbreen@howrybreen.com
1900 Pearl Street
Austin, Texas 78705
(512) 474-7300
(512) 474-8557 (fax)

GRUBER HURST JOHANSEN
HAIL SHANK LLP
Michael K. Hurst
State Bar No.10316310
mhurst@ghjhlaw.com
A. Shonn Brown
State Bar No. 24007164
sbrown@ghjhlaw.com
1445 Ross Ave., Suite 2500
Dallas, Texas 75202
(214) 855-6800
(214) 855-6808 (fax)

SMITH LAW GROUP, P.C.
D. Todd Smith
State Bar No. 00797451
todd@appealsplus.com
Brandy Wingate Voss
State Bar No. 24037046
brandy@appealsplus.com
1250 Capital of Texas Hwy. S.
Three Cielo Center, Suite 601
Austin, Texas 78746
(512) 439-3230
(512) 439-3232 (fax)


Counsel for Relators
Tailwind Sports Corp. and Lance Armstrong
ORAL ARGUMENT REQUESTED
i
IDENTITY OF PARTIES AND COUNSEL
Relators: Appellate Counsel for Relators:
Tailwind Sports Corp. (erroneously
sued as Tailwind Sports, Inc.) and
Lance Armstrong
Timothy J. Herman
Sean E. Breen
HOWRY BREEN & HERMAN, L.L.P.
1900 Pearl Street
Austin, Texas 78705

Michael K. Hurst
A. Shonn Brown
GRUBER HURST JOHANSEN HAIL SHANK LLP
1445 Ross Ave., Suite 2500
Dallas, Texas 75202

D. Todd Smith
Brandy Wingate Voss
SMITH LAW GROUP, P.C.
1250 Capital of Texas Highway South
Three Cielo Center, Suite 601
Austin, Texas 78746
Trial Counsel for Relators:
Timothy J. Herman
Sean E. Breen
HOWRY BREEN & HERMAN, L.L.P.
1900 Pearl Street
Austin, Texas 78705

Additional Trial Counsel for Relator
Lance Armstrong:

Michael K. Hurst
A. Shonn Brown
GRUBER HURST JOHANSEN HAIL & SHANK, LLP
1445 Ross Ave., Suite 2500
Dallas, Texas 75202

Cru Energy
Counter-Plaintiff/Intervention Defendant
Mark Cohen
Rose R. Cohen
LAW OFFICE OF MARK COHEN
805 W. 10th Street, Suite 100
Austin, Texas 78701

ii
Respondent:
Hon. Tonya Parker
116TH JUDICIAL DISTRICT COURT
George L. Allen, Sr. Courts Building
600 Commerce Street, Box 640
Dallas, Texas 75202

Real Party in Interest:

SCA Promotions, Inc.
Counsel for Real Party in Interest:

Jeffrey M. Tillotson
LYNN TILLOTSON PINKER & COX, L.L.P.
2100 Ross Avenue, Suite 2700
Dallas Texas 75201



iii
TABLE OF CONTENTS
Identity of Parties and Counsel ................................................................................. i
Index of Authorities ............................................................................................... vii
Statement of the Case ................................................................................................ 1
Statement of Jurisdiction ........................................................................................... 2
Issues Presented ........................................................................................................ 3
1. Tailwind dissolved more than three years before SCA filed
this lawsuit and sought to re-convene an arbitration that ended
in 2006 with a Compromise Settlement Agreement and agreed
Final Award. Under Delaware and Texas law, Tailwind can
neither sue nor be sued. Was the trial courts order denying
Tailwinds motion to stay the re-convened arbitration a clear
abuse of discretion for which Tailwind has no adequate
remedy by appeal?
2. Does the Compromise Settlement Agreement clearly and
unmistakably confer upon the arbitrators the primary power to
decide which, if any, disputes between the parties must be
submitted to arbitration?
3. Did the parties to the Compromise Settlement Agreement, by
agreeing that each of them hereby submits to the jurisdiction
of [the specific arbitration panel] and waives any objection to
such jurisdiction on the grounds of venue or forum non
conveniens, the absence of in personam or subject matter
jurisdiction and any similar grounds, further agree to have the
arbitrators decide any dispute between them, regardless of
whether it qualifies as a dispute or controversy . . . arising
under or in connection with the agreements at issue?
4. Did Relators waive their right to assert limitations on the
scope of the Compromise Settlement Agreements arbitration
clause by:
a. waiting until the arbitrators agreed to re-convene the
arbitration before filing their motions to stay with the
trial court, or
iv
b. asking the arbitrators, shortly after the previous
arbitration concluded, to enforce an ongoing
confidentiality obligation SCA owed under the panels
existing order and the Compromise Settlement
Agreement?
5. Does SCAs claim that the arbitrators should sanction Relators
for conduct allegedly occurring before February 8, 2006the
effective date of the Compromise Settlement Agreement
resulting in the Final Arbitration Awardfall within the scope
of any enforceable arbitration agreement? Do the arbitrators
have inherent jurisdiction to sanction conduct that occurred
prior to a final, confirmed arbitration award?
6. Does SCAs claimbased solely on an October 10, 2012
Reasoned Decision by the United States Anti-Doping
Agencythat the arbitrators should order Relators to return
all prize money fall within the scope of any enforceable
arbitration agreement?
7. Did the district court abuse its discretion by denying Relators
respective motions to stay the re-commenced arbitration
proceeding, and do Relators lack an adequate remedy at law?
Statement of Facts ..................................................................................................... 4
Why The Writ Should Be Granted..........................................................................15
Argument.................................................................................................................16
I. Mandamus Standards of Review ................................................................ 17
II. Law Governing Motions to Stay Arbitration ............................................. 18
III. The Trial Court Abused Its Discretion by Failing to Stay the
Arbitration Because, as a Dissolved Corporation, Tailwind Is No
Longer a Party to Any Arbitration Agreement with SCA .......................... 22
IV. The Trial Court Abused Its Discretion to the Extent It Deferred to
the Arbitrators on the Arbitrability Issue and Construed the
Compromise Settlement Agreement to Require Arbitration of All
Disputes ...................................................................................................... 26
v
A. Arbitrability Was a Question for the Court Because the
Compromise Settlement Agreement Does Not Clearly and
Unmistakably Provide Otherwise .................................................. 27
B. The Compromise Settlement Agreement Does Not Require
Arbitration of Any and All Disputes Between the Parties .............. 28
V. The Trial Court Abused Its Discretion to the Extent It Concluded
That Relators Waived Any Issues Regarding the Scope of the
Arbitration Clause by Conduct ................................................................... 29
A. Relators Preserved Their Objections to the Arbitrators
Ability to Decide SCAs Sanctions and Forfeiture Claims ............. 29
B. Relators 2006 Request for Sanctions Based on Breach of
Confidentiality Obligations in the Panels Order and the
Compromise Settlement Agreement Did Not Empower the
Arbitrators to Decide Sanctions Claims for All Time ..................... 30
VI. SCAs Requests for Arbitrator-Ordered Sanctions and Forfeiture
of Prize Money Exceed the Scope of Any Arbitration Clause That
Might Be Enforced Against Relators and Are Not Authorized by
Any Inherent Power ................................................................................ 34
A. The Compromise Settlement Agreement Limits the Scope
of Any Arbitrable Issues to Those Involving Performance
of Its Terms ..................................................................................... 35
B. SCAs Claims Are Independent of the Contracts
Containing the Arbitration Clauses and Therefore Are
Outside the Proper Scope of Arbitration ......................................... 38
C. Public Policy Favors Treating Settlement Agreements and
Arbitration Awards as Final ............................................................ 40
D. The Arbitrators Have No Inherent Power to Sanction
Relators Seven Years After the Award Became Final .................... 47
VII. Nothing in the Compromise Settlement Agreement Empowers the
Arbitrators to Rule on the Legal Effect, If Any, of USADAs
Reasoned Decision ..................................................................................... 54
VIII. Relators Lack an Adequate Remedy at Law .............................................. 55
Conclusion and Prayer ............................................................................................59
vi
Record Certification ................................................................................................60
Certificate of Compliance .......................................................................................61
Certificate of Service ..............................................................................................61
Appendix .............................................................................................................. post

vii
INDEX OF AUTHORITIES
CASES PAGE(S)
Aluminum Co. of Am. v. Beazer E., Inc.,
124 F.3d 551 (3d Cir. 1997) .......................................................................... 25

Anderman/Smith Operating Co. v. Tenn. Gas Pipeline Co.,
918 F.2d 1215 (5th Cir. 1990) ....................................................................... 48

AutoNation USA Corp. v. Leroy,
105 S.W.3d 190 (Tex. App.-Houston [14th Dist.] 2003,
orig. proceeding) ...................................................................................... 38, 39

Bayne v. Morris,
68 U.S. (1 Wall.) 97, 17 L. Ed. 495 (1863) ................................................... 47

BDO Seidman, LLP v. J.A. Green Dev. Corp.,
327 S.W.3d 852 (Tex. App.Dallas 2010, no pet.) ..................................... 21

Bison Bldg. Materials, Ltd. v. Aldridge,
No. 06-1084, 2012 WL 3870493 (Tex. Aug. 17, 2012) ................................ 46

Brown v. Witco Corp.,
340 F.3d 209 (5th Cir. 2003) ................................................................... 47, 48

Burlington Res. Oil & Gas Co. v. San Juan Basin Royalty Trust,
249 S.W.3d 34 (Tex. App.Houston [1st Dist.] 2007, pet. denied) ...... 19, 22

Cantella & Co., Inc. v. Goodwin,
924 S.W.2d 943 (Tex. 1996) (per curiam) .................................................... 18

Canzeri Co. v. AON Services Group, Inc.,
No. 05-99-01656-CV, 2000 WL 721713 (Tex. App.Dallas
June 6, 2000, no pet.) (not designated for publication) ................................. 21

City Investing Co. Liquidating Trust v. Contl Cas. Co.,
624 A.2d 1191 (Del. 1993) ................................................................ 10, 24, 25

CML V, LLC v. Bax,
6 A.3d 238 (Del. Ch. 2010), affd, 28 A.3d 1037 (Del. 2011) ...................... 24

viii
Continuum Health Servs., LLC v. Cross,
No. 05-11-01520-CV, 2012 WL 5845367 (Tex. App.Dallas
Nov. 19, 2012, no pet.) ............................................................................ 27, 28

Crossmark, Inc. v. Hazar,
124 S.W.3d 422 (Tex. App.Dallas 2004, pet. denied) .................. 41, 43, 44

Dennis v. Coll. Station Hosp., L.P.,
169 S.W.3d 282 (Tex. App.Waco 2005, pet. denied) ......................... 19, 39

Denver City Energy Assocs., L.P. v. Golden Spread Elec. Co-op., Inc.,
340 S.W.3d 538 (Tex. App.Amarillo 2011, no pet.) ............................... 47

Diamond Offshore Co. v. Hall,
No. 02-06-272-CV, 2007 WL 1441011 (Tex. App.Fort Worth
May 17, 2007, pet. denied) (mem. op.) ..................................................passim

Executone Information Systems, Inc. v. Davis,
26 F.3d 1314, 1323 (5th Cir. 1994) ............................................................... 32

First Options of Chicago, Inc. v. Kaplan,
514 U.S. 938, 115 S.Ct. 1920 (1995) ...................................................... 18, 27

Frederic G. Krapf & Son, Inc. v. Gorson,
243 A.2d 713 (Del. 1968) ........................................................................ 10, 24

Gables Cent. Const., Inc. v. Atrium Cos., Inc.,
No. 05-07-00438-CV, 2009 WL 824732 (Tex. App.Dallas
Mar. 31, 2009, pet. abated) ............................................................................ 19

Green v. Ameritech Corp.,
200 F.3d 967 (6th Cir. 2000) ......................................................................... 47

Hamstein Cumberland Music Grp. v. Williams,
532 F. Appx 538 (5th Cir. 2013) ............................................................ 31, 49

Hartwig Transit, Inc. v. Menolascino,
446 N.E.2d 1193 (Ill. Ct. App. 1st Dist. 1983) ............................................. 43

Holcim (Tex.) Ltd. Pship v. Humboldt Wedag, Inc.,
211 S.W.3d 796 (Tex. App.Waco 2006, no pet.) ................................ 30, 56
ix

Horton Automatics v. Indus. Div. of Communications Workers of Am.,
506 Fed. Appx. 253 (5th Cir. 2013) (not designated for publication) ........... 32

Howsam v. Dean Witter Reynolds, Inc.,
537 U.S. 79, 123 S.Ct. 588 (2002) .......................................................... 19, 27

Hunter v. Fort Worth Capital Corp.,
620 S.W.2d 547 (Tex. 1981) ................................................................... 22, 23

In re Columbia Med. Ctr. of Las Colinas, Subsidiary, L.P.,
290 S.W.3d 204 (Tex. 2009) ......................................................................... 17

In re Conseco Fin. Serv. Corp.,
19 S.W.3d 562 (Tex. App.Waco 2000, orig. proceeding) ......................... 39

In re D. Wilson Const. Co.,
196 S.W.3d 774 (Tex. 2006) ......................................................................... 21

In re Great W. Drilling, Ltd.,
211 S.W.3d 828 (Tex. App.Eastland 2006, orig. proceeding) ............ 35, 37

In re Gulf Explor., LLC,
289 S.W.3d 836 (Tex. 2009) ......................................................................... 36

In re L&L Kempwood Assocs., Inc.,
9 S.W.3d 125 (Tex. 1999) ............................................................................. 19

In re McAllen Med. Ctr.,
275 S.W.3d 458 (Tex. 2008) ................................................................... 17, 18

In re McAllen Med. Ctr.,
275 S.W.3d 458, 465 (Tex. 2008) (orig. proceeding) ................................... 18

In re Neutral Posture, Inc.,
135 S.W.3d 725 (Tex. App.Houston [1st Dist.] 2003, orig. proceeding) . 20

In re Prudential Ins. Co. of Am.,
148 S.W.3d 124, 136 (Tex 2004) (orig. proceeding) .................................... 17


x
In re Prudential Ins. Co. of America,
148 S.W.3d 124 (Tex. 2004) ......................................................................... 17
In re United Servs. Auto. Assn,
307 S.W.3d 299 (Tex. 2010) ......................................................................... 18
J.M. Davidson, Inc. v. Webster,
128 S.W.3d 223 (Tex. 2003) ....................................................... 20, 21, 29, 36
John Morrell & Co. v. Local Union 304A of United Food & Commercial
Workers, AFL-CIO,
913 F.2d 544 (8th Cir. 1990) ...................................................................32, 33
Kilroy v. Kilroy,
137 S.W.3d 780 (Tex. App.Houston [1st Dist.] 2004, no pet.) ................. 18
L&L Kempwood Assocs., L.P. v. Omega Builders, Inc.,
972 S.W.2d 819 (Tex. App.Corpus Christi 1998, orig. proceeding) .. 19, 20
Lehmann v. HarCon Corp.,
39 S.W.3d 191 (Tex. 2001) ........................................................................... 46
McReynolds v. Elston,
222 S.W.3d 731 (Tex. App.Houston [14th Dist.] 2007, no pet.) .............. 22
Pellow v. Cade,
990 S.W.2d 307 (Tex. App.Texarkana 1999, no pet.) ........................ 22, 25
Pennzoil Co. v. Arnold Oil Co.,
30 S.W.3d 494 (Tex. App.San Antonio 2000, orig. proceeding) .............. 39
Pennzoil Explor. & Prod. Co. v. Ramco Energy Ltd.,
139 F.3d 1061 (5th Cir. 1998) .................................................................. 35, 36
Perry v. Del Rio,
66 S.W.3d 239 (Tex. 2001) ........................................................................... 18
Pheng Invs., Inc. v. Rodriguez,
196 S.W.3d 322 (Tex. App.Fort Worth 2006, no pet.) (op. on rehg) ...... 44
xi
Phillips v. ACS Mun. Brokers, Inc.,
888 S.W.2d 872 (Tex. App.Dallas 1994, no writ) ............................... 18, 19
Positive Software Solutions, Inc. v. New Century Mortgage Corp.,
619 F.3d 458, 459-60 (5th Cir. 2010) .......................................... 49, 50, 51, 57
Roe v. Ladymon,
318 S.W.3d 502 (Tex. App.Dallas 2010, no pet.) ................... 18, 19, 27, 30
Saxa Inc. v. DFD Architecture Inc.,
312 S.W.3d 224 (Tex. App.Dallas 2010, pet. denied) ..........................19, 20
See Reveille Tool & Supply, Inc. v. State,
756 S.W.2d 102 (Tex. App.Austin 1988, no writ) ............... 23
Tittle v. Enron Corp.,
463 F.3d 410 (5th Cir. 2006) ......................................................................... 38
United States v. McDonald & Eide, Inc.,
670 F. Supp. 1226 (D. Del. 1987), affd, 865 F.2d 73 (3d Cir. 1989)..... 10, 24
Walker v. Packer,
827 S.W.2d 833 (Tex. 1992) (orig. proceeding) ..................................... 17, 18
Wright v. Sydow,
173 S.W.3d 534 (Tex. App.Houston [14th Dist.] 2004, pet. denied) ....... 40
Yazdchi v. Am. Arbitration Assn,
No. 01-04-00149-CV, 2005 WL 375288 (Tex. App.Houston
[1st Dist.] 2005, no pet) ................................................................................. 58
STATUTES PAGE(S)
DEL. CODE ANN. tit. 8 278 ......................................................................... 10, 24, 25
TEX. BUS. ORGS. CODE 11.351 ................................................................ 10, 23, 24
TEX. BUS. ORGS. CODE 11.356 ...................................................................... 23, 24
TEX. BUS. ORGS. CODE 11.359 ................................................................ 10, 23, 24
xii
TEX. CIV. PRAC. & REM. CODE 154.002 ................................................................ 40

TEX. CIV. PRAC. & REM. CODE 171.021 ................................................................ 19

TEX. CIV. PRAC. & REM. CODE 171.054 ............................................................ 8, 48

Tex. Civ. Prac. & Rem. Code 171.088 ................................................. 8, 48, 51, 56

Tex. Civ. Prac. & Rem. Code 171.091. .................................................................. 8

