Determining Jurisdiction and Arbitrability - Chapter 4 - The College of Commercial Arbitrators Guide to Best Practices in Commercial Arbitration - 2nd Edition
R. Doak Bishop, Esq., Partner, King & Spalding, Houston, Texas
Robert B. Davidson, Esq., Executive Director, JAMS Arbitration Practice, New York, New York
Barry H. Garfinkel, Esq., Of Counsel, Skadden, Arps, Slate, Meagher & Flom, New York, New York
June R. Lehrman, Esq., Los Angeles, California
DETERMINING JURISDICTION AND ARBITRABILITY
Arbitrators should ensure that challenges to jurisdiction and arbitrability are resolved correctly, promptly, and efficiently by the appropriate decision maker.
Arbitrators should be aware that the question whether challenges to jurisdiction and arbitrability are to be decided by courts or arbitrators is a subject of complex and evolving case law.
Arbitrators generally have authority over only those parties who have agreed to arbitrate and those disputes that fall within the terms of the parties’ written arbitration agreement. Technically, arbitral authority over persons should properly be referred to as jurisdiction, whereas arbitrability should refer to whether the subject matter of the parties’ dispute is within the scope of the arbitration agreement or whether public policy bars arbitration of certain kinds of disputes, for