Bankruptcy Court Order Enjoining Arbitration is Appealable

In Solidus Networks, Inc. v.  Excel Innovations, Inc., case no. 06-17288 (9th Cir. Sept. 7, 2001), the Ninth Circuit holds that an injunction issued pursuant to  11 U.S.C. § 105(a) to stay arbitration to which the debtor is not a party is an appealable order.  The court reasons that the injunction is effectively an extension of the automatic stay (11 U.S.C. § 362).  Since the automatic stay itself is effectively an injunction issuing from the bankruptcy court,and orders denying or granting relief from the automatic stay are appealable, the Ninth saw “no reason to treat the instant injunction differently.”

The court took up the jurisdictional issue on its own, demonstrating yet again how carefully it guards access to its jurisdiction.