TEX. CIV. PRAC. & REM. CODE 171.092 ................................................................ 45

TEX. CIV. PRAC. & REM. CODE 171.093 ................................................................ 44

TEX. CIV. PRAC. & REM. CODE 171.098 .......................................................... 55, 56

TEX. CONST. art. V, 6 .............................................................................................. 2

TEX. GOVT CODE 22.221(b)(1) .............................................................................. 2
OTHER AUTHORITIES PAGE(S)
American Arbitration Association, Commercial Arbitration Rule 36 (2009) ......... 50

American Arbitration Association, Commercial Arbitration Rule 38 (2009) ......... 50

American Arbitration Association, Commercial Arbitration Rule 46 (2009) ......... 50

American Arbitration Association, International Arbitration Article 24 (2010) ..... 50

American Arbitration Association, International Arbitration Article 30 ................ 50

BLACKS LAW DICTIONARY 318 (8th ed. 2004) ....................................................... 43

BLACKS LAW DICTIONARY 673 (6th ed. 1990) ....................................................... 47

BLACK'S LAW DICTIONARY, 270 (5th ed. 1979) ....................................................... 43

JAMS, Comprehensive Arbitration Rules & Procedures Rule 22(i) (2010) ........... 50

xiii
JAMS, Comprehensive Arbitration Rules & Procedures Rule 24(j) ....................... 50
JAMS, Comprehensive Arbitration Rules & Procedures Rule 24(k) ...................... 50
RULES PAGE(S)
TEX. R. APP. P. 52.7(a)(1) .......................................................................................... 1
TEX. R. CIV. P. 21 ..................................................................................................... 44
TEX. R. CIV. P. 91a ................................................................................................... 12
TEX. R. EVID. 20 ....................................................................................................... 55
1
TO THE HONORABLE FIFTH COURT OF APPEALS:
Relators Tailwind Sports Corp. (erroneously sued as Tailwind Sports, Inc.)
and Lance Armstrong (together, Relators) file this petition for writ of mandamus
requesting relief from the trial courts order denying their motions to stay
arbitration. Relators respectfully show:
STATEMENT OF THE CASE
Underlying Proceeding: The motions at issue were filed in the
116th Judicial District Court of Dallas
County, Texas in Cause No. DC13-01564,
which is styled SCA Promotions, Inc. v.
Lance Armstrong, Tailwind Sports, Inc.,
and William Stapleton. See MR 1, 354,
479, 595, 732.
1

Nature of the Case and Ruling at
Issue:
SCA brought this lawsuit to collaterally
attack a Final Arbitration Award rendered
in February 2006 in a dispute between the
same parties. MR 1, 680 (Apx. B). The
final award resulted from a Compromise
Settlement Agreement that superseded all
prior agreements. MR 672 (Apx. A).
After Relators answered and filed
dispositive motions, SCA attempted to re-
convene the previous arbitration. MR 36,
315, 317, 348, 352. By a 2-1 vote, the
arbitrators agreed to decide whether to
issue another award. MR 685 (Apx. C),
693 (Apx. D). A final arbitration hearing is
set for March 17, 2014. MR 1418.

1
Relators are filing a separate sworn record, which is cited by page number in this petition (e.g.,
MR ___). See TEX. R. APP. P. 52.7(a)(1). The appendix is attached to this petition and is referenced
by tab (e.g., Apx. ___) when appropriate.
2
Tailwind and Armstrong separately moved
to stay the re-convened arbitration as
authorized by the Texas General
Arbitration Act. MR 354, 479, 595, 732.
2

By an order signed on February 25, 2014,
the trial court denied both motions. MR
1412 (Apx. C). The order thus permits the
March 17 arbitration and related discovery
to go forward. See MR 1418-21.

Relief Sought: Relators seek a writ of mandamus directing
the trial court to vacate its February 25,
2014 order and issue an order staying the
re-convened arbitration proceeding.
By separate motion, Relators also ask the
Court to issue a temporary order staying
any further action in the arbitration,
including any discovery, while this matter
remains pending before the Court.
3

STATEMENT OF JURISDICTION
This Court has jurisdiction over this original proceeding under Article V,
Section 6 of the Texas Constitution and Section 22.221 of the Texas Government
Code. See TEX. CONST. art. V, 6; TEX. GOVT CODE 22.221(b)(1).

2
Relators amended their motions to add an argument that the arbitrators partial final award on
jurisdiction should be vacated under Texas Civil Practice and Remedies Code section 171.088.
Relators are not asserting that argument as a ground for mandamus relief. Many of the exhibits in
Relators separate motions were the same and therefore appear multiple times in the mandamus
record. For brevity, this petition will minimize duplicative citations to the same document.
3
Out of an abundance of caution, Relators are also filing a concurrent interlocutory appeal and
request for temporary relief, in the event the Court determines that an interlocutory appeal is
available.
3
ISSUES PRESENTED
1. Tailwind dissolved more than three years before SCA filed this
lawsuit and sought to re-convene an arbitration that ended in 2006 with a
Compromise Settlement Agreement and agreed Final Award. Under Delaware and
Texas law, Tailwind can neither sue nor be sued. Was the trial courts order
denying Tailwinds motion to stay the re-convened arbitration a clear abuse of
discretion for which Tailwind has no adequate remedy by appeal?
2. Does the Compromise Settlement Agreement clearly and
unmistakably confer upon the arbitrators the primary power to decide which, if
any, disputes between the parties must be submitted to arbitration?
3. Did the parties to the Compromise Settlement Agreement, by agreeing
that each of them hereby submits to the jurisdiction of [the specific arbitration
panel] and waives any objection to such jurisdiction on the grounds of venue or
forum non conveniens, the absence of in personam or subject matter jurisdiction
and any similar grounds, further agree to have the arbitrators decide any dispute
between them, regardless of whether it qualifies as a dispute or controversy . . .
arising under or in connection with the agreements at issue?
4. Did Relators waive their right to assert limitations on the scope of the
Compromise Settlement Agreements arbitration clause by:
a. waiting until the arbitrators agreed to re-convene the arbitration
before filing their motions to stay with the trial court, or
4
b. asking the arbitrators, shortly after the previous arbitration
concluded, to enforce an ongoing confidentiality obligation
SCA owed under the panels existing order and the
Compromise Settlement Agreement?
5. Does SCAs claim that the arbitrators should sanction Relators for
conduct allegedly occurring before February 8, 2006the effective date of the
Compromise Settlement Agreement resulting in the Final Arbitration Awardfall
within the scope of any enforceable arbitration agreement? Do the arbitrators have
inherent jurisdiction to sanction conduct that occurred prior to a final, confirmed
arbitration award?
6. Does SCAs claimbased solely on an October 10, 2012 Reasoned
Decision by the United States Anti-Doping Agencythat the arbitrators should
order Relators to return all prize money fall within the scope of any enforceable
arbitration agreement?
7. Did the district court abuse its discretion by denying Relators
respective motions to stay the re-commenced arbitration proceeding, and do
Relators lack an adequate remedy at law?
STATEMENT OF FACTS
Arbitration, Settlement, and Agreed Final Award: SCA is engaged in the
business of insuring and indemnifying sponsors and team owners against certain
risks of payment for prizes and performance awards, primarily in sporting events.
5
MR 10, 703-04. On or about June 9, 2001, Tailwind Sports Corp. (through its
predecessor-in-interest, Disson Furst & Partners) purchased Contingent Prize
Contract #31122 from SCA for $420,000. MR 708. Under this contract, SCA
indemnified Tailwind for certain incentive compensation under an employment
agreement between Tailwind and professional cyclist Lance Armstrong, namely
compensation tied to Armstrongs performance in the Tour de France. Id.
A dispute arose regarding SCAs obligations under Contingent Prize
Contract #31122, culminating in an action to compel arbitration and a binding
arbitration between Armstrong and Tailwind as claimants and SCA as respondent.
4

MR 9, 14; see MR 708. The arbitration panel consisted of Richard D. Faulkner,
Richard Chernick, and Ted B. Lyon. MR 680 (Apx. B).
Before the arbitration took place, the parties agreed that SCA would deposit
disputed funds into the 298
th
District Courts registry and that, if certain conditions
were met, the funds would remain in the registry until the arbitration concluded.
MR 228-29, 1004-05. Thereafter, the 289
th
District Court issued an order abating
and administratively closing the case pending the final outcome of the arbitration.
MR 879. That order provided that no further actions could take place until the case

4
Defendant William Stapleton was Tailwinds CEO and served as its corporate representative
during the first arbitration. See MR 10, 18. Because the arbitrators acknowledged that Stapleton
was not a proper party to the re-convened arbitration, see MR 688, he did not join in Relators
motions and is not involved in this proceeding.
6
was returned to active status, and it created a thirty-day window to reopen the case
after a final decision from the arbitrators. Id.
During the arbitration, SCA alleged that Armstrong violated the rules of
competition in the 2002, 2003, and 2004 Tour de France races, and Armstrongs
alleged use of performance enhancing drugs (PEDs) was the primary topic of
consideration.

See MR 2-6, 8. SCA accused Armstrong of concealing his use of
PEDs and questioned him and numerous other witnesses extensively about those
allegations. Id.; MR 693.
The arbitrators did not rule; to the contrary, the parties elected to settle their
dispute before the arbitrators could issue a decision on the merits. See MR 9, 23-
24, 672 (Apx. A), 693-94 (Apx D). Significantly, at the time, SCA was facing
substantial penalties for insurance code violations for acting as an unauthorized
insurer, as the arbitrators had found that SCA was engaged in the business of
insurance. MR 148-151, 839-840, 1098-99, 1102. As part of the Compromise
Settlement Agreementwhich became effective on February 8, 2006 and
explicitly disclaimed reliance on any testimony or statements of the other party or
any witnessesthe parties consented to a Final Arbitration Award in Tailwinds
favor. MR 15, 672-73 (Apx. A), 680 (Apx. B), 693-94 (Apx. D).
The Compromise Settlement Agreement expressly states that [n]o party
may challenge, appeal or attempt to set aside the Arbitration Award, and that
[n]o promise or representation of any kind has been made to any Party or to
7
anyone acting for a Party, except as is expressly stated in this SETTLEMENT
AGREEMENT, and THE PARTIES execute this SETTLEMENT AGREEMENT
without reliance on any representation of any kind or character not expressly stated
in this SETTLEMENT AGREEMENT . . . . MR 672-74 (Apx. A). The
Agreement likewise states that [b]efore executing this SETTLEMENT
AGREEMENT, THE PARTIES became fully informed of the terms, contents,
conditions, and effect of this AGREEMENT, and received independent legal
counsel and advice before agreeing to the terms of this AGREEMENT, and that
the parties entered the agreement freely, by THE PARTIES own choice and
judgment, and without duress or other influence . . . . MR 674. Finally, the
Agreement provides for arbitration of any dispute or controversy . . . arising under
or in connection with this SETTLEMENT AGREEMENT or Contingent Prize
Contract #31122 before the original arbitration panel. MR 676-77.
In the Final Arbitration Award executed on February 8, 2006, the arbitrators
ordered SCA to pay $7.5 million to Tailwind and Armstrong. MR 680 (Apx. B).
This amount represented insurance proceeds under Contingent Prize Contract
#31122 reimbursing Tailwind for a $5 million bonus it owed Armstrong for his
performance in the 2004 Tour de France, plus $2.5 million in interest and costs.
See MR 14, 672 (Apx. A), 708. Pursuant to the Compromise Settlement
Agreement, the arbitrators did not state any reasons for their decision, but merely
implemented the parties agreed order. MR 680. That is because the Final
8
Arbitration Award was agreed to by the parties and was a material element of the
Compromise Settlement Agreement. See MR 672-73, 680. The arbitrators were
thus relieved of any right or duty to evaluate the parties testimony and evidence,
which did not, and indeed could not, have played any part in their entry of the
agreed Final Arbitration Award. See generally MR 672-80, 693-700 (Apx. D).
Moreover, by their express admissions, the parties made it crystal clear that the
testimony or pleadings in the underlying matter played no part whatsoever in the
decision to settle the case and that there was no provision or option for either party
to later change its mind about the settlement or to try and claw back the settlement
consideration, no matter what the circumstances or allegations. See generally MR
672-80.
In light of the agreed disposition, SCA did not move to modify or vacate the
Final Arbitration Award under the Texas General Arbitration Act (TAA). See
MR 1413-14; TEX. CIV. PRAC. & REM. CODE 171.054 (allowing arbitrators to
modify or correct award on limited grounds on application filed not later than the
20th day after the date the award is delivered to the applicant); id. 171.088
(authorizing application for court to vacate arbitration award to be filed not later
than the 90th day after the date of delivery of a copy of the award to the
applicant); id. 171.091 (authorizing application for court to modify award on
limited grounds if brought within 90 days). Nor did SCA attempt to reopen the
case in the 298
th
District Court within the time limits set by the courts order
9
abating and administratively closing the case pending the arbitration. See MR 879,
1413-14. Instead, pursuant to the Compromise Settlement Agreement and an
agreed, joint order from the 298
th
District Court, the funds SCA previously
deposited into the courts registry were transferred to Tailwind. MR 185, 672. The
agreed order stated that the court found that the transfer and assignment of the
registry funds to Tailwind was appropriate. MR 185. Given the previous
agreement to maintain the funds in the 298
th
District Courts registry until the
arbitration concluded in one partys favor, this agreed order releasing the funds to
Tailwind notified the court that the arbitration was concluded, and the parties
jointly asked the court to approve and effectuate the Award. MR 1332-1338.
Among other terms, the Compromise Settlement Agreement provided that
its terms were to remain confidential. MR 674-75. After the arbitration concluded,
however, SCA violated the confidentiality provisions, and Relators moved to
enforce the confidentiality agreement. MR 893-907. Relators sought sanctions for
SCAs conduct in providing information to the media after the arbitrations
conclusion. Id.
Tailwind Winds Up: Tailwind Sports Corp. (sometimes incorrectly referred
to in prior proceedings as Tailwind Sports, Inc.) was incorporated as a Delaware
Corporation registered to do business in Texas. See MR 711-731. Tailwinds
directors dissolved the corporation on December 31, 2007. Id. On the same day, a
liquidating trust was created, but it was subsequently dissolved on June 1, 2010. Id.
10
Neither the creation nor existence of the liquidating trust affected, in any material
way, the dissolution of Tailwind or the survival of claims against Tailwind for only
three years, as provided by statute. See TEX. BUS. ORGS. CODE 11.359, 11.351;
DEL. CODE ANN. tit. 8 278; see Frederic G. Krapf & Son, Inc. v. Gorson, 243
A.2d 713, 715 (Del. 1968); United States v. McDonald & Eide, Inc., 670 F. Supp.
1226, 1231 (D. Del. 1987), affd, 865 F.2d 73 (3d Cir. 1989); City Investing Co.
Liquidating Trust v. Contl Cas. Co., 624 A.2d 1191, 1197 (Del. 1993) (describing
and treating liquidating trust as separate entity from dissolved corporation to which
Section 278 does not apply).
SCA Files Suit to Set Aside the Arbitration Award: On February 7,
2013seven years after the arbitration concluded (as a result of the parties
voluntary settlement of their differences) and explicitly contrary to the plain
language in the voluntary settlement agreementSCA filed the underlying
lawsuit, naming Tailwind, Armstrong, and William Stapleton as defendants. See
MR 1-35; 1416-17. Although SCA asserted several different claims, the common
thread throughout the petition is its allegation that Tailwind, Armstrong, and
Stapleton procured the Compromise Settlement Agreement and resulting Final
Arbitration Award by extrinsic fraud. See MR 9, 12-16, 23, 27-28.
SCA principally contends that the defendants satisfied a condition rendering
SCA liable under Contingent Prize Contract #31122Armstrongs status as
Official Winner of the 2002, 2003, and 2004 Tour de France racesby
11
concealing Armstrongs use of PEDs from racing officials. While SCA asserts in
its petition that it settled the prior arbitration because of things the defendants did
or said, the Compromise Settlement Agreement explicitly and conclusively shows
otherwise. For example, SCA filed the underlying lawsuit despite (1) previously
settling and specifically disavowing that it relied on anything any of the defendants
ever said; and (2) an express agreement that it would never challenge, appeal, or
attempt to set aside the Final Arbitration Award. See MR 672-78 (Apx. A).
SCAs petition also alleges a putative cause of action for Vacating Award
and Settlement Agreement as Procured by Fraud. MR 27. The basis for this
cause of action is that Defendants maintained in the legal proceeding with SCA
that only outside entities such as [the United States Anti-Doping Agency
(USADA)] and the [Union Cycliste International] could adjudicate whether Mr.
Armstrong had properly been declared the official winner of the 2002-2004 Tour
de France races. Id. SCA claims that it and the Arbitration Panel were unaware
that Defendants had actively engaged in fraud with respect to those regulatory
bodies and that it could not have uncovered this fraud in the earlier arbitration
proceeding. Id. Specifically referencing Armstrongs concealment of his use of
PEDs, SCA also claims that Defendants extrinsic fraud resulted in an arbitration
process, award and settlement procured by extrinsic fraud and malfeasance and
that Mr. Armstrong was able to successfully hide his illegal use of [PEDs] from
SCA and the arbitrators. Id.
12
SCA Changes Course and Asks the Arbitrators to Re-convene:
Defendants Armstrong and Stapleton timely sought dismissal of SCAs lawsuit
under new Texas Rule of Civil Procedure 91a, which authorizes trial courts to
dismiss a cause of action on the grounds that it has no basis in law or fact. MR 317;
see TEX. R. CIV. P. 91a. All defendants also asserted pleas to the jurisdiction based
on SCAs failure to plead a valid ground for vacating the arbitration award, the
trial courts lack of jurisdiction to vacate a confirmed arbitration award, and other
grounds. MR 36, 315.
5

Rather than respond to any dispositive motion, SCA changed strategies and
asked the arbitrators to re-convene the prior arbitration proceedings. MR 32; see
MR 1416-17. In doing so, SCA cherry-picked the theories it wants to arbitrate,
while, at the same time, left numerous claims pending in the underlying lawsuit.
See MR 2-3.
SCA relies on what it describes as three material events as grounds for re-
convening the arbitration. First, SCA claims that Armstrong committed perjury and
submitted false pleadings in the original arbitration, primarily by denying PED use.
MR 632-33. Second, SCA asserts that Armstrong has since been stripped of all
Tour de France titles and that this fact undercuts the Final Arbitration Award. MR

