ABERDEEN - Biofuels investor Process Technologies Services LLC must try arbitration to get its investment back from the refiner MIPCO.

Chancellor Jacqueline Mask dismissed PTS' motion to be released from its investment contract with MIPCO, which for more than a year has sought to establish biodiesel refineries in Northeast Mississippi.

PTS, a North Carolina business, asked the court to order MIPCO to return its $365,000 because, it claimed, the investment contract was a fraud. MIPCO officials lied about their abilities to succeed and about their personal investments in the company, PTS said.

MIPCO also claimed its contract did not require arbitration.

"In this case, the parties expressly agreed to arbitration on such terms as set forth in MIPCO's operating agreement," Mask wrote in her order.

Arbitration is method is settling legal disputes using a neutral, third-party mediator. Decisions usually are binding.

Mask also said she found "no legal prohibition" to formation of a contract between PTS and MIPCO.

PTS sued MIPCO late in 2009, saying it wanted its money back.

During the March 9 hearing in Pontotoc over this dispute, MIPCO attorney Jeffrey Williams argued that their contract did not allow for payback or "recission" and that PTS wasn't entitled to avoid arbitration.

Mask also said PTS had not provided her with enough proof to find that MIPCO fraudulently signed the contract with PTS.

Her order stated that PTS' suggestion of fraud is made about the contract as a whole and not only about arbitration.

PTS attorney Kathryn H. Hester of Jackson said the cost of arbitration was one of her client's objections to the process.

"Our goal is to have this resolved as quickly and as inexpensively as possible," she said. "We hope that MIPCO will go forward expeditiously with the procedure it sought."

MIPCO counsel Williams was not available to comment.

Contact Patsy R. Brumfield at (662) 678-1596 or patsy.brumfield@djournal.com.