Business Litigation Report - November 2015

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Deciding Who Decides Questions of Arbitrability: A Survey of American Law and a Comparative Perspective -

Parties to commercial disputes frequently encounter and litigate the threshold issue whether their dispute is within the scope of an arbitration clause and must therefore be arbitrated rather than litigated in court. Even before this threshold issue may be decided, however, there is a more fundamental question: Who gets to decide whether a dispute is subject to arbitration—a court, or the arbitration panel itself? American courts have struggled with the question for decades—and the struggle continues. Other jurisdictions have a much more straightforward approach.

American Approach -

Enactment of the FAA and Presumption of Arbitrability:

In the United States, the Federal Arbitration Act requires federal district courts to stay judicial proceedings or compel arbitration as long as the parties have a valid agreement to arbitrate that encompasses their dispute. 9 U.S.C. §§ 3, 4. However, the Act does not address whether, or when, the question of arbitrability should be decided by the arbitration panel rather than the court.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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