5
These motions remain pending before the trial court. See MR 1416-17.
13
633. Third, SCA contends that USADA has ordered Armstrong to forfeit all prize
money earned in connection with his vacated racing titles. MR 633, 647.
Based on these allegations, SCA has asked the arbitrators to order that
Relators:
repay the $7.5 million settlement amount to SCA as sanctions for
perjury during the prior proceeding;
pay SCA another $1.65 to $3.5 million as attorney fees, costs,
expenses, and interest;
pay SCA another $2.5 million for business injury and reputation
loss;
pay SCA what may be another $9.5 million as forfeiture of all prize
money; and
pay SCA some additional, unspecified amount for filing false
pleadings in the prior proceeding.
MR 633-36. SCAs stated objective in the renewed arbitration proceeding is to
have the arbitrators punish both Tailwind and Armstrong, but in the first instance,
SCA seeks the return of what it paid to Tailwind under the Compromise Settlement
Agreement and Final Arbitration Award. MR 633-36, 650.
A Two-Arbitrator Majority Votes to Step In: Tailwind and Armstrong
repeatedly objected to re-convening the arbitration. MR 688, 1080, 1202, 1400.
Nevertheless, on October 29, 2013, two of the three arbitrators issued a Partial
Final Award on Jurisdiction declaring their intent to hear SCAs complaints and
issue another final award. MR 685-92 (Apx. C). In doing so, the majority
acknowledged that SCA asserts multiple theories seeking remedies that could be
14
perceived as attacking the 2006 Award. MR 688. The majority further
characterized the Compromise Settlement Agreement and agreed Final Arbitration
Award as merely the private equivalent of a temporary cease-fire. MR 689.
The third arbitrator dissented, observing that SCAs new arbitration request
was nothing more than a belated attempt to have the arbitrators vacate the 2006
Final Arbitration Award and instead find for SCA. MR 695 (Apx. D). The
dissenting arbitrator concluded that the law does not allow this Panel to address
[SCAs complaints] at this time and that SCA has not pled facts sufficient to
grant this Tribunal jurisdiction to re-decide claims that were resolved seven years
ago when this Panel issued a Final Award based on the agreement of the Parties.
MR 693-700. The dissent further held that SCAs claim did not fall within the
scope of any arbitration agreement between the parties. MR 697-99.
Motions to Stay and Ruling: Tailwind and Armstrong brought separate
motions to stay the re-convened proceeding under TAA section 171.023. MR 354,
479, 595, 732. Relators filed these motions in the case SCA initiated in February
2013. See MR 1. The trial court heard Relators amended motions on February 21,
2014. MR 593, 1422.
In an order signed on February 25, 2014 and transmitted to the parties the
next day, the trial court denied Relators motions without stating any grounds. MR
1411-12 (Apx. E). In effect, the trial courts order allows the re-convened
arbitration to go forward as scheduled on March 17, 2014 and allows SCA to
15
pursue discoveryincluding a deposition of Armstrong noticed for March 6,
2014from Relators in the interim. MR 1418-21.
WHY THE WRIT SHOULD BE GRANTED
This case presents two compelling questions that go beyond these parties
and this dispute. The first is whether a dissolved corporation can be forced to
arbitrate when it can neither sue nor be sued under statutory law. The trial court
effectively answered this first question yes when it denied Tailwinds motion to
stay arbitration, leaving Tailwind no recourse but to submit to arbitration or pursue
relief in this Court. Because a corporation dissolved more than three years before a
claim is no longer a viable entity, it can no longer be bound to any agreement to
arbitrate signed during its existence.
The second issue is whether a request for sanctions and forfeiture brought
seven years after the initial dispute ended through a negotiated settlement
agreement and agreed final arbitration award falls within the scope of an
arbitration clause contained in the settlement agreement. Rather than advancing
public policies favoring arbitration and settlement of disputes, the trial courts
apparent yes answer to this question unintentionally subverts those policies by
encouraging parties who later regret settling to try and manufacture a basis for re-
opening the proceedings, even though the parties resolved their dispute at arms
length and disclaimed reliance on others representations.
16
In both instances and others, the trial court misapplied the law and thus
abused its discretion. No adequate remedy exists short of mandamus. This Court
should therefore issue the writ.
ARGUMENT
When moving the arbitrators to re-convene, SCA asserted the following:

MR 634. Unable to point to any specific agreement to re-convene the 2006
proceeding based on changed circumstances or newly discovered evidence, SCA
ultimately relied on the arbitration clauses contained in Contingent Prize Contract
#31122 and the Compromise Settlement Agreement to try and support reviving the
arbitration. See MR 847-48, 855-56. The re-convened arbitration cannot be
justified under those agreements.
17
I. Mandamus Standards of Review
A writ of mandamus is available when a trial court clearly abuses its
discretion and a relator has no adequate remedy at law. See Walker v. Packer, 827
S.W.2d 833, 839 (Tex. 1992) (orig. proceeding); see also In re McAllen Med. Ctr.,
275 S.W.3d 458, 462 (Tex. 2008). With respect to fact issues, an abuse of
discretion is shown when the record establishes that the trial court could
reasonably have reached only one decision. Walker, 827 S.W.2d at 840. However,
[a] trial court has no discretion in determining what the law is or applying the
law to the facts, even when the law is unsettled. Id.; see In re Prudential Ins. Co.,
148 S.W.3d 124, 135 (Tex. 2004). Thus, a clear failure by the trial court to
analyze or apply the law correctly will constitute an abuse of discretion. Walker,
827 S.W.2d at 840.
Generally, a legal remedy exists if the relator can raise the complaint on
appeal. Id. at 840. The Texas Supreme Court has granted mandamus review in
circumstances where the relator would seemingly have no appellate review of the
orders at issue, and would have to endure the expense of complete trial that would
be wasted. In re Columbia Med. Ctr. of Las Colinas, Subsidiary, L.P., 290 S.W.3d
204, 209 (Tex. 2009).
If an appeal is available, the question becomes whether it is adequate, which
is analyzed by determining whether any benefits to mandamus review are
outweighed by the detriments. In re Prudential, 148 S.W.3d at 136. This analysis
18
requires the court to weigh public and private interests, recognizing thatrather
than categorical determinationsthe adequacy of an appeal depends on the facts
involved in each case. In re United Servs. Auto. Assn, 307 S.W.3d 299, 313
(Tex. 2010) (quoting In re McAllen Med. Ctr., 275 S.W.3d at 469). Ultimately, an
appellate remedy is inadequate, justifying the issuance of mandamus relief, when
the parties stand to lose their substantial rights, Perry v. Del Rio, 66 S.W.3d 239,
257 (Tex. 2001) (quoting Walker, 827 S.W.2d at 842); that is, where the very act
of proceeding to trialregardless of the outcomewould defeat the substantive
right involved. In re McAllen Med. Ctr., 275 S.W.3d at 465.
II. Law Governing Motions to Stay Arbitration
Texas law strongly favors arbitration. See Cantella & Co. v. Goodwin, 924
S.W.2d 943, 944 (Tex. 1996) (per curiam); Phillips v. ACS Mun. Brokers, Inc., 888
S.W.2d 872, 875 (Tex. App.Dallas 1994, no writ). However, [a] party cannot
be required to arbitrate unless it has agreed to do so. Kilroy v. Kilroy, 137 S.W.3d
780, 785 (Tex. App.Houston [1st Dist.] 2004, no pet.) (internal quotations
omitted); see Roe v. Ladymon, 318 S.W.3d 502, 512 (Tex. App.Dallas 2010, no
pet.) ([A]rbitration, being a matter of contract, is a way to resolve those
disputesbut only those disputesthat the parties have agreed to submit to
arbitration. (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943,
115 S.Ct. 1920 (1995)).
19
The TAA authorizes a trial court to stay an arbitration commenced or
threatened on application and a showing that there is not an agreement to
arbitrate. TEX. CIV. PRAC. & REM. CODE 171.023(a). This statute, like its
counterpart authorizing courts to grant motions to compel arbitration,
6
requires a
decision on two threshold issues: (1) the existence of an agreement to arbitrate
between the parties; and (2) whether the claims asserted fall within the agreements
scope. See Gables Cent. Const., Inc. v. Atrium Cos., Inc., No. 05-07-00438-CV,
2009 WL 824732, at *2 (Tex. App.Dallas Mar. 31, 2009, pet. abated); Dennis v.
Coll. Station Hosp., L.P., 169 S.W.3d 282, 285 (Tex. App.Waco 2005, pet.
denied); Phillips, 888 S.W.2d at 875; L&L Kempwood Assocs., L.P. v. Omega
Builders, Inc., 972 S.W.2d 819, 820-821, 825 (Tex. App.Corpus Christi 1998,
orig. proceeding), mand. granted on other grounds, In re L&L Kempwood Assocs.,
Inc., 9 S.W.3d 125 (Tex. 1999). These are questions of substantive arbitrability
subject to judicial determination unless the parties clearly and unmistakably
provide otherwise. Roe, 318 S.W.3d at 512 (citing Howsam v. Dean Witter
Reynolds, Inc., 537 U.S. 79, 83, 123 S.Ct. 588 (2002)); Burlington Res. Oil & Gas
Co. v. San Juan Basin Royalty Trust, 249 S.W.3d 34, 39 (Tex. App.Houston [1st
Dist.] 2007, pet. denied); see Saxa Inc. v. DFD Architecture Inc., 312 S.W.3d 224,

6
TEX. CIV. PRAC. & REM. CODE 171.021.
20
229 (Tex. App.Dallas 2010, pet. denied) (noting that arbitrability is generally a
gateway issue to be decided by a court rather than an arbitrator (citation omitted)).
At first blush, Section 171.023 might appear to place the burden of proof on
the party resisting arbitration. Because arbitration is a creature of contract,
however, a party attempting to force another into arbitration bears the ultimate
burden of proving that an agreement exists, even when a motion to stay arbitration
is filed before a motion to compel. See J.M. Davidson, Inc. v. Webster, 128 S.W.3d
223, 227 (Tex. 2003) (noting that presumption in favor of arbitration arises only
after the party seeking to compel arbitration proves that a valid arbitration
agreement exists); In re Neutral Posture, Inc., 135 S.W.3d 725, 727, 730 (Tex.
App.Houston [1st Dist.] 2003, orig. proceeding) (holding that party seeking
arbitration had initial burden of proving arbitration agreement exists when motion
to stay was filed and non-movant responded to that motion and asked court to deny
motion and compel arbitration); L&L Kempwood Assocs., 972 S.W.2d at 820-821,
825 (holding that party seeking to avoid stay of arbitration had initial burden of
21
proving the existence of valid and enforceable arbitration agreement). SCA
accepted this burden in the court below. MR 855.
7

Arbitration agreements are interpreted under traditional contract
principles. J.M. Davidson, 128 S.W.3d at 227. The courts primary concern is to
ascertain the parties true intentions as expressed in the instrument. Id. To do so,
the court must examine and consider the entire writing in an effort to harmonize
and give effect to all its provisions. Id. No single provision is giving controlling
effect; instead, all provisions must be considered with reference to the whole
instrument. Id.
Whether a claim falls within the scope of an arbitration clause is a question
of law. BDO Seidman, LLP v. J.A. Green Dev. Corp., 327 S.W.3d 852, 854 (Tex.
App.Dallas 2010, no pet.). Doubts about the scope of an arbitration agreement
are ordinarily resolved in favor of coverage. In re D. Wilson Const. Co., 196
S.W.3d 774, 782 (Tex. 2006). However, the policy favoring arbitration is not
without limits; it cannot support stretching a contractual clause beyond the parties

