April 16th, 2009
Arbitrability, Authority of Arbitrators, Legislative Developments, United States Supreme Court
Will the Arbitration Fairness Act of 2009 Apply to Nondomestic Agreements and Awards Falling Under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards?
Introduction
In Parts I and II we discussed how the Arbitration Fairness Act of 2009 (the “Fairness Act”) will likely lead to litigation concerning whether, and if so, to what extent, Proposed Section 2(c) abrogates: (a) the severability doctrine; and (b) the rule that arbitrators may determine their own jurisdiction if the parties clearly and unmistakably agree, with that determination subject only to deferential judicial review (the “Own Jurisdiction Rule”). In Parts IIIA-C we discussed two constructions of Proposed Section 2(c): one that would abrogate severability and the Own Jurisdiction Rule in all cases falling under Chapter 1 of the FAA (the “Broad Construction”); and one that would limit the scope of Proposed Section 2(c) to Chapter 1 cases where one of the parties contends that the arbitration agreement requires arbitration of a consumer, employment, franchise or statutory civil rights dispute (the “Narrow Construction”).
In this Part IV we consider whether Proposed Section 2(c) of the Fairness Act applies to agreements and awards falling under the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention” or the “Convention”), which are governed by Chapter 2 of the FAA. While the matter is not entirely free from doubt, Proposed Section 2(c) of the Fairness Act will probably be construed not to apply to awards and agreements falling under the New York Convention. Thus, the doctrine of severability and the Own Jurisdiction Rule will probably continue to apply in cases falling under FAA Chapter 2, even if courts adopt the Broad Construction of the Fairness Act in cases governed by Chapter 1. Continue Reading »
April 7th, 2009
Arbitrability, Authority of Arbitrators, Legislative Developments, United States Supreme Court
On April 4 we reported on 14 Penn Plaza LLC v. Pyett, ___ U.S. ___ (2009) (Thomas, J.) (available here), as did many others last week. Professor Sarah Cole of the ADR Prof Blog published a thoughtful and well-written piece on Pyett (available here), which raised some interesting questions. For example, Professor Cole observed that “if the Arbitration Fairness Act passes, it would not surprise me to see a subsequent effort to overturn the Pyett decision.” As discussed in a series of posts we are publishing on the Fairness Act (Part I available here), the Act would render arbitration agreements falling within the scope of the FAA invalid and unenforceable to the extent they require predispute arbitration of consumer, employment, franchise and statutory civil rights disputes. Continue Reading »
April 4th, 2009
Arbitrability, Authority of Arbitrators, United States Supreme Court
On April 1 the United States Supreme Court decided 14 Penn Plaza LLC v. Pyett, ___ U.S. ___ (2009) (Thomas, J.), an interesting case that highlights some of the differences between labor arbitration governed by the National Labor Relations Act (“NLRA”) and arbitration governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (the “FAA”). The question before the Court was whether “a collective bargaining agreement that clearly and unmistakably requires union members to arbitrate [Age Discrimination in Employment Act (“ADEA”)] claims is enforceable as a matter of federal law.” Slip op. at 25. Reversing the United States Court of Appeals for the Second Circuit, the Court said “yes.” See slip op. at 25. Continue Reading »
March 30th, 2009
Authority of Arbitrators, Awards, Nuts & Bolts: Arbitration, functus officio
In this first “Nuts & Bolts” post we briefly review the general rules concerning the finality of arbitration awards under the Federal Arbitration Act (“FAA”), and note some of the consequences that flow from finality. Our principal focus is on Second Circuit finality rules. The rules in other circuits may differ. Continue Reading »
