Assuming there is a valid arbitration clause in the contract and it was not fraudulently entered in to, the judge clearly should have dismissed the action on that basis alone. As you must know, arbitration clauses are primarily contractual and are thus enforceable under the constitution of the United States, absent some sort of irregularity in its formation or procedure. If the particular clause was "unconscienable" it may be unenforceable.
If the clause is valid, a simple writ of mandamus will result in an automatic reversal of the trial court's decision to not first require arbitration.