7
Allocating the burden this way makes sense for at least two reasons: First, it is consistent with
the burden placed on a party moving to compel arbitration under Section 171.021 in that opposing
a motion to stay effectively operates as a motion to compel. See TEX. CIV. PRAC. & REM. CODE
171.023(c) (requiring court to order parties to arbitrate if it finds for party opposing stay).
Second, it avoids the evidentiary anomaly of requiring the party moving to stay arbitration to prove
the non-existence of an arbitration agreement. See Canzeri Co. v. AON Services Group, Inc., No.
05-99-01656-CV, 2000 WL 721713, at *2 & n.1 (Tex. App.Dallas June 6, 2000, no pet.) (not
designated for publication) (noting inherent difficulty of requiring party who moved to stay
arbitration to prove a negative).
22
intended scope or disregarding plain and unambiguous provisions in the
agreement. Burlington Resources Oil & Gas Co., L.P. v. San Juan Basin Royalty
Trust, 249 S.W.3d 34, 44 (Tex. App.Houston [1st Dist.] 2007, pet. denied);
McReynolds v. Elston, 222 S.W.3d 731, 740 (Tex. App.Houston [14th Dist.]
2007, no pet.).
III. The Trial Court Abused Its Discretion by Failing to Stay the
Arbitration Because, as a Dissolved Corporation, Tailwind Is No
Longer a Party to Any Arbitration Agreement with SCA
As noted, one cannot be forced to arbitrate absent a valid agreement to do
so. Because Tailwind is no longer a viable entity, it cannot be compelled to
arbitrate under the Compromise Settlement Agreements arbitration clause or any
other arbitration agreement.
As the Texas Supreme Court has recognized, under the common law,
dissolution terminate[s] the legal existence of a corporation. Once dissolved, the
corporation [can] neither sue nor be sued, and all legal proceedings in which it was
a party [are] abated. Hunter v. Fort Worth Capital Corp., 620 S.W.2d 547, 549-50
(Tex. 1981). In response to the common-law rule, the trust fund doctrine emerged
whereby a creditor of the dissolved corporation could pursue the traceable assets of
the dissolved corporation on the theory that such assets were burdened with a lien
in the creditors favor. Pellow v. Cade, 990 S.W.2d 307, 313 (Tex. App.
Texarkana 1999, no pet.); see Hunter, 620 S.W.2d at 550. As early as 1879, the
Legislature enacted remedial statutes embodying the trust fund doctrine in an effort
23
to supplant the common-law abatement rule. Hunter, 620 S.W.2d at 550. The
effect of these statutes was to supplant the equitable trust fund theory by declaring
a statutory equivalent. In Texas, recognition of the trust fund theory, as applied to
dissolved corporations, did not exist apart from these statutes. Id.
The Texas Legislature, however, imposed severe limits on the trust fund
doctrine in the predecessors to Sections 11.351, 11.356, and 11.359 of the Texas
Business Organizations Code. TEX. BUS. ORGS. CODE 11.351; 11.356, 11.359.
Through these provisions, the Legislature likewise embodied the trust fund
doctrine in its currently limited state. Hunter, 620 S.W.2d at 549. Specifically,
Section 11.359(a) provides: Except as provided by Subsection (b), an existing
claim by or against a terminated filing entity is extinguished unless an action or
proceeding is brought on the claim not later than the third anniversary of the date
of termination of the entity. TEX. BUS. ORGS. CODE 11.359. Notably, a dissolved
corporation can only be liable for a claim existing at the time of its dissolution. Id.
11.351.
The current Texas statutory scheme applies to arbitration proceedings, and it
precludes any arbitration of SCAs claims against Tailwind. Section 11.359(a)
applies its prohibition against action[s] and proceeding[s] brought after three
years following a corporations dissolution. See id. The term proceeding is
broadly defined, and it should include an arbitration proceeding. See Reveille Tool
& Supply, Inc. v. State, 756 S.W.2d 102, 103 (Tex. App.Austin 1988, no writ)
24
(discussing phrase action or proceeding in substantially similar predecessor
statute and finding that it included administrative proceedings). Even if it did not,
the statutes make no allowance for arbitration proceedings instituted after a
corporation has been dissolved for three years. See TEX. BUS. ORGS. CODE
11.351; 11.356, 11.359. Either way, as a dissolved entity that can no longer be
subjected to a legal proceeding, Tailwind is no longer a party to any arbitration
agreement with SCA and therefore cannot be forced to arbitrate under Texas law.
The result would be the same under Delaware law. In Delaware, the trust
fund doctrine has been largely discredited and abandoned[.] See CML V, LLC v.
Bax, 6 A.3d 238, 253-54 (Del. Ch. 2010), affd, 28 A.3d 1037 (Del. 2011). The
Delaware Legislature, like the Texas Legislature, has emasculated the doctrine by
declaring that a dissolved Delaware corporation can only sue or be sued within
three years after its dissolution date. DEL. CODE ANN. tit. 8 278; see Frederic G.
Krapf & Son, Inc., 243 A.2d at 715; McDonald & Eide, Inc., 670 F. Supp. at 1231.
The existence of a liquidating trust does not extend the three-year period. See City
Investing Co. Liquidating Trust., 624 A.2d at 1197 (describing and treating
liquidating trust as separate entity from dissolved corporation to which Section 278
does not apply).
By including Tailwind in its re-convened arbitration, SCA is essentially
trying to enforce its arbitration agreement with Tailwind more than three years
after Tailwind has dissolved. See MR 711-31. Delaware law, however, does not
25
allow a party to enforce an obligation against a dissolved corporation more than
three years after the dissolution date. See Aluminum Co. of Am. v. Beazer E., Inc.,
124 F.3d 551, 567 (3d Cir. 1997) (citing Contl Cas. Co., 624 A.2d at 1195).
Further, Delawares statutory language is more restrictive than Texas law
when dealing with dissolved corporations. Under Section 278 of the Delaware
Code, a corporation may only be continued for three years after dissolution for the
prosecution or defending of suits. DEL. CODE ANN. tit. 8 278. The statute makes
no accommodation for arbitration proceedings. See id. As such, under Delaware
law, an arbitration panel could not exercise jurisdiction over claims against a
dissolved corporation. See id. Assuming that the statute made allowance for
arbitration proceedings, however, an arbitration panel would still lack jurisdiction
over a dissolved corporation if a proceeding were convened after three years
following the corporations dissolution. See id.
The three-year period is not a limitations periodit is a survival period,
the expiration of which extinguishes the claim by or against the corporation.
Pellow, 990 S.W.2d at 313. Consequently, after the claim is extinguished, a court
has no power to adjudicate it. Id. [W]hen a cause of action is outside a survival
statutes ambit, the cause of action is extinguished and no longer exists. Id. Any
judgment thereon is a nullity. Id. If a dissolved entity can no longer be sued in
court, then it likewise cannot be forced to defend itself in an arbitration proceeding.
26
In the trial court, SCA did not contest the proof that Tailwind dissolved on
December 31, 2007, more than three years before SCA filed this lawsuit and
attempted to reconvene the prior arbitration. Compare MR 1 and MR 632-52,
with MR 711-31. Any claim that SCA may have had against Tailwind was
therefore extinguished upon the three-year anniversary of its dissolutionmore
than two years before SCA instituted this lawsuit or attempted to reconvene the
prior arbitration. Because there is no longer an entity capable of having agreed to
arbitration under the Compromise Settlement Agreement or any other arbitration
clause, no enforceable arbitration agreement exists between Tailwind and SCA.
Accordingly, the trial court abused its discretion by declining to stay the arbitration
with respect to Tailwind. See TEX. CIV. PRAC. & REM. CODE 171.023.
IV. The Trial Court Abused Its Discretion to the Extent It Deferred to the
Arbitrators on the Arbitrability Issue and Construed the Compromise
Settlement Agreement to Require Arbitration of All Disputes
In the court below, SCA contended that the parties to the Compromise
Settlement Agreement clearly agreed to have the original Panel resolve all
disputes, including the issue of arbitrability. MR 854 (second emphasis added).
Because the trial court did not issue a specific order, but instead simply denied
Relators motions, Relators have no way of knowing whether the court agreed with
SCAs position. If it did, the court misinterpreted the relevant agreement and thus
abused its discretion.
27
A. Arbitrability Was a Question for the Court Because the
Compromise Settlement Agreement Does Not Clearly and
Unmistakably Provide Otherwise
SCAs position fails to heed the strict requirement for determining the
threshold question of arbitrability: [A]bsent clear and unmistakable evidence
that the parties agreed to the contrary, the primary power to decide such issues lies
with the courtsnot an arbitrator. Roe, 318 S.W.3d at 512 (citing Howsam, 537
U.S. at 84; First Options, 514 U.S. at 944; see Continuum Health Servs., LLC v.
Cross, No. 05-11-01520-CV, 2012 WL 5845367, at *1 (Tex. App.Dallas Nov.
19, 2012, no pet.) (Courts do not assume the parties agreed to arbitrate
arbitrability unless there is clea[r] and unmistakabl[e] evidence that they did so.
(quoting Roe and authorities cited) (internal quotations omitted)).
The only evidence SCA cited on this issue is generic language in the
Compromise Settlement Agreement stating that (1) the arbitrators shall have
exclusive jurisdiction over the parties hereto with respect to any dispute or
controversy among them arising under or in connection with this SETTLEMENT
AGREEMENT or Contingent Prize Contract #31122 and (2) each of the parties
hereby submits to the jurisdiction of that Panel and waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
personam or subject matter jurisdiction and any similar grounds . . . . MR 885-86.
These provisions, without more, are plainly insufficient to vest the power to
determine arbitrability with the arbitrators.
28
The first clause assumes the existence of a dispute arising under the
referenced agreements. Without such a disputea matter sharply contested here
the arbitrators exclusive jurisdiction means nothing.
The second clause comes somewhat closer to what SCA wants it to say, but
still does not cross the clear and unmistakable threshold. Submitting to the
jurisdiction of that Panelconsisting of the named arbitratorsand waiv[ing]
any objection to such jurisdiction on the stated grounds neither clearly nor
unmistakably expands the scope of arbitrable disputes to the issue of arbitrability
itself. Jurisdiction, venue, and the like are not the same as arbitrability.
In Continuum Health Services, LLC v. Cross, a case following Roe, this
Court recognized the type of language meeting the clear and unmistakable
standard. The arbitration agreement in question expressly provided that [w]hether
such Dispute will be subject to arbitration will likewise be determined in such
arbitration as will the determination as to whether all procedural conditions
precedent to arbitration have been satisfied. See 2012 WL 5845367, at *1. The
Compromise Settlement Agreement at issue here falls far short of this example.
Arbitrability in this case was plainly an issue for the trial court.
B. The Compromise Settlement Agreement Does Not Require
Arbitration of Any and All Disputes Between the Parties
SCA further relied on the second clause quoted above to assert that the
parties must submit all disputes between them to the original arbitration panel.
29
MR 854. This construction reads the language restricting arbitrable disputes to
those arising under the referenced agreements right out of the Compromise
Settlement Agreement, in violation of basic contract-construction rules. See J.M.
Davidson, 128 S.W.3d at 227 (applying those rules to arbitration agreements).
SCAs interpretation of the cited language is unreasonable and fails to give every
clause its intended effect. The trial court abused its discretion to the extent it
agreed with SCAs construction.
V. The Trial Court Abused Its Discretion to the Extent It Concluded That
Relators Waived Any Issues Regarding the Scope of the Arbitration
Clause by Conduct
SCA asserted two types of waiver by conduct in the court below. First, SCA
argued that Relators waived their right to contest arbitrability by allowing the
arbitrators to opine on the issue first. MR 854. Second, SCA contended that
Relators themselves authorized the arbitrators to police the arbitration process and
issue sanctions by asking for similar relief after the original arbitration had closed.
MR 861-62. By accepting either argument, the trial court abused its discretion.
A. Relators Preserved Their Objections to the Arbitrators Ability to
Decide SCAs Sanctions and Forfeiture Claims
SCAs first waiver argument is disingenuous. SCA cited no authority in the
trial court supporting the proposition that failing to seek relief in court before
arbitrators decide the issue of arbitrability somehow waives the complaint. See
MR 854. Lodging an objection to jurisdiction, based on the lack of an arbitration
30
clause governing the dispute before the arbitrators, was sufficient to preserve the
issue. Holcim (Tex.) Ltd. Pship v. Humboldt Wedag, Inc., 211 S.W.3d 796, 803
(Tex. App.Waco 2006, no pet.) (Because Holcim initially objected to the
arbitrability of HWIs claims before participating in the second phase of the
arbitration proceedings, Holcim is not estopped to deny that HWI's claims lie
within the scope of the arbitration clause in the turnkey agreement.).
Indeed, the statute authorizing a motion to stay arbitration expressly
contemplates filing after an arbitration has been commenced. See TEX. CIV. PRAC.
& REM. CODE 171.023(a) (Apx. F). Moreover, this Courts Roe decision, which
SCA cited below, expressly rejects the notion that one submits to an arbitrators
jurisdiction by objecting to that jurisdiction. See 318 S.W.3d at 517-18. That is
precisely what Relators did here, as evidenced by the arbitrators jurisdictional
ruling. See MR 685 (Apx. C); see also MR 693 (Apx. D), 1080, 1202, 1400.
B. Relators 2006 Request for Sanctions Based on Breach of
Confidentiality Obligations in the Panels Order and the
Compromise Settlement Agreement Did Not Empower the
Arbitrators to Decide Sanctions Claims for All Time
In June 2006, a few months after the initial arbitration concluded, Relators
asked the arbitrators to impose sanctions on SCA for breaching certain
confidentiality obligations the panel imposed by order during the proceeding and
violating the express terms of the Compromise Settlement Agreement. MR 893.
Citing an unpublished Fifth Circuit case, SCA argued in the trial court that this
31
action gave the arbitrators the continuing power to sanction Relators, despite the
passage of seven years and the express disclaimers of reliance and appealability in
the Compromise Settlement Agreement. MR 861-63. SCA ignores the fact that
Relators request for enforcement of the confidentiality provision in the Settlement
Agreement was entirely consistent with the arbitration clause in the agreement and
applied to conduct that occurred after the Final Arbitration Award, while SCAs
belated attempt to undermine the Final Arbitration Award is inconsistent with and
would undermine the express terms of the agreement. The arbitrators prior
confidentiality order was contemplated to be enforceable after a final award; for
example, discovery documents were to be returned to the producing party within
90 days after the final award. MR 895, 1473. Any violation of that obligation
would necessarily come to the panels attention more than 90 days subsequent to
the entry of a final order. MR 1473-74.
SCA erroneously relies on Hamstein Cumberland Music Group v. Williams,
532 F. Appx 538, 539 (5th Cir. 2013) (not designated for publication). In that
case, Hamstein appealed the denial of its motion to confirm an arbitration award
based on the trial courts finding that the arbitrator exceeded his authority. Id.
There, both parties moved for sanctions during a pending arbitration based on the
same conductfailure to comply with discovery requests. Id. at 541. The arbitrator
sanctioned Williams, but the district court held that the arbitrator lacked authority
to issue sanctions and refused to confirm that portion of the award. Id. at 541-42.
32
The Fifth Circuit disagreed, stating that Williams expressly submitted the
issue by moving for sanctions for the exact same reason that Hamstein moved for
sanctions in the first placeWilliams claimed that Hamstein had failed to respond
to discovery that he had requested of Hamstein. Id. at 543. Citing Executone
Information Systems, Inc. v. Davis, the Court held that [t]he scope of an
arbitrator's authority is a function of both the arbitration agreement and the parties'
submissions, which include both formal, written submission agreements and
merely asking the arbitrator to decide an issue. Id. (citing 26 F.3d 1314, 1323 (5th
Cir. 1994).
In Executone, however, the Fifth Circuit made clear that [i]f the parties go
beyond their promise to arbitrate and actually submit an issue to the arbitrator, we
look both to the contract and to the scope of the submissions to the arbitrator to
determine the arbitrator's authority. 26 F.3d at 1323 (emphasis added). The Court
further stated that the parties may agree to arbitration of disputes that they were
not contractually compelled to submit to arbitration, and held that the parties
jointly submitted a broad issue for the arbitrators decision in that case, which
encompassed the claims at issue. Id.; see also Horton Automatics v. Indus. Div. of
Communications Workers of Am., 506 Fed. Appx. 253, 257 (5th Cir. 2013) (not
designated for publication) (reviewing precise scope of submission and
determining that issue was not submitted by agreement); John Morrell & Co. v.
33
Local Union 304A of United Food & Commercial Workers, AFL-CIO, 913 F.2d
544, 561 (8th Cir. 1990) (same).
Here, it is clear that Relators earlier motion for sanctions based on a breach
of the arbitrators confidentiality order and the confidentiality provisions in the
Compromise Settlement Agreement after the arbitrations conclusion were
expressly authorized by the arbitration clausethe Agreement provides for
arbitration of any dispute or controversy . . . arising under or in connection with
this SETTLEMENT AGREEMENT or Contingent Prize Contract #31122 before
the original arbitration panel. MR 676-77 (Apx. A). Relators moved for sanctions
based on conduct that occurred after the arbitration concluded, but the request was
based on an obligation that expressly arose both under the panels ongoing order
and the Compromise Settlement Agreement itself, which Relators were
indisputably entitled to enforce. MR 883-884, 893-907.
SCAs request for sanctions, by contrast, is not contemplated by any
agreement. The Compromise Settlement Agreement expressly states that [n]o
party may challenge, appeal or attempt to set aside the Arbitration Award, and
that [n]o promise or representation of any kind has been made to any Party or to
anyone acting for a Party, except as is expressly stated in this SETTLEMENT
AGREEMENT, and THE PARTIES execute this SETTLEMENT AGREEMENT
without reliance on any representation of any kind or character not expressly stated
in this SETTLEMENT AGREEMENT . . . . MR 672-74 (Apx. A). The
34
Agreement likewise states that [b]efore executing this SETTLEMENT
AGREEMENT, THE PARTIES became fully informed of the terms, contents,
conditions, and effect of this AGREEMENT, and received independent legal
counsel and advice before agreeing to the terms of this AGREEMENT, and that
the parties entered the agreement freely, by THE PARTIES own choice and
judgment, and without duress or other influence . . . . MR 674.
The two requests for relief could not be more different. Analyzing the
arbitration agreement in its entirety and the precise scope of the submissions to the
panel to determine its authority, it is clear that Relators 2006 request was not an
implicit submission to the panel authorizing it to sanction Relators as SCA
requests. The arbitrators simply have no authority to sanction Relators for conduct
that occurred during the arbitration in light of the entire contract.
VI. SCAs Requests for Arbitrator-Ordered Sanctions and Forfeiture of
Prize Money Exceed the Scope of Any Arbitration Clause That Might
Be Enforced Against Relators and Are Not Authorized by Any
Inherent Power
The Compromise Settlement Agreements arbitration provision states in
relevant part:
This SETTLEMENT AGREEMENT shall be governed by,
construed, interpreted and the rights of the parties determined in
accordance with the laws of the State of Texas, without regard to
conflict of law principles thereof. The Arbitration Panel consisting of
Richard Faulkner, Richard Chernick and Ted Lyon shall have
exclusive jurisdiction over the parties hereto with respect to any
dispute or controversy among them arising under or in connection
35
with this SETTLEMENT AGREEMENT or Contingent Prize
Contract #31122 . . . .
MR 676-77 (Apx. A). This language cannot be viewed in isolation to support
SCAs position that any complaint even remotely related to the Compromise
Settlement Agreement or Contingent Prize Contract #31122 must be submitted to
arbitration before the original panel.
The trial court abused its discretion by impliedly concluding that SCAs
sanctions and forfeiture claims fall within the scope of an enforceable arbitration
clause. There is a strong presumption in favor of finality of arbitration awards. And
because the award was confirmed by the district court, no motion to vacate could
be brought. Moreover, the functus officio doctrine provides that the arbitration
panel has no further authority to go behind the award or modify it in any way,
including through SCAs disingenuous sanctions and disgorgement constructs.
There simply is no more inherent power to sanction or order disgorgement based
on issues that were fully and finally settled by the parties and incorporated into a
confirmed, final arbitration award.
A. The Compromise Settlement Agreement Limits the Scope of Any
Arbitrable Issues to Those Involving Performance of Its Terms
Although the Compromise Settlement Agreements arbitration clause may
seem broad, even broad arbitration provisions have their limits. In re Great W.
Drilling, Ltd., 211 S.W.3d 828, 840 (Tex. App.Eastland 2006, orig. proceeding)
(citing Pennzoil Explor. & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1067
36
n.8 (5th Cir. 1998)), mandamus granted on other grounds, In re Gulf Explor., LLC,
289 S.W.3d 836 (Tex. 2009). The Texas Supreme Court has instructed courts to
apply traditional contract principles to arbitration agreements in an effort to
ascertain the parties true intentions as the instrument expresses them. See J.M.
Davidson, 128 S.W.3d at 227. To follow this instruction, the court must consider
the entire document and give effect to all of its provisions, not just the arbitration
clause. See id.
Viewed as a whole, Compromise Settlement Agreement expresses a clear
intent to end any controversy between the signatories and limit future claims to
those involving performance of the Agreement itself. This intent is expressed in the
following provisions:
Consideration consisting of SCAs lone remaining obligation under
Contingent Prize Contract #31122reimbursement of the bonus
amount Tailwind owed to Armstrong after the 2004 Tour de France.
MR 672 (Apx. A); see MR 645, 708.
Terms requiring payment of the balance within one year
unconditionally and without any withholding or offset, regardless of
the circumstances or any claim made by Respondents, including any
claims by Respondents that Claimants have breached this Agreement
in any way. MR 673.
An Arbitration Award, signed by all three Arbitrators, ordering
Respondents to pay to Claimants the sum of $7,500,000.00 shall be
entered on or before February 9, 2006. Id.
Express language stating that [n]o party may challenge, appeal or
attempt to set aside the Arbitration Award. Id.
37
The provision that the SETTLEMENT AGREEMENT is fully and
forever binding on THE PARTIES, and their heirs, executors,
administrators, successors, and assigns[.] MR 674.
An express disclaimer of reliance: No promise or representation of
any kind has been made to any Party or to anyone acting for a Party,
except as is expressly stated in this SETTLEMENT AGREEMENT,
and THE PARTIES execute this SETTLEMENT AGREEMENT
without reliance on any representation of any kind or character not
expressly stated in this SETTLEMENT AGREEMENT . . . . Id.
A strict merger clause: THE PARTIES each acknowledge that this
instrument constitutes the entre agreement between them with respect
to the matters being compromised and settled in this SETTLEMENT
AGREEMENT, and that this SETTLEMENT AGREEMENT
supersedes any and all prior agreements and understandings relating
to the subject matter hereof. MR 676.
Accordingly, the only dispute[s] or controvers[ies] that could possibly
aris[e] under or in connection with [the Compromise Settlement Agreement] or
Contingent Prize Contract #31122 were any breaches of express conditions of the
Settlement Agreement, which consisted of payment obligations, representations
and warranties, and confidentiality requirements. See In re Great W. Drilling, Ltd.,
211 S.W.3d at 840 (examining broad arbitration clause and holding that agreement
defining scope of parties duties under contract could not be reasonably interpreted
as requiring arbitration of claims clearly beyond those definitions and limitations);
see also MR 699 (identifying breach of confidentiality as dispute falling within
scope of agreement).
Contingent Prize Contract #31122 imposes no greater obligation. That
agreement provides in part: [Tailwind] agrees that any dispute arising under this
38
contract shall be resolved by binding arbitration pursuant to the Texas General
Arbitration Act. MR 708. Because the Compromise Settlement Agreement
expressly supersedes Contingent Prize Contract #31122, no claim against Relators
can arise under or even in connection with Contingent Prize Contract #31122.
The Compromise Settlement Agreements plain effect was to cut off all
claims existing on February 8, 2006 and limit future claims to those relating to
performance of the Agreement. As such, no sanction or forfeiture based on conduct
predating the Agreement could be arbitrable. By allowing SCA to pursue claims
unrelated to performance in arbitration, the trial court abused its discretion.
B. SCAs Claims Are Independent of the Contracts Containing the
Arbitration Clauses and Therefore Are Outside the Proper Scope
of Arbitration
The dissenting arbitrator offered another reason why the Compromise
Settlement Agreements arbitration clause is not triggered here. Importantly, the
[Compromise Settlement Agreements] arbitration clause limits itself to arbitration
of any dispute among the parties arising under or in connection with [the
Compromise Settlement Agreement or Contingent Prize Contract #31122].
MR 698. As the dissenting arbitrator noted, courts have interpreted arbitration
clauses providing for arbitration of any and all disputes arising under or in
connection with a contract as narrower in scope than clauses providing for
arbitration of any and all disputes between the parties. Id. (citing Tittle v. Enron
Corp., 463 F.3d 410, 422 (5th Cir. 2006); AutoNation USA Corp. v. Leroy, 105
39
S.W.3d 190, 197 (Tex. App.-Houston [14th Dist.] 2003, orig. proceeding); In re
Conseco Fin. Serv. Corp., 19 S.W.3d 562, 570 (Tex. App.Waco 2000, orig.
proceeding)). As the dissenting arbitrator further explained, arbitrability can turn
on the factual allegations made. If the supporting facts alleged have a significant
relationship to or are factually intertwined with the contract, then the claim falls
within the agreements scope and is arbitrable. MR 698 (citing Dennis v. Coll.
Station Hosp., L.P., 169 S.W.3d 282, 285 (Tex. App.Waco 2005, pet. denied)).
Conversely, if the alleged facts stand alone and are completely independent from
the contract, arbitration cannot be compelled. Id. (citing Pennzoil Co. v. Arnold Oil
Co., 30 S.W.3d 494, 498 (Tex. App.San Antonio 2000, orig. proceeding)).
Applying these principles to the matter now before the Court, the dissenting
arbitrator concluded:
The relief requested by SCA in its Motion to Reconvene
Arbitration and Request for Sanctions and Forfeiture against
Claimants is not predicated on a claim for breach of the [Compromise
Settlement Agreement] or a claim for fraudulent inducement in
connection with the [Compromise Settlement Agreement]. Instead, it
asserts that fraudulent testimony by Armstrong in the 2006 litigation
resulted in an improper award, and so the funds paid to Claimants
pursuant to that award should be returned to SCA. In addition, SCA
requests sanctions for the fraudulent conduct as compensation for
certain tort-based damages.
Since SCAs legal claims are based solely on fraud alleged to
have occurred during the 2006 arbitration proceedings, the dispute
could be maintained without reference to the [Compromise Settlement
Agreement] or [Contingent Prize Contract #31122]. Therefore, the
dispute is not arising under or in connection with the [Compromise
Settlement Agreement] or [Contingent Prize Contract #31122], and so
40
does not fall within the scope of the arbitration provision at issue in
this case.
MR 698-99 (Apx. D).
SCA has not brought claims for breach of either Contingent Prize Contract
#31122 or the Compromise Settlement Agreement or fraudulent inducement into
those agreements. The penalty SCA asks the arbitrators to impose involves
sanctions for conduct in the previous proceedings and forfeiture allegedly ordered
by an entity that is not a party here. The dissenting arbitrators reasoning further
supports the only valid conclusion that could be reached on this record: SCAs
sanctions and forfeiture claims are not independently arbitrable under the relevant
agreements. The trial court abused its discretion if it concluded otherwise.
C. Public Policy Favors Treating Settlement Agreements and
Arbitration Awards as Final
SCAs demands for sanctions and forfeiture are not new disputes or
controversies arising under or in connection with the Compromise Settlement
Agreement or Contingent Prize Contract #31122. If they were, any arbitration
could be reopened years after the fact by asserting that newly discovered evidence
invalidated the result. Like judgments, strong public policy supports treating both
settlement agreements and arbitration awards as final. See Wright v. Sydow, 173
S.W.3d 534, 551-52 (Tex. App.Houston [14th Dist.] 2004, pet. denied) (citing
multiple authorities, including TEX. CIV. PRAC. & REM. CODE 154.002, for
proposition that settlement agreements are highly favored under law);
41
Crossmark, Inc. v. Hazar, 124 S.W.3d 422, 429 (Tex. App.Dallas 2004, pet.
denied) (noting that [a]n arbitration award has the same effect as a final judgment
from a court of last resort). Reopening an arbitration more than seven years after
the fact to consider whether a party should be sanctioned for conduct in the
original proceeding or to consider whether a third-partys actions may invalidate
the award is inconsistent with these policies.
Indeed, allowing the re-convened arbitration to go forward would violate
public policy by interfering with a judicially confirmed arbitration award. The Fort
Worth Court of Appeals decision in Diamond Offshore Co. v. Hall demonstrates
that the 2006 Final Arbitration Award was, in fact, confirmed. See No. 02-06-272-
CV, 2007 WL 1441011, at *2-5 (Tex. App.Fort Worth May 17, 2007, pet.
denied) (mem. op.). In that case, the parties agreed to arbitrate a Jones Act claim
for personal injuries. Id. at *1. The parties further agreed there would be no appeal
of any award by the arbitrator. Id. After the arbitrator awarded $2 million in
damages, the defendants paid the award, and the plaintiff dismissed his claims with
prejudice. Id. The final judgment rendered on April 8, 2004 stated:
[The parties] have informed the Court that the binding
arbitration in this matter has been concluded, the arbitration award
entered, and said arbitration award fully satisfied by [Appellants]; and
the parties having agreed to the entry of a Final Judgment, and it
appearing to the Court that this Agreed Take Nothing Final Judgment
should be made as prayed; it is therefore ORDERED, ADJUDGED,
and DECREED that [Appellee] take nothing from [Appellants], and
that this action against them be dismissed with prejudice.
42
Id.
On February 1, 2005, the defendants filed an original petition to vacate the
award, alleging that they had discovered fraud in November 2004. Id. Specifically,
the defendants claimed that part of the arbitrators award was for future in-home
attendant care and mobility assistance, and that plaintiff represented to the
arbitrator that he was totally disabled. Id. Surveillance photographs obtained in
November 2004 showed, however, that that the arbitrators conclusions that
[plaintiff] requires in-home attendant care and is unable to drive [were] erroneous.
Id. at *4. The plaintiff moved to dismiss based on lack of subject-matter
jurisdiction, and the trial court granted the motion. Id. at *1.
The Fort Worth Court held that the trial court lacked subject-matter
jurisdiction because the judgment had been confirmed prior to the defendants
motion to vacate. Id. at *2-5. Initially, the court determined whether the award had
been confirmed. Id. at *2. The defendants alleged that no confirmation had been
ordered because plaintiff had never moved for confirmation but instead, the parties
merely submitted an agreed, final take-nothing judgment. Id. at *3. The court
rejected this analysis, holding that by obtaining approval of the award by the trial
court through the judgment dismissing the claims, the award was confirmed. Id. at
*3 (However, upon reviewing the record, although Appellee never filed a motion
to confirm the award, we conclude that the language used by the trial court in its
final judgment was tantamount to an order granting confirmation.).
43
In reaching its conclusion, the court first noted that the TAA does not
expressly define confirmation, but in essence, confirmation is the act of giving
formal approval. Id. (quoting BLACKS LAW DICTIONARY 318 (8th ed. 2004)).
8

