Background
Pavonix, a technology company formerly known as Softscape, contracted with Connecticut’s Judicial Branch in 2000 to develop a case-management system. The agreement incorporated an American Arbitration Association clause, while also stating that the Judicial Branch could not waive sovereign immunity. Pavonix later alleged that the state failed to pay for its work and unlawfully disclosed and modified the software.
After pursuing its claims before the Office of the Claims Commissioner, Pavonix received permission under General Statutes § 4-160 to sue the state in Superior Court. It filed suit in 2024 while also demanding AAA arbitration, moving to compel arbitration and stay the court action. The state sought a permanent injunction against arbitration. The trial court denied Pavonix’s motion and permanently enjoined arbitration on sovereign-immunity grounds.
The Court’s Holding
The Appellate Court affirmed. It first held that it could review the appeal because the permanent injunction was a final, appealable judgment, and the ruling denying the motion to compel arbitration and stay litigation was inextricably intertwined with that injunction.
On the merits, § 4-160’s authorization to sue the state does not clearly waive sovereign immunity from private arbitration. The statute repeatedly directs authorized claims into judicial proceedings, requires that issues be tried to the court without a jury, and provides procedures tied to court actions and judgments. Its provision equating the state’s rights and liabilities with those of private persons does not expand the authorized forum from court to arbitration. Unlike § 4-61, § 4-160 does not expressly permit arbitration.
Key Takeaways
- Permission from Connecticut’s claims commissioner to sue the state under § 4-160 permits litigation in Superior Court, not private arbitration.
- A state agency’s contractual arbitration clause cannot itself broaden a statutory waiver of sovereign immunity.
- A permanent injunction barring arbitration is immediately appealable; related arbitration-stay issues may be reviewed when inextricably intertwined.
Why It Matters
The decision reinforces that waivers of Connecticut’s sovereign immunity are strictly construed. Contractors with arbitration clauses in state agreements cannot assume that claims-commissioner permission to sue makes the state arbitrable.
For disputes authorized under § 4-160, the prescribed route is a court action tried to the judge, absent a separate and clear legislative authorization for arbitration.