Rodriguez

American Technologies, Inc. (ATI), appeals from an order denying ATI’s motion to compel arbitration and stay judicial proceedings. ATI contends federal law governs the arbitration agreement and the trial court therefore lacked discretion under state arbitration law to deny the motion. We agree.

Under California law, when a party to an arbitration agreement is also a party to a pending court action with a third party, and there is a possibility of conflicting rulings on a common issue of law or fact, the court has several options. It may refuse to compel arbitration, or it may stay either the arbitration or the court proceeding pending completion of the proceedings in the other forum. (Code Civ. Proc., § 1281.2, subd. (c) (section 1281.2(c).) Under the Federal Arbitration Act, title 9 United States Code section 1 et seq. (FAA), the court’s only option in these circumstances is to stay the court proceeding and compel the arbitration.

In Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376 [ 25 Cal.Rptr.3d 540 , 107 P.3d 217 ] (Cronus), the parties to an arbitration agreement had contracted to utilize California law, but had also agreed the designation of…