The court further stated that confirmation is simply a method to enforce an
arbitration award. Id. (citing Crossmark, 124 S.W.3d at 429 n.5). The court also
analyzed the language of the final judgment, concluding that while the judgment
did not expressly confirm the exact language of the arbitrators award, the
language used was the equivalent of an order confirming the awardthe trial court
formally approved the agreement made between the parties, i.e., payment of the
award by [defendants] in exchange for a full release by [plaintiff] and dismissal of
his suit with prejudice, and then granted dismissal of [plaintiffs] underlying suit
with prejudice. Id.
Second, the Diamond Offshore court disagreed with the defendants
argument that confirmation could not occur without an express motion to confirm
the award. Id. The court noted that while the TAA specifically provides that an
application is heard in the same manner and on the same notice as a motion in a
civil case, the purpose behind that provision is to expedite judicial treatment of
matters pertaining to arbitration. Id. (citing TEX. CIV. PRAC. & REM. CODE

8
A confirmation makes something firm or certain, or gives new assurances of truth or
certainty; it may also complete or establish something which was imperfect or uncertain, or remove
past doubts Hartwig Transit, Inc. v. Menolascino, 446 N.E.2d 1193, 1197 (Ill. Ct. App. 1st Dist.
1983) (citing BLACK'S LAW DICTIONARY, 270 (5th ed. 1979)).
44
171.093; TEX. R. CIV. P. 21; Crossmark, 124 S.W.3d at 430). While an
application to confirm should be decided as other motions in civil cases, i.e., on
notice and an evidentiary hearing if necessary, the parties could choose to bypass
that route. Id. The court held that there was no need to hold an evidentiary hearing
on whether the award should be confirmed when [defendants] had already paid the
award; and by paying the award, [defendants] essentially waived the necessity of
Appellee filing an application to confirm. See id.
The court concluded its confirmation analysis by referencing the
presumption in favor of arbitration and the finality of proceedings. Id. at *4.
Given that Texas law favors arbitration, that an arbitration award has the same
effect as the judgment of a court of last resort, that all reasonable presumptions are
indulged in favor of the award, and that the award is conclusive on the parties as to
all matters of fact and law, we conclude that on the facts here, the order dismissing
[plaintiffs] suit with prejudice constituted a confirmation as well as a final
judgment. Id. (citing Pheng Invs., Inc. v. Rodriguez, 196 S.W.3d 322, 328 (Tex.
App.Fort Worth 2006, no pet.) (op. on rehg)).
From a confirmation standpoint, this case could not be more similar to
Diamond Offshore. Here, as in that case, the Final Arbitration Award was
confirmed and the action dismissed by the 298
th
District Court. Although the
parties did not file a formal motion to confirm the Award, SCA waived that
requirement by consenting to the agreed order distributing the funds in the 298
th

45
District Courts registry and by taking no action to reopen the case within the
thirty-day period stated in the courts order abating and administratively closing
the case. Formal confirmation proceedings were not only unnecessary, but
nonsensical for an award which, by its own terms, could never be challenged,
appealed or attempt(ed) to be set aside and was fully consummated by the parties.
The 298
th
District Court formally approved the Final Award. To constitute
confirmation, there only need be some indication that the trial court gave formal
approval of the Award. Diamond Offshore Co., 2007 WL 1441011, at *3. This
formal approval includes the use of any methods to enforce the arbitration
award. Id. Even if the language of the order does not expressly confirm the award,
if its effect is to carry out the terms and enforce the arbitration award, it is
sufficient. Id. In fact, after confirmation, a court is required to enter judgment on
the award, which includes ordering any necessary disbursements. TEX. CIV. PRAC.
& REM. CODE 171.092(b). There is no doubt that occurred here.
By granting the parties agreed request to issue an order releasing SCAs
deposited funds to Tailwind, the 298
th
District Court approved and enforced the
Final Arbitration Award. Early on in the prior litigation, SCA deposited funds into
the 298
th
District Courts registry, which were only to be released upon conclusion
of the arbitration. See MR 228-29, 1004-05. If Tailwind prevailed, it was entitled
to the money, and vice versa with respect to SCA. See id. After the Settlement and
rendition of the Final Arbitration Award, the parties filed a joint, agreed order to
46
release the funds in the courts registry to Tailwind, signaling to the 298
th
District
Court that the arbitration had concluded with Tailwind as the victorious party. See
id.; MR 185. The agreed order, therefore, asked the 298
th
District Court to
approve and effectuate the Final Arbitration Award by releasing the funds to
Tailwind instead of SCA, including an express finding by the 298
th
District Court
that the release of the funds is appropriate. MR 185. In other words, the parties
jointly asked the 298
th
District Court to enforce the Award, which constituted an
order confirming the Award and a judgment thereon. Diamond Offshore Co., 2007
WL 1441011, at *3. In fact, there were no pending claims in the court at that time,
and the disbursement of the funds resolved all pending issues in the 298
th
District
Court and constituted a final judgment. See Lehmann v. HarCon Corp., 39
S.W.3d 191, 19293 (Tex. 2001) (holding a judgment is final if and only if either
it actually disposes of all claims and parties then before the court, regardless of its
language, or it states with unmistakable clarity that it is a final judgment as to all
claims and all parties.); cf. Bison Bldg. Materials, Ltd. v. Aldridge, No. 06-1084,
2012 WL 3870493, at *3 (Tex. Aug. 17, 2012) (holding order that confirmed in
part and vacated in part an arbitration award was not final because the court
recognized there were disputed fact issue that required resolution). SCA has not
and could not point to a single issue that remained pending in the 298
th
District
Court after the order disbursing the funds.
47
D. The Arbitrators Have No Inherent Power to Sanction Relators
Seven Years After the Award Became Final
There simply is no inherent power that can support the arbitrators ability
to sanction or order disgorgement of the award at this late stage. The doctrine of
functus officio and common sense mandates that arbitration must, at some point,
come to a conclusion. Otherwise, a party could never settle an arbitration and rely
on its finalityunder SCAs theory, an arbitration would never end.
Arbitrators exhaust their power when they make a final determination on
the matters submitted to them. They have no power after having made an award to
alter it; the authority conferred on them is then at an end. Bayne v. Morris, 68
U.S. (1 Wall.) 97, 99, 17 L. Ed. 495 (1863). This common-law doctrine is known
as functus officioa task performed. See Brown v. Witco Corp., 340 F.3d 209,
218-19 (5th Cir. 2003); see also Green v. Ameritech Corp., 200 F.3d 967, 976-77
(6th Cir. 2000) (defining term as [h]aving fulfilled the function, discharged the
office, or accomplished the purpose, and therefore of no further force or
authority (quoting BLACKS LAW DICTIONARY 673 (6th ed. 1990)); Denver City
Energy Assocs., L.P. v. Golden Spread Elec. Co-op., Inc., 340 S.W.3d 538, 544 n.6
(Tex. App.Amarillo 2011, no pet.) (Under the common law, [a]rbitrators
complete their function and lose their authority to act after making a final
48
determination on a matter.) (citation and internal quotations omitted).
9
A major
purpose of the doctrine is to protect the finality of an arbitrators decision. See
Anderman/Smith Operating Co. v. Tenn. Gas Pipeline Co., 918 F.2d 1215, 1220
n.4 (5th Cir. 1990).
10

Here, the arbitration panel unquestionably completed its task when it
rendered the Final Arbitration Award based on the Settlement Agreement. See MR
808-818. Thus, reconvening the arbitration as SCA requested was improper
under the functus officio doctrine and exceeded the arbitrators authority. See also
TEX. CIV. PRAC. & REM. CODE 171.054 (setting out limited circumstances under
which arbitrators may modify or correct awards); MR 832 (concluding that,
consistent with functus officio doctrine, TAA Section 171.088 grants courts, not
arbitrators, authority to vacate arbitration awards).
This conclusion is especially true with respect to sanctionsthe primary
relief SCA has requested from the arbitrators. See MR 769-70. All of the conduct
asserted to support the sanctions request occurred during the original arbitration

