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Cert Grant – BG Group v. Argentina

The Supreme Court granted cert today in another arbitration case, BG Group v. Argentina.  The issue presented in this case is the following:

In disputes involving a multi-staged dispute resolution process, does a court or instead the arbitrator determine whether a precondition to arbitration has been satisfied?

It is difficult to predict what the Supreme Court will ultimately do in this BG Group case, but my bet is that this issue (whether a pre-condition has been satisfied) will be considered an issue of procedural arbitrability, for an arbitrator to decide.  Typically, a court will determine very narrow gateway issues, like whether there is an agreement to arbitrate and whether the dispute at issue is covered by the arbitration clause, and if the answer to both of these questions is yes, the court compels arbitration under the Federal Arbitration Act.  To keep the Federal Arbitration Act as setting forth a stream-lined process to facilitate arbitration, I don’t see the Supreme Court expanding this narrow list of gateway issues for a court to decide.

Procedural arbitrability (issues for an arbitrator to decide) vs. substantive arbitrability (issues for a court to decide) must have been on the Supreme Court’s mind today.  In its Oxford v. Sutter decision, which was also issued today, the Court pointed out in a footnote that it is still an open issue whether a court or arbitrator should decide whether an agreement provides for class action arbitration.


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