A state appellate court ruled Tuesday that private contractors cannot force the State of Connecticut into binding arbitration, even after receiving state permission to file a lawsuit.
The Connecticut Appellate Court affirmed a lower court decision barring Pavonix (Massachusetts), Inc., formerly known as Softscape, Inc., from moving its long-running contract dispute with the Connecticut Judicial Branch out of the courtroom and into private arbitration.
The dispute dates back to 2000, when Pavonix contracted to develop a Case Management Information System for the Judicial Branch’s Court Support Services Division. While the initial request for proposals and subsequent agreement referenced arbitration for resolving disputes, the contract also explicitly noted that the Judicial Branch could not waive its sovereign immunity.
Pavonix later claimed it delivered the software but never received full payment, leading the company to file a claim with the Office of the Claims Commissioner in 2007. In late 2023, the state Attorney General’s office signed a stipulation granting Pavonix permission to sue the Judicial Branch in Superior Court.
When Pavonix filed its lawsuit in Hartford Superior Court in 2024 alleging breach of contract and trade secret violations, it simultaneously filed an arbitration demand and moved to halt the court proceedings. The state objected, filing its own motion to permanently block arbitration on sovereign immunity grounds.
Trial Court Judge Lubbie Klau ruled in favor of the state, concluding that state law limits the Claims Commissioner’s authority strictly to permitting lawsuits in Superior Court, not private arbitration forums.
In the unanimous appellate decision released August 25, 2026, Judge Lubbie Harper Jr. wrote that the governing statute, General Statutes § 4-160, does not authorize a waiver of sovereign immunity for private arbitration proceedings.
The court noted that the statute explicitly mandates that authorized claims against the state “shall be tried to the court without a jury” and references only judicial forums. Harper wrote that the court could not read exceptions into the statute that the legislature did not explicitly write.
The appellate panel concluded that while the state waived immunity from being sued in Superior Court, that waiver does not extend to private dispute resolution forums. The ruling keeps the company’s breach of contract lawsuit inside the state court system.
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