9
Neither Texas courts nor the Fifth Circuit have addressed the functus officio doctrine in detail.
See Brown v. Witco Corp., 340 F.3d 209, 218 (5th Cir. 2003). However, other circuits have
addressed the doctrine at length, and the Fifth Circuit has found their view of the doctrine
persuasive. Id.
10
The doctrine has some exceptions, none of which apply here. An arbitrator can (1) correct a
mistake which is apparent on the face of his award; (2) decide an issue which has been submitted
but which has not been completely adjudicated by the original award; or (3) clarify or construe an
arbitration award that seems complete but proves to be ambiguous in its scope and
implementation. Brown, 340 F.3d at 219.
49
proceedings. See id. To be sure, the arbitrators were permitted to police the
arbitration process and fashion appropriate remedies to effectuate their authority
while the original arbitration was ongoing, Hamstein Cumberland Music Grp.,
2013 WL 3227536, at *4, but that power came to an end when the arbitration
concluded. The functus officio doctrine precludes reopening an arbitration more
than seven years after rendition of the final award to mete out sanctions or for any
purpose outside one of the doctrines recognized exceptions, particularly when, as
here, the arbitration concluded through a settlement agreement disclaiming
reliance on any representation of any kind or character not expressly stated in the
agreement. Exhibit B 3.1(e).
The Fifth Circuits decision in Positive Software Solutions, Inc. v. New
Century Mortgage Corp.on which SCA heavily relied to support reopening the
arbitrationdoes not support the majoritys decision to assert jurisdiction. In that
case, the parties settled their dispute after an arbitrator issued an award and the
case had wound its way through several court proceedings. See 619 F.3d 458, 459-
60 (5th Cir. 2010). In citing Positive Software to the arbitrators, SCA failed to note
two key distinctions. First, the Court noted that both parties agree that their
contract gave the arbitrator authority to sanction Camia for bad-faith conduct. Id.
at 462. Second, the Fifth Circuit relied on specific American Arbitration
Association (AAA) rules authorizing (1) the reopening of an arbitration hearing
at any time before the award is made and (2) extensions of time based on good
50
cause. See id. at 463 (citing American Arbitration Association, Commercial
Arbitration Rule 36, 38 (2009)). A prior opinion makes clear that the parties
conducted the arbitration through AAA. See Positive Software Solutions, Inc. v.
New Century Mortg. Corp., 476 F.3d 278, 279 (5th Cir. 2007).
Positive Software is distinguishable because even the AAA ruleswhich do
not apply to this casespecifically limit the reopening of an arbitration to the
time before the award is made, an event that at this point occurred eight years
ago. Indeed, the current rules of procedure issued by major arbitration associations,
both domestic and international, do not recognize a never-ending right to review
prior final decisions. Instead, as the rules uniformly provide, an arbitrator may not
reopen an arbitration hearing after it makes an award. See AAA, Commercial
Arbitration Rules 36, 46 (2009); AAA, International Arbitration Article 24 (2010);
JAMS, Comprehensive Arbitration Rules & Procedures (CARP) Rule 22(i)
(2010). Once transmitted or served, an award is final and may only be modified
in a short, prescribed time periodto correct computational, typographical, or
other similar errors. See AAA, Commercial Arbitration Rule 46; AAA,
International Arbitration Article 30; JAMS, CARP Rule 24(j) & (k)).
Despite SCAs contrary suggestion, the Positive Software court did not hold
that arbitrators have the power to reopen proceedings years after the fact to
consider sanctions requests based on conduct during arbitration. Rather, the Fifth
Circuit merely pointed out some potential options in response to Positive
51
Softwares complaint that it lacked any means to address the supposed
wrongdoing. Positive Software, 619 F.3d at 462-63. The functus officio doctrine
never came into play because Positive Software never sought sanctions from the
arbitrators, but instead asked the district court to order them based on its inherent
authority after the case was administratively closed. See id. at 460-63.
The two-arbitrator majoritys reliance on Lehigh Valley Railroad Co. v.
Germany, an international arbitration from the 1930s, is likewise misplaced. Here,
the majority found that the Lehigh cases support arbitrator jurisdiction because of
certain parallels between that tribunal, and this one . . . . MR 825. Namely:
Both arbitrations involve awards allegedly procured by a fraud
upon the tribunal that remained unknown and unknowable for many
years. Each tribunal was specifically created to address future disputes
which the parties reasonably expected would have to be determined
after agreement of an armistice. The [Compromise Settlement
Agreement] and original consent Award were merely the private
equivalent of a temporary cease-fire. Hostilities between these
parties resumed and continued as anticipated albeit at varying
intensity. The resumption of hostilities in the instant case simply
resumed in five years rather than the nine years in Lehigh, supra. The
ability of both tribunals to address and determine disputes within the
parameters of the parties' agreements is unquestioned.
Id.
The Lehigh cases provide no support for reconvening this arbitration going
on a decade after its conclusion by settlement and final confirmation of the award.
First, any remedy for alleged fraud upon the tribunal lies in the courts, not in a
re-convened arbitration. See TEX. CIV. PRAC. & REM. CODE 171.088(a)
52
(providing for vacatur of arbitration award obtained by corruption, fraud, or other
undue means). The two-arbitrator majority cited no authorityand there is
nonethat an arbitration panel may take matters into its own hands years after the
fact to remedy any alleged fraud.
Second, the Compromise Settlement Agreement, while it contained an
arbitration clause, was hardly a temporary cease-fire between the parties. To the
contrary, the Agreement fully and finally resolved any disputes then existing and
resulted in an agreed Final Arbitration Award. See MR 808-18. Although disputes
regarding performance or enforcement of the agreement might arise, the notion
that the Compromise Settlement Agreement was nothing more than a short-term
solution to a larger problem is an absurd, result-oriented justification for expanding
the arbitration panels power in a manner the parties plainly did not contemplate
when they entered into the settlement and agreed Final Arbitration Award.
Moreover, the Lehigh decisions simply do not apply to expand arbitrator
jurisdiction in the manner the majority held. Those decisions were rendered by a
commission created for the purpose of resolving reparations claims against
Germany due to acts of sabotage against American citizens, as required by the
Treaty of Berlin and an agreement between the United States and Germany dated
August 10, 1922. This agreement created the Mixed Claims Commission, which
consisted of one commissioner appointed by the United States, one appointed by
Germany, and an umpire.
53
Lehigh was no ordinary arbitrationit was one between two governments
by a long-standing commission appointed to decide numerous cases between the
two governments at an extremely precarious point in our nations history. But most
importantly, the procedural history of the Lehigh cases ultimately shows that the
rules and procedures applicable to the Commission gave express authority to the
Commission to reopen a case, without any time limit. Neither SCA nor the two-
arbitrator majority has pointed to any provision bestowing similar power on the
panel that heard the original dispute in 2005 and 2006. The dissenting arbitrator
recognized as much, concluding that SCA . . . failed to identify a similar
procedural rule applicable to this case that provides for re-opening of this
arbitration. MR 832.
Even if the Court were to consider this complicated and outdated group of
decisions as precedent, it is clearly distinguishable, most notably because the
arbitrators in the instant case were not induced to render any award based on
anything other than the parties own Compromise Settlement Agreement, which
itself was reached at arms length, with competent counsel, and with no party
relying on anything any other party did or said. Litigation must end at some point.
And in this case it didwith a settlement and award that is and must be binding
and cannot now be disturbed.
The dissenting arbitrator correctly concluded that the common law doctrine
of functus officio precludes this Tribunal from having jurisdiction to effectively
54
vacat[e] and re-decid[e] its 2006 Final Award and that no exceptions apply. See
MR 832. Unfortunately, the other two arbitrators disagreed, and a hearing to
determine a new award is imminent. This Courts intervention is both necessary
and appropriate to prevent the unprecedented and highly inappropriate exercise of
power that no agreement, statute, or rule has bestowed upon the arbitration panel.
VII. Nothing in the Compromise Settlement Agreement Empowers the
Arbitrators to Rule on the Legal Effect, If Any, of USADAs Reasoned
Decision
As separate support for the second claim being presented for arbitration,
SCA alleges that USADA ordered that Armstrong forfeit all prize money earned in
connection with his vacated racing titles. See MR 633, 647. This allegation is
factually incorrect and, in any event, does not trigger an obligation to arbitrate any
more than SCAs request for sanctions.
To the extent SCA is referring to the Reasoned Decision USADA issued
in the fall of 2012, that document does not support any forfeiture claim by SCA.
See Reasoned Decision of the U.S. Anti-Doping Agency on Disqualification and
Ineligibility, October 10, 2012, available at http://cyclinginvestigation.usada.org
(appearing in part at MR 909-22).
11
USADA found that Armstrong violated the
applicable anti-doping rules, that his competitive results achieved since August 1,
1998 should be, and are, disqualified and that he is properly and appropriately

11
This document is voluminous, but is readily accessible over the Internet. To the extent
necessary, Relators ask the Court to take judicial notice of it. See TEX. R. EVID. 201(b).
55
ruled ineligible for life pursuant to the terms of Article 10.10.1 of the World Anti-
Doping Code. MR 924. Contrary to SCAs assertions, the Reasoned Decision
says nothing about forfeiting either prize money or, in this case, employment
compensation paid by Armstrongs employer (by definition, the sums at issue are
not prize money which is awarded by the sponsors of sporting events), nor does
it specify who any such forfeiture would benefit. Thus, a forfeiture request based
on a USADA publication adds nothing to the arbitrability debate not already
addressed as sanctions.
The payments SCA made were settlement proceeds or insurance proceeds
they cannot reasonably be described as prize money. In any event, a claim for
forfeiture of prize money does not fall within the scope of the Compromise
Settlement Agreements arbitration clause. The fact that SCA regrets settling the
case and wants its money backand wants to punish Relators for perceived
transgressionsdoes not make this dispute arbitrable.
VIII. Relators Lack an Adequate Remedy at Law
Relators seek review of the denial of their motion to stay the arbitration.
Under Texas Civil Practice and Remedies Code section 171.098(a)(2), an
interlocutory appeal is available if the trial court grants an application to stay an
arbitration, but not if the application is denied. TEX. CIV. PRAC. & REM. CODE
171.098(a)(2). Although the lack of a valid arbitration agreement can be raised in
a motion to vacate an arbitration award if the party seeking to vacate the award did
56
not participate in the arbitration without objection, vacatur on this ground is not
available if the party challenged the existence of an arbitration clause through a
motion to stay arbitration. Id. 171.088(a)(4); Holcim (Tex.) Ltd. Pship, 211
S.W.3d at 803 (interpreting section 171.088(a)(4) as meaning that if a party
chooses to file a stay application and the court finds that there is an agreement to
arbitrate, then that party cannot later raise the lack of an arbitration agreement as a
ground to vacate an arbitration award.). Accordingly, Relators in this case have no
remedy by appeal, much less an adequate remedy, and could be subject to an
arbitration to which they never agreed.
More importantly, however, Relators will lose the benefit of the
Compromise Settlement Agreements provisions disclaiming the right to set aside,
challenge, or otherwise appeal the Final Arbitration Award issued pursuant to that
Agreement.
12
Relators further stand to lose the substantial rights negotiated for in
resolving the prior arbitration, including the bargained-for exchange in the
Compromise Settlement Agreement.
Finally, the judicial system suffers because the finality of a settled,
confirmed arbitration award will be compromised, leading to needless litigation
(such as the instant case and any further proceedings if the arbitration is allowed to

12
As noted above, Relators are filing a concurrent interlocutory appeal to preserve their right to
assert that the Partial Final Award on Jurisdiction was implicitly confirmed and is therefore
appealable under TAA section 171.098(a)(3).
57
go forward), and the Legislatures purpose in enacting timelines and procedures for
vacating an arbitration award will be thwarted, along with the public policy
favoring finality of arbitration proceedings. See Part VI.C., supra. As the Fifth
Circuit held in Positive Software, arbitration is not an annex to litigation, but an
alternative method for dispute resolution. Treating arbitration as if it were an
appendage to adjudication is a mistake that would undermine the very purpose of
arbitrationthe provision of a relatively quick, efficient, and informal means of
private dispute settlement. 619 F.3d at 461 (emphasis in original; internal
quotations omitted). In Positive Software, the Fifth Circuit held that seeking
sanctions in the arbitration was not using arbitration as an annex to litigation
because the parties agreed that the arbitrators had the authority to sanction for bad
faith conduct, and therefore the court lacked inherent authority to sanction because
it should not seize control over substantive aspects of arbitration. See id. at 462.
Here, by contrast, SCA attempts to use the reconvened arbitration as an improper
annex to litigation. This is shown by the fact that (1) SCA first sought relief
through the court by requesting to vacate the prior arbitration, but switched gears
when it appeared that this efforts was barred by the TAA; and (2) courts have
exclusive jurisdiction over motions to vacate an arbitration award per TAA section
171.088. SCA is thus using the arbitrators as a vehicle for an improper collateral
attack to determine whether the Final Arbitration Award should be vacateda
question that, by statute, is solely for the courts. See Yazdchi v. Am. Arbitration
58
Assn, No. 01-04-00149-CV, 2005 WL 375288, at *4 (Tex. App.Houston [1st
Dist.] 2005, no pet) (Section 171.088 provides the exclusive remedy to contest an
arbitration award when the Texas Arbitration Act governs . . . .).
Arbitration is intended as an efficient, low-cost, expeditious method of
resolving disputes. See In re Olshan Found. Repair Co., 328 S.W.3d 883, 893
(Tex. 2010) ([W]e also recognize that arbitration is intended as a lower cost,
efficient alternative to litigation); Jack B. Anglin Co. v. Tipps, 842 S.W.2d 266,
268 & n. 3, 269 (Tex. 1992) ( [T]he main benefits of arbitration lie in expedited
and less expensive disposition of a dispute). The TAAs provisions for vacating
an award, including strict timelines, express a legislative intent to provide a quick
and simple method for resolving disputes. Cambridge Legacy Group v. Jain, 407
S.W.3d 443, 447 (Tex. App.Dallas 2013, pet. denied) (Judicial review of an
arbitration award adds expense and delay and thereby diminishes the benefits of
arbitration as an efficient, economical system for resolving disputes.) (citing CVN
Group, Inc. v. Delgado, 95 S.W.3d 234, 238 (Tex. 2002)). When the Legislature
expressly provides for an efficient means for resolving a particular dispute,
expressing that public policy through legislative enactment, and a trial courts
order thwarts that legislative policy, the relator has no adequate remedy by appeal.
In re Collins, 286 S.W.3d 911, 920 (Tex. 2009) (citing In re McAllen Med. Ctr.,
275 S.W.3d at 469). The trial courts refusal to stay the pending arbitration,
thereby undermining the validity of a confirmed, final arbitration award rendered
59
pursuant to a settlement agreement, thwarts the legislative intent to provide an
efficient, and final, method of resolving disputes. Tailwind and Armstrong,
therefore, are entitled to mandamus relief.
CONCLUSION AND PRAYER
For these reasons, Relators jointly ask the Court to set this matter for oral
argument; issue a writ of mandamus directing the trial court to vacate its February
25, 2014 order and instead stay the pending arbitration; and grant them all other
appropriate relief to which they are entitled.
Respectfully submitted,
/s/ D. Todd Smith
Timothy J. Herman
State Bar No. 09513700
therman@howrybreen.com
Sean E. Breen
State Bar No. 00783715
sbreen@howrybreen.com
HOWRY BREEN & HERMAN, L.L.P.
1900 Pearl Street
Austin, Texas 78705
(512) 474-7300
(512) 474-8557 (fax)

Michael K. Hurst
State Bar No.10316310
mhurst@ghjhlaw.com
A. Shonn Brown
State Bar No. 24007164
sbrown@ghjhlaw.com
GRUBER HURST JOHANSEN HAIL SHANK
1445 Ross Ave., Suite 2500
Dallas, Texas 75202
(214) 855-6800
(214) 855-6808 (fax)
60

D. Todd Smith
State Bar No. 00797451
todd@appealsplus.com
Brandy M. Wingate
State Bar No. 24037046
brandy@appealsplus.com
SMITH LAW GROUP, P.C.
1250 Capital of Texas Highway South
Three Cielo Center, Suite 601
Austin, Texas 78746
(512) 439-3230
(512) 439-3232 (fax)

Counsel for Relators, Tailwind Sports
Corp. and Lance Armstrong

RECORD CERTIFICATION
By my signature below, I certify that I have reviewed the foregoing petition
and concluded that every factual statement in the petition is supported by
competent evidence included in the mandamus record.
/s/ D. Todd Smith
D. Todd Smith

61
CERTIFICATE OF COMPLIANCE
This document complies with the typeface requirements of Texas Rule of
Appellate Procedure 9.4(e) because it has been prepared in a conventional typeface
no smaller than 14-point for text and 12-point for footnotes. This document also
complies with the word-count limitations of Rule 9.4(i), if applicable, because it
contains 13,509 words, excluding any parts exempted by Rule 9.4(i)(1).
/s/ D. Todd Smith
D. Todd Smith
CERTIFICATE OF SERVICE
On March 3, 2014, in compliance with Texas Rule of Appellate Procedure
9.5, I served this document by e-service, e-mail, facsimile, or mail to the
following:
Hon. Tonya Parker
116TH JUDICIAL DISTRICT COURT
George L. Allen, Sr. Courts Building
600 Commerce Street, Box 640
Dallas, Texas 75202
Respondent

Jeffrey M. Tillotson
LYNN TILLOTSON PINKER & COX, L.L.P.
2100 Ross Avenue, Suite 2700
Dallas Texas 75201
Counsel for Real Party in Interest
SCA Promotions, Inc.

/s/ D. Todd Smith
D. Todd Smith
NO. _____________

In the Fifth Court of Appeals
Dallas, Texas


I N RE TAILWIND SPORTS, INC. AND LANCE ARMSTRONG
Relators

ORIGINAL PROCEEDING FROM CAUSE NO. DC-13-01564
116TH JUDICIAL DISTRICT COURT OF DALLAS COUNTY, TEXAS
HON. TONYA PARKER PRESIDING
APPENDIX TO RELATORS PETITION
FOR WRIT OF MANDAMUS
Compromise Settlement Agreement ..................................................................Tab A
Final Arbitration Award ..................................................................................... Tab B
Partial Final Award on Jurisdiction ................................................................... Tab C
Concurrence in Part and Dissent from Partial Final Award on Jurisdiction .....Tab D
Order Denying Motions to Stay Arbitration ..................................................... Tab E
TEX. CIV. PRAC. & REM. CODE 171.023 .......................................................... Tab F
STATE OF TEXAS
COUNTY OF TRAVIS



BEFORE ME, the undersigned authority, personally appeared Timothy J.
Herman, being by me duly sworn, on his oath deposed and stated the following:
1. "My name is Timothy J. Herman. I am over eighteen (18) years of age. I am
an attorney licensed by the Supreme Court of Texas to practice law in the
state of Texas, and I am a partner in the law firm of HOWRY BREEN &
HERMAN, L.L.P. in Austin, Texas. I have never been convicted of a felony,
and I suffer from no legal disabilities. I am fully competent and duly
qualified to make this certification regarding Relators' Petition for Writ of
Mandamus and Mandamus Record."
2. "I am lead trial counsel for Lance Armstrong and Tailwind Sports Corp.,
who are the Relators in this original proceeding and Defendants in cause
number DC13-01564 in the 116th Judicial District Court of Travis County,
Texas. The documents included in the Mandamus Record, Bates-stamped
MRI to MR 1516, are true and correct copies of the originals or otherwise
are properly authenticated. The documents included behind Tabs A through
E of the Appendix are likewise true and correct copies of the originals or
otherwise are properly authenticated."
Further affiant sayeth not.
Timothy J. Herman
SWORN TO AND SUBSCRIBED before me on March 3, 2014, by Timothy J.
Herman, to certify which, witness my hand and official seal.
~ l /-dY"--
Notary Public in and for the State of Texas
RONI LEA WILSON
MY COMMISSION EXPIRES
August 14, 2014
COMPROMISE SETTLEMENT AGREEMENT
This Compromise Settlement Agreement is made and entered into by and bet\:veen
Tailwind Sports Corp. and Lance Armstrong (hereinafter referred to collectively as the
"Claimants"), on the one hand, and SCA Promotions, Inc. and SCA Insurance Specialists, Inc.
(Respondents), on the other, as of the dates appearing on the signatures below. The terms of
this Compromise Settlement Agreement are as follows:
1. Parties
The parties to this Compromise Settlement Agreement, \:vhich are sometimes collectively
referred to herein as the "parties," are the Claimants and Respondents, as defined above.
1.1 The "CONS ID ERA TION" which is given by Respondents means and consists of
the payment of $7,500,000.00 (Seven Million, Five Hundred Thousand and no/100 Dollars) by
Respondents to Tailwind, as specified below, as well as the acknowledgments, ratifications and
other promises also specified in this Agreement, including as follows:
a. The release and assignment to Tailwind of all funds presently held in the
registry of the 29gth Judicial District Court of Dallas County, Texas in
Cause No. 04-9557, on or before February 9, 2006;
b. $500,000.00, plus accrued interest at the rate of 6% per annum, on or
before April 10, 2006;
c. $2,000,000.00, plus accrued interest at the rate of 6% per annum, on or
before February I 0, 2007;
d. The sums described in (b) and ( c) hereof shall be secured by: (1) the
provision of Letter(s) of Credit issued by a national banking association
conditioned only upon presentment of a demand by Claimants in the
amount of $500,000.00, plus accrued interest, on or after April 10, 2006;
and presentment of a demand in the amount of $2,000,000.00, plus
accrued interest, on or after February 10, 2007; or (2) perfonnance bond(s)
issued by a surety or insurer acceptable to Claimants, which performance
bond(s) shall be subject to Claimants' approval and acceptance, but such
approval and acceptance by Claimants may not be unreasonably withheld.
MR 672
Tab A
e. The sums described in (b) and (c) are unconditionally due as and when
specified. Under no circumstances may such sums, or any portion thereof,
be withheld or offset by Respondents, regardless of the circumstances or
any claim made by Respondents, including any claims by Respondents
that Claimants have breached this Agreement in any way. Any and all
such other claims by either Respondent against any Claimant, must, if
pursued, be pursued independently and any such claim may not be the
basis for either Respondent to encumber or withhold any sum due under
this Agreement.
f. An Arbitration Award, signed by all three Arbitrators, ordering
Respondents to pay to Claimants the sum of $7,500,000.00, shall be
entered on or before February 9, 2006.
g. No party may challenge, appeal or attempt to set aside the Arbitration
Award.
h. By February 9, 2006, Respondents shall cause the North Carolina lawsuit
against CSE, William Stapleton and Street & Smith to be dismissed with
prejudice; and CSE and Stapleton shall not assert any claims against
Respondents as a result of the filing of such claims.
2. Indemnity
2.1 The Respondents agree to INDEMNIFY and to DEFEND and to HOLD
HARMLESS Claimants from any claims asserted by third parties, together with all costs,
expenses, and legal fees in defending such claims that may be asserted against Claimants
that relate to the release or provision of any documents, information or testimony related
to this arbitration by Respondents.
2.2 The Claimants agree to INDEMNIFY and to DEFEND and to HOLD
HARMLESS Respondents from claims asserted by third parties, together with all costs,
expenses, and legal fees in defending such claims, that may be asserted against
Respondents related to the release or provision of any documents, information or
testimony related to this arbitration by Claimants.
2.3 The indemnity obligations set forth in Paragraphs 2.1 and 2.2 shall not extend to
2
MR 673
any claim or disciplinary action asserted by a regulatory body against a Claimant.
3. Representations and Warranties
3.1 In return for the CONSIDERATION, THE PARTIES represent and warrant the
following to each other:
a. THE PAR TIES are correctly described m this SETTLEMENT
AGREEMENT;
b. Before executing this SETTLEMENT AGREEMENT, THE PARTIES
became fully informed of the terms, contents, conditions, and effect of this
AGREEMENT, and received independent legal counsel and advice before
agreeing to the terms of this AGREEMENT;
c. THE PARTIES are fully authorized and legally competent to execute this
SETTLEMENT AGREEMENT;
d. This SETTLEMENT AGREEMENT is fully and forever binding on THE
PARTIES, and their heirs, executors, administrators, successors and
assigns;
e. No promise or representation of any kind has been made to any Party or to
anyone acting for a Party, except as is expressly stated in this
SETTLEMENT AGREEMENT, and THE PARTIES execute this
SETTLEMENT AGREEMENT without reliance on any representation of
any kind or character not expressly stated in this SETTLEMENT
AGREEMENT;
f. In entering this SETTLEMENT AGREEMENT, THE PARTIES enter this
SETTLEMENT AGREEMENT freely, by THE PARTIES' ovvn choice
and judgment, and without duress or other influence; and
g. THE PARTIES recognize that the recitations contained in this
SETTLEMENT AGREEMENT are contractual and not mere recitals.
4. Confidentiality
4.1 The terms of this SETTLEMENT AGREEMENT shall be kept
CONFIDENTIAL unless otherwise required in response to any request for information in any
judicial proceeding in which the Claimants and/or Respondents are parties, or pursuant to
subpoena or other Court order. In the event any Party or their authorized representatives, or any
3
MR 674
of their employees, representatives, or attorneys, receives an order or other court process to be
furnished with this SETTLEMENT AGREEMENT or any of the information or terms of this
SETTLEMENT AGREEMENT, said Party and/or their representatives shall notify all
signatories as soon as possible after the receipt of such order, process, or demand and within a
reasonable time prior to furnishing the information. Notice of such a request or order should
stipulate the time period within which the Party must respond to the request. Notwithstanding
this agreement of confidentiality, any Party may disclose the terms to their spouse, accountants,
attorneys, subsidiaries, lenders, assigns, and successors, who shall agree to keep such
information confidential.
4.2 Claimants and their respective agents, representatives and employees shall be
released from the obligation of confidentiality upon the occurrence of either of the following:
a. Should any official, representative or employee of any regulatory body,
including, but not limited to, the World Anti Doping Agency, the United States Anti Doping
Agency, the UCI, the Tour de France and any affiliates or sponsors thereof, make public, directly
or indirectly, any testimony, statement, document or exhibit produced or introduced in
connection with the Arbitration proceeding; or
b. Should any testimony, statement, document or exhibit (or description
thereof) unfavorable to Lance Armstrong or Tailwind and which was produced or introduced in
connection with the Arbitration proceeding be published in any newspaper, magazine, television,
radio, internet site or other media.
c. Should Claimants exercise rights to disseminate information regarding the
Award and proceeding pursuant to the terms of Paragraph 4.2(a) or 4.2(b) above, Respondents
shall be released from the obligations of confidentiality as well.
4
MR 675
5. Miscellaneous
5.1 This SETTLEMENT AGREEMENT shall not be altered, amended, modified or
changed except in writing signed by all of the parties hereof.
5.2 THE PARTIES each acknowledge that this instrument constitutes the entire
agreement between them with respect to the matters being compromised and settled in this
SETTLEMENT AGREEMENT, and that this SETTLEMENT AGREEMENT supersedes any
and all prior agreements and understandings relating to the subject matter hereof.
5.3 Notwithstanding any provision in this SETTLEMENT AGREEMENT herein to
the apparent contrary, nothing herein contained is intended nor shall it be construed to create,
recognize, or ratify any third party beneficial rights, except as specifically noted herein.
5.4 THE PARTIES agree that the titles and/or headings used in this SETTLEMENT
AGREEMENT are for purposes of clarification only and should not be used in interpreting or
construing this SETTLEMENT AGREEMENT.
5.5 In the event that any one or more of the prov1s10ns contained in this
SETTLEMENT AGREEMENT shall be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any other provision hereof,
and this SETTLEMENT AGREEMENT shall be construed as if such invalid, illegal, or
unenforceable provision did not exist.
5.6 This SETTLEMENT AGREEMENT shall be governed by, construed, interpreted
and the rights of the parties determined in accordance with the laws of the State of Texas,
without regard to conflict of law principles thereof. The Arbitration Panel consisting of Richard
Faulkner, Richard Chernick and Ted Lyon shall have exclusive jurisdiction over the parties
hereto with respect to any dispute or controversy among them arising under or in connection
5
MR 676
witb. this SET'fLBMENT AGREEMENT or Contingent Pr.ize Contract #31122 and, by execution
and delivery of this SETTLEMENT AGREEMENT, each of the parties hereby submitcl to tbe
jurisdiction of that Panel and i's any objection to such jurisdiction on the grounds of vcnu e
or forum non conveniensa tbe absence of IN personam or subject matti::rr jurisdiction aod any
simHar grounds, consents to service of process by mail or any other manner pennitted by law,
and irrevocably agrees to be bound by any order or award isaucd or rendered thereby ill
connection with this SETTLEMENT AGREEMENT.
EXECUTED in multiple originals, each of equal dignity, on the dates as noted below
1
to
be effective ElS of the Closing Date, February 1__, 2006.
SCA PROM0110NS, INC.

R '7 -< .,.. i- r;) ""'1ft'I. a !11
by:
Its: f'tz. c:: :!> " 1:;;.C A/-'/

SCA INSURANCE SPECIALISTS, INC.
by:

IJ... 17) 'i'" o. Jf., 111.m fF v
its: .I Ot:="ifl/T

6
MR 677
TAILWIND SPORTS CORP.
y ~
..
7
MR 678
IN THE MATTER OF:
LANCE ARMSTRONG and
TAILWIND SPORTS CORP..

Claimants,

~

SCA PROMOTIONS, INC. and HAMMAN
INSURANCE SERVICES, INC. d/b/a SCA
INSURANCE SPECIALISTS, INC.,

Respondents.
FINAL ARBITRATION AWARD
Having considered the evidence and testimony, the Arbitration Panel hereby ORDERS
SCA Promotions, Inc. and SCA Insurance Specialists, Inc. to pay Tailwind Sports Corp. and
Lance Armstrong the sum of Seven Million, Five Hundred Thousand Dollars ($7 ,500,000.00).
Signed this gtb day of February, 2006.
FINAL ARBITRATION A WARD
Page Solo
Ted Lyon
r u c ~ ; c k ___ __JL_
MR 680
Tab B
IN THE MA TIER OF AN ARBITRATION BETWEEN
LANCE ARMSTRONG and
TAILWIND SPORTS CORP.
Claimants,
v.
SCA PROMOTIONS, INC., ET AL.
Respondents.










ARBITRATION BEFORE THE
HONORABLE RICHARD
FAULKNER, RICHARD
CHERNICK AND TED LYON
PARIIAL FINAL AWARD ON JUR]SDICTION
These parties return to this Arbitratio11 Tribunal yet again to consider the parties' latest
disputes raised in SCA Promotions, Inc.'s ("SCN') Motion to Reconvene Arbitration and Request
for Sanctions and Forfeiture Against Claimants ("Motion"), Lance Armstrong ("Annstrong") and
Tailwind Sports Corp. (colleclively ''Claimants"). The Motion articulates multiple
assertions which presently center on effectively two issues: I) Does this Arbitration Tribunal have
jurisdiction to decide and resolve the existing disputes between these parties? and 2) If this
Tribunal has jurisdiction to hear the parties' disputes, who are the parties subject to that
jurisdiction?
The Arbitration Tribunal has heard Oral Argwnent on the Motion, received and
considered extensive briefing from the parties, directed the parties to provide supplemental
briefing analyzing particular jurisprudence, thoroughly reviewed all party submissions and the
applicable law. The Motion and issues are now appropriate for decision.
l. BACKGROUND
The history of the multiple disputes between these parties is to the
Arbitration Tribunal. The complicated reality is that this Tribunal was originally empanelled to
determine if SCA was required to honor the commitment it made to Claimants in the Contingent
Prize Contract 31122 ("CPC").
MR 685 Tab C
SCA denied liability asserting that Armstrong won using prohibited means. Claimants
strongly controverted that assertion. The Tribunal entertained extensive evidence at trial and was
prepared to rule. However, before this Tribunal rendered its own Final Award on the merits, the
parties privately resolved their disputes. Their agreement was memorialized in the private
Compromise Settlement Agreement ("CSA") and the public arbitration Award. The Award
provided for the payment of funds in the amount of $7,500,000.00 to Claimants. The CSA
addressed multiple additional issues. Most importantly, the CSA by its own tenns anticipated
future additional disputes could arise. The CSA affinnatively maintained the agreed arbitration
Tribunal by name, and granted the Tribunal exclusive jurisdiction to resolve any new disputes
arising Wlder or in coIUlection with the CSA and CPC. As provided for in the CSA, the parties
returned to this Tribunal to contest additional disputes after the public "consent" Award was
issued.
A. Return to Arbitration
After the first arbitration, questions continued concerning whether the various 'Tours de
France., were won fairly and within the rules by Armstrong. On two occasions after the entry of
the consent award, Armstrong and Tailwind sought relief from this panel for conduct of SCA
claimed to violate their rights. (App. 19-20; 276-289). Recently, Armstrong's status as the
"official" winner of the various "Tours de France," was revoked. Whether the process leading to
that revocation was consistent with due process or natural justice is not necessary for this Tribunal
to decide at present, nor are what, if any, remedies SCA may have available. After the
"revocation" SCA then proceeded to seek various relief in court and eventually returned again to
this Tribunal.
8. Ihe Issues Presented
The questions for determination are:
2
MR 686
1) Does this Arbitration Tribunal have jurisdiction to decide and resolve the existing
disputes between these parties; and
2) Who are the parties subject to any jurisdiction ofthis Tribunal.
C. CSA 4tbitraticlo.rovbion
The key for determination of these issues is the language of the arbitration provision of the
CSA which states:
"Th.is SETTLEMENT AGREEMENT shall be governed by, construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of Texas, without regard
to conflict of law principles thereof. The Arbitration Panel consisting of Richard Faulkner, Richard
Chernick and Ted Lyon shall have exclusive jurisdiction over the parties hereto with respect to any
dispute or controversy among them arising under or in connection with this SETTLEMENT
AGREEMENT or Contingent Prize Contract #31122 and, by execution and delivery of this
SETTLEMENT AGREEMENT, each of the parties hereby submits to the jurisdiction of that Panel
and waives any objection to such jurisdiction on the grounds of venue or forum non conveniens the
absence of in personam or subject matter jurisdiction and any similar grounds, consents to service
of process by mail or any other manner permitted by law, and irrevocably agrees to be bound by
any order or award issued or rendered thereby in connection with this SETTLEMENT
AGREEMENT." See CSA, p.5, 5.6.
D. Le2al
SCA asserts that the parties' agreements and the language of the CSA arbitration provision
establish the jurisdiction of this Tribunal to detennine the latest disputes between these parties to
the CSA and to the CPC. SCA also claims that the Tribunal has jurisdiction over Mr. William
Stapleton who executed the documents, though he was identified when doing so as acting in a
corporate capacity or as an agent of Armstrong.
J
MR 687
1. Purnorted Parties Before This Tribunal
The issue of which parties are properly before this Tribunal is in part easily disposed of.
The United States Supreme CoW1 has warned arbitration Tribunals that they are not common law
coW1S of general jurisdiction. Stolt-Nielson S.A. v. AnimalFeeds Int 'l Corp., 559 U.S. 662 (2010).
Arbitration tribunals only have jurisdiction of those parties and issues affirmatively delegated to
them. Stolt-Nielsen S. A. v. Anima/Feeds Int'/ Corp., 559 U.S. 662 (2010); AT&T Mobility LLC v.
Concepcion, 131 S. Ct. 1740 (2011). However, an arbitration tribunal's interpretation of party
agreements must be deferred to Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064 {2013). The
evidence clearly discloses that Mr. Stapleton acted in a disclosed capacity as a corporate officer or
as the authorized agent of Annstrong. In neither case did Mr. Stapleton agree to an.y jurisdiction of
this Tribunal over himself as an individual.
2. No Jurisdiction Over William Stapleton
The evidence and law do not provide any basis for this Tribunal to assert jurisdiction over
Mr. Stapleton. We express no opinion concerning what, if any, liability may be asserted against
him in any other forum.
3. Proper Parties Before This Tribunal
The documents in evidence before this Tribwial specify the parties agreeing to be parties to
the CSA and CPC. The listed parties are Tailwind Sports Corp.. Lance Annstrong, SCA
Promotions, Inc. and SCA Insurance Specialists, Inc. The evidence wiquestionably establishes that
those persons and entities agreed to arbitrate any disputes between them before this Tribunal.
II. BASIS FOR .nJRJSDICTION
SCA asserts multiple theories seeking remedies that could be perceived as attacking the
2006 Award. Claimants strongly dispute those assertions and rely heavily upon jurisprudence
regarding the doctrine of/unctus officio. We do not find that jurisprudence controlling.
MR 688
The facts and circwnstances of this case are unusual and distinct from virtually all of the
jurisprudence presented by Claimants and considered by the Tribwtal. The language of the CSA
was drafted to be interpreted by the Tribunal to address future disputes the parties perceived as
virtually inevitable. The acrimonious history of these parties mandated the creation of a private
mechanism for resolution of any additional disputes that could arise after publication of the
original Award. As anticipated) multiple disputes did arise, were brought before this Tribwtal and
resolved.
The facts clearly demonstrate that contrary to Claimants' current position, they
affirmatively asserted that this Tribunal had the authority and jurisdiction to sanction SCA after the
publication of the Award. SCA did not contest Claimants' right to proceed before this
Tribw1al. Notably, all of the parties agreed on interpreting the CSA as creating and maintaining the
jurisdiction and authority of this Tribunal to determine any disputes between the parties relating to
the CSA whenever those disputes might arise. Thus, the authority and jurisdiction of this Tribunal
is directly analogous to that of the tribwtal in Lehigh Valley Railroad Company v. Germany, 8
R.l.A.A. 84 (1930) (rehearing 8 R.l.A.A. 222 (1936)) (rehearing 8 R.l.A.A. 225 (1939)).
The parallels between that tribwtal, and this one, are many and manifest. Both arbitrations
involve awards allegedly procured by a fraud upon the tribunal that remained unknown and
unknowable for many years. Each tribwtal was specifically created to address future disputes
which the parties reasonably expected would have to be determined after agreement of an
armistice. The CSA and original consent Award were merely the private equivalent of a temporary
"cease.fire." Hostilities between these panies reswned and continued as anticipated albeit at
varying intensity. The resumption of hostilities in the instant case simply reswned in five years
rather than the rune years in Lehigh, supra. The ability of both tribwtals to address and determine
disputes within the parameters of the parties' agreements is wtquestioned.
5
MR 689
The facts of the parties' disputes reveal that they fit within the parties' agreements, the
language of the CPC and within the broad arbitration provision of the CSA. The characterization of
the remedies sought is not presently the issue. The latest disputes fall within the parties'
agreements, the CSA and CPC. The parties themselves confirmed that previously hy their own
presentation of the "new" disputes to this Tribwial. It would be cwious indeed if only Claimants
could seek relief from this Tribunal under the CSA. Claimants previously interpreted the parties'
agreements and the CSA to demonstrate that this Tribwial had jurisdiction and authority to
determine any disputes between the parties. Claimants are precluded and estopped from taking a
contrary position now.
The actions of Claimants in bringing prior past Award disputes to this Tribunal requesting
relief similar to that now sought by SCA bar and preclude their present assertion contesting the
jurisdiction and authority of I.his Tribunal._APP 19-20, 276-287._ Rachal v. Reitz, 403 S. W.3d 840
(Tex. 2013), In Re First.Merit Bank, 52 S.W.3d 749, 754.
Ill. THE CURRENT STATUS OF TAILWIND SPORTS CORP.
Tailwind Sports, Corp. ("Tailwind") has asserted that it has been dissolved consistent with
Delaware law, thus no jurisdiction can exist in this Tribwial. We do not need to do more at this
time other than to note that the existence or nonexistence of Tailwind is, in our view, an issue
relating to the possible enforcement of any award that may be rendered. Tailwind is a party to the
parties' agreements, CSA and CPC at issue. Tailwind or its allies may pursue such strategies and
tactics as it and they deem most appropriate in this arbitration.
IV. SEPARATE CONCURRENCE IN PART AND DISSENT
Senator Lyon concurs in Section D(2) of this Award determining that this Tribunal has no
jurisdiction over Mr. William Stapleton. For the reasons he separately states in his Dissent to this
Award, he does not join the majority decision.
6
MR 690
V. CONCLUSION
Based upon the law and evidence received and analyzed above, the interpretation of the
parties' agreements. CSA and CPC, this Tribunal concludes, determines and publishes this Partial
Final Award on Jurisdiction finding and awarding that:
I. This Tribwial has no jurisdiction over Mr. William Stapleton; and
2. This Tribunal. by the agreement of the parties and the express terms of the CSA, does have
and will exercise jurisdiction to determine and make a final award resolving any disputes between
or among Tailwind Sports. Corp .. Lance Annstrong. and SCA Promotions, Inc. et al.: and
3. That any claims of any party contesting the continuing jurisdiction of this Tribwial were
waived, precluded and estopped by the parties' agreements to and actual previous submissions of
multiple other disputes to this Tribwial.
4. The parties shall meet and confer and suggest to the Panel dates for a preliminary
conference to address the nature and timing of further proceedings in this matter.
This award executed and published to the parties in Dallas Cowity Texas. this d.J_ d y of
October, 2013.
Ted B. Lyon. Esq.
7
MR 691
IN THE MATTER OF AN ARBITRATION BETWEEN
LANCE ARMSTRONG and
TAILWIND SPORTS CORP.








Claimant,
v.
ARBITRATION BEFORE THE
HONORABLE RICHARD FAULKNER,
RICHARD CHERNIC AND TED LYON
SCA PROMOTIONS, INC., et al.
Respondents.
CONCURRENCE IN PART AND DISSENT FROM
PARTIAL FINAL AWARD ON JURISDICTION
On October 29, 2013, the Panel issued its Partial Final Award on Jurisdiction (the
"Award") granting itself jurisdiction to reconsider its Final Arbitration Award entered on
February 8, 2006 (the "2006 Final Award") and to consider sanctions for alleged misconduct
related to the proceedings leading to the 2006 Final Award.
I concur with Section D(2) of the Award determining that this Tribunal does not have
jurisdiction over William Stapleton. However, I dissent from the remainder of the A ward
because this Tribunal was divested of jurisdiction over these claims upon issuance of the 2006
Final Award and these claims do not fall within the scope of the Parties' arbitration agreement.
I. BACKGROUND
This Tribunal was originally empanelled to determine if SCA Promotions, Inc. ("SCA")
was liable to Lance Armstrong ("Armstrong") and Tailwind Sports Corp. ("Tailwind)
(collectively "Claimants") for payment pursuant to the Contingent Prize Contract 31122 ("CPC")
as a result of Armstrong wi nning the 2002-2004 Tour de France races.
SCA denied liability, asserting that Armstrong won using prohibited means. Claimants
strongly denied using prohibited means to win. After receiving extensive evidence at trial, the
Tribunal was prepared to rule. However, before the Tribunal rendered its own Final Award on
the merits, the parties privately resolved their disputes and entered into a Compromise Settlement
MR 693
Tab D
Agreement ("CSA"). Pursuant to the terms of the CSA, this Tribunal issued the 2006 Final
Award providing for the payment of funds in the amount of $7,500.000.00 to Claimants. See
Armstrong v. SCA Promotions, Inc., Final Arbitration Award (Feb. 8, 2006).
On February 7, 2013, SCA filed an application to vacate the 2006 Final Award in the
l 16lh District Court, Dallas County, Texas, on the basis that the award was obtained by the use of
fraudulent testimony by Armstrong. See Plaintiffs Original Petition, SCA Promotions, Inc. v.
Lance Armstrong, Tailwind Sports, Inc, and William Stapleton, Cause No. DC13-01564, filed in
the I 16th District Court, Dallas County, Texas.
SCA alleged that Armstrong's sworn testimony that he did not use prohibited
performance enhancing drugs ("PEDs") to win the 2002-2004 Tour de France races was false, as
indicated by Armstrong's public statements on January 15, 2013 when he admitted on the Oprah
Winfrey Show that he used PEDs for these races.
On June 10, 2013, SCA filed its Motion to Reconvene Arbitration and Request for
Sanctions and Forfeiture against Claimants, in which it requested this Tribunal to:
(1) administratively re-open the arbitration;
(2) order forfeiture of the $7,500,000.00 paid by SCA to Claimants pursuant to the 2006
Final Award; and
(3) to "sanction" the Claimants in the form of:
a. monetary damages for providing false testimony during the 2006 proceedings;
b. attorney fees, costs and expenses incurred by SCA in the 2006 proceedings;
c. monetary damages for business injury and reputation loss suffered as a result
of angry customers who believed Armstrong's assertions that he did not use
PEDs;
d. and unspecified monetary sanctions for filing fraudulent pleadings.
On October 29, 2013, the Panel issued its Partial Final Award on Jurisdiction granting
itself jurisdiction to reconsider the 2006 Final Award and to consider sanctions for alleged
misconduct related to the proceedings leading to the 2006 Final Award. See Armstrong v. SCA
Promotions, Inc., Partial Final A. ward on Jwisdiction (Oct. 29, 2013 ).
2
MR 694
II. LEGAL ANALYSIS
The issue before the Panel is whether this Arbitration Tribunal has jurisdiction to re-open
an arbitration that resulted in a Final A ward in 2006, order forfeiture of the relief granted to
Claimants in the 2006 Final Award, and make a new award granting SCA the relief it was
originally denied, as well as additional monetary sanctions against Claimants.
A. The Arbitration Tribunal does not have jurisdiction to vacate its own 2006 Final Award
SCA requests that this Tribunal re-open the arbitration and order forfeiture of the money
awarded to Claimants in the 2006 Final Award. In addition, it requests that Claimants be ordered
to pay its attorney fees, costs, and expenses incurred during the 2006 litigation.
Notably, the 2006 litigation was a breach of contract case concerning whether SCA was
liable to Claimants under the CPC. By requesting that the Tribunal re-open the 2006 arbitration
and order forfeiture of the funds paid under the 2006 Final Award and payment of SCA's
attorney fees, costs and expenses incurred in the 2006 litigation, SCA is effectively requesting
that the Tribunal reverse its prior final award and instead find for SCA. As such, this claim
should be properly construed as an application to vacate the 2006 Final Award, and is governed
by section 171.088 of the Texas Civil Practice and Remedies Code.
Section 171.088 provides, in relevant part:
171.088 Vacating Award
(a) On application of a party, the court shall vacate an award if:
(1) the award was obtained by corruption, fraud, or other undue
means;
(b) ... A party must make an application under Subsection (a)(l) not later
than the 90th day after the date the gr0tmds for the application are
known or should have been known.
TEX .. CJV. PRAC. &REM. CODE 171.088(a), (b).
3
MR 695
The plain language of the statute grants authority to vacate an arbitration award to the
court who confirmed the award, not the arbitration panel who issued the award. See id. This
implicit limitation on an arbitration panel's ability to reconsider its final award complies with the
functus ofjicio doctrine, which the U.S. Supreme Court has described as providing that
"arbitrators exhaust their power when they make a final determination on the matters submitted
to them. They have no power after having made an award to alter it; the authority conferred on
them is then at an end." Bayne v. Morris, 68 U.S. 97, 99 (1863).
There are a few well-recognized exceptions to the functus officio doctrine: "an arbitrator
can (1) correct a mistake that is apparent on the face of the award; (2) decide an issue which has
been submitted but which has not been completely adjudicated by the original award; or (3)
clarify or construe an arbitration award that seems complete but proves to be ambiguous in its
scope and implementation." Brown v. Witco Corp. , 340 F.3d 209, 219 (5th Cir. 2003).
However, SCA has not pied nor established that any of these exceptions apply in this case.
SCA's reliance on Lehigh Valley R.R. Co. v. Germany to circumvent the functus officio
doctrine is unpersuasive. Lehigh Valley involved an international arbitration commission created
for the purpose of resolving reparation claims against Germany due to acts of sabotage against
American citizens during World War I, and was governed by detailed Rules of Procedure that
specifically provided for the re-opening of an arbitration upon an order by the arbitration
commission. See Reports of Int'l Arbitral Awards, Mixed Claims Comm'n (United States &
Germany), Vol. VIII, appx. I, art. VI( d). SCA has failed to identify a similar procedural rule
applicable to this case that provides for re-opening of this arbitration. Absent a specific grant of
authority to re-open the arbitration proceeding, the common Jaw doctrine of functus officio
precludes this Tribunal from having jurisdiction to effectively vacating and re-deciding its 2006
Final Award. See Bayne, 68 U.S. at 99.
4
MR 696
B. SCA's claim does not fall within the scope of the Parties' arbitration agreement
I further disagree with the maj ority's determination that the claims presented by SCA in
its Motion to Reconvene Arbitration and Request for Sanctions and Forfeiture against Claimants
fall within the scope of the parties' arbitration agreement, thereby providing this Tribunal
jurisdiction to decide the presented claims.
Arbitration tribunals only have jurisdiction of those parties and issues affirmatively
delegated to them. Stolt-Nielsen, S.A. v. Animal Feeds Int '[ Corp., 559 U.S. 662 (2010); AT&T
Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). In order for this Panel to have jurisdiction,
SCA's claims must fall within the scope of the arbitration clause. See In re Rubio/a, 334 S.W.3d
220, 223 (Tex. 2011). A determination of whether a given dispute falls within the scope of an
arbitration clause is a matter of contract interpretation. See, e.g., Pennzoil Exp. and Prod. Co. v.
Ramco Energy Ltd., 139 F. 3d 1061, 1066 & n.7 (5th Cir. 1998); In re Choice Homes, Inc., 174
S.W.3d 408, 413 (Tex. App.-Houston [14th Dist.] 2005, orig. proceeding).
As noted in the opinion, the controlling arbitration provision in this case is
found in section 5.6 of the CSA, which provides:
This SETTLEMENT AGREEMENT shall be governed by, construed, interpreted
and the rights of the parties determined in accordance with the laws of the State of
Texas, without regard to conflict of law principles thereof. The Arbitration
Panel consisting of Richard Faulkner, Richard Chernick and Ted Lyon shall
have exclusive jurisdiction over the parties her eto with respect to any dispute
or controversy among them arising under or in connection with t his
SETTLEMENT AGREEMENT or Contingent Prize Contract #31122 and, by
execution and delivery of this SETTLEMENT AGREEMENT, each of the parties
hereby submits to the jurisdiction of that Panel and waives any objection to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
personam or subject matter jurisdiction and any similar grounds, consents to
service of process by mail or any other manner pennitted by law, and irrevocably
agrees to be bound by any order or award issued or rendered thereby in
connection with this SETTLEMENT AGREEMENT.
See CSA, p.5, 5.6 (emphasis added).
5
MR 697
Importantly, the CSA's arbitration clause limits itself to arbitration of any dispute among
the parties "arising under or in connection with [the CSA or CPC]." Courts have interpreted
arbitration clauses that provide for arbitration of "any and all disputes arising wider or in
connection" with a contract, such as the arbitration provision at issue in this case, as narrower in
scope than an arbitration clause providing for arbitration of "any and all disputes between the
parties. " See Tittle v. Enron Corp. , 463 FJd 410, 422 (5th Cir. 2006); Autonation USA Corp. v.
Leroy, 105 S.W.3d 190, 197 (Tex. App.-Houston [14th Dist.] 2003, orig. proceeding); In re
Conseco Fin. Serv. Corp., 19 S.W.3d 562, 570 (Tex. App.- Waco 2000, orig. proceeding).
If the facts alleged in support of the claim have a "significant relationship" to or are
"factually intertwined" with the contract that is subject to the arbitratiou agreement, the claim is
within the scope of the agreement and is arbitrable. Dennis v. College Station Hosp., L.P., 169
S. W.3d 282, 285 (Tex. App.- Waco 2005, pet. denied). If the facts alleged stand alone and are
completely independent of the contract, the claim is not subject to arbitratiou. Pennzoil Co. v.
Arnold Oil Co., 30 S.W.3d 494, 498 (Tex. App.-San Antonio 2000, orig. proceeding). To
determine whether a claim falls within the scope of an arbitration agreement, the Panel must look
at the terms of the agreement and the factual aJlegations iu the petition, rather than the legal
causes of action asserted. See Jn re Rubio/a, 334 S.W.3d at 223; Prudential Sec., Inc. v.
Marshall, 909 S.W.2d 896, 900 (Tex. 1995).
The relief requested by SCA in its Motion to Reconvene Arbitration and Request for
Sanctions and Forfeiture against Claimants is not predicated on a claim for breach of the CSA or
a claim for fraudulent inducement in connection with the CSA. Instead, it asserts that fraudulent
testimony by Armstrong in the 2006 litigation resulted in an improper award, and so the funds
paid to Claimants pursuant to that award should be returned to SCA. In addition, SCA requests
sanctions for the fraudulent conduct as compensation for certain tort-based damages.
6
MR 698
Since SCA's legal claims are based solely on fraud alleged to have occurred during the
2006 arbitration proceedings, the dispute could be maintained without reference to the CSA or
CPC. Therefore, the dispute is not "arising under or in COJUlection with" the CSA or CPC, and
so does not fall within the scope of the arbitration provision at issue in this case.
The majority opinion states that "the acrimonious history of these parties mandated the
creation of a private mechanism for resolution of any additional disputes that could arise after
publication of the award." Partial Final Award on Jurisdiction, at 5. However, the parties did not
create such a broad private mechanism. Instead, the parties chose to forego a broad "any and all
disputes between the parties" provision in favor of the more narrow "any dispute or controversy
among them arising under or in connection with (the CSA and CPC]."
The majority opinion further states " that contrary to Claimants' current position, they
affirmatively asserted that this Tribunal had the authority and jurisdiction to sanction SCA after
the publication of the 'consent' Award." Partial final Award on Jurisdiction, at 5. The majority
asserts that this action by Claimants "bar and preclude their present assertion contesting the
jurisdiction and authority of this Tribunal." Partial Final Award on Jurisdiction, at 6.
However, Claimants' claim based on the publication of the 'consent' Award is
substantively different than SCA's claims here because the Claimants' claim was that publication
of the 'consent' Award breached the CSA's confidentiality provisions. See SCA App. 276-287.
A breach of contract claim based on the CSA's confidentiality provisions is clearly a dispute
"arising under or in connection,, with the CSA, and so falls within the scope of the parties'
arbitration agreement.
7
MR 699
Ill.CONCLUSION
Based on the foregoing reasons, I would find that this Tribunal does not have jurisdiction
to decide the claims presented by SCA in its Motion to Reconvene Arbitration and Request for
Sanctions and Forfeiture against Claimants.
What Armstrong did, i.f true, is morally reprehensible, but the law does not allow this
Panel to address it at this time. SCA has not pied facts sufficient to grant this Tribunal
jurisdiction to re-decide claims that were resolved seven years ago when this Panel issued a Final
Award based on the agreement of the Parties. Accordingly, I concur with Section D(2) of the
Award and respectfully dissent from the remainder of the Award.
Signed this//th day of December, 2013.

Ted B. Lyon, Esq.
8
MR 700
02/25/2014 14:13
2145535755
115TH DISTRICT COURT
CAUSE NO. DC13-01564
SCA PROMOTIONS, INC.,
Plaintiff,
v.
LANCE ARMSTRONG, TAILWIND
SPORTS, INC., AND WILLIAM
STAPLETON,
Defendants.











ORDER
IN THE DISTRICT COURT
DALLAS COUNTY, TEXAS
116th JUDICIAL DISTRlCT
PAGE 02/02
Came on to be heard Defendant Lance Armstrong's Amended Motion to Stay Arbitration
Proceedings and Alternative Motion to Vacate Partial Final Award on Jurisdiction and Defendant
Tailwind Sports Corp.'s
1
Amended Motion to Stay Arbitration Proceedings and Alternative
Motion to Vacate Partial Final Award on Jurisdiction. The Court, having considered the
pleadings herein and the arguments of counsel, is of the opinion that both Motions should be and
are hereby DENIED.
So ordered this 25th day of February, 2014.
1
Named in this suit as Tailwind Sports, Inc.
MR 1412
Tab E
171.023. Proceeding to Stay Arbitration, TX CIV PRAC & REM 171.023
2014 Thomson Reuters. No claim to original U.S. Government Works. 1
Vernon's Texas Statutes and Codes Annotated
Civil Practice and Remedies Code (Refs & Annos)
Title 7. Alternate Methods of Dispute Resolution (Refs & Annos)
Chapter 171. General Arbitration (Refs & Annos)
Subchapter B. Proceedings to Compel or Stay Arbitrations (Refs & Annos)
V.T.C.A., Civil Practice & Remedies Code 171.023
171.023. Proceeding to Stay Arbitration
Currentness
(a) A court may stay an arbitration commenced or threatened on application and a showing that there is not an
agreement to arbitrate.
(b) If there is a substantial bona fide dispute as to whether an agreement to arbitrate exists, the court shall try the
issue promptly and summarily.
(c) The court shall stay the arbitration if the court finds for the party moving for the stay. If the court finds for the
party opposing the stay, the court shall order the parties to arbitrate.
Credits
Added by Acts 1997, 75th Leg., ch. 165, 5.01, eff. Sept. 1, 1997.
Notes of Decisions (20)
V. T. C. A., Civil Practice & Remedies Code 171.023, TX CIV PRAC & REM 171.023
Current through the end of the 2013 Third Called Session of the 83rd Legislature
End of Document 2014 Thomson Reuters. No claim to original U.S. Government Works.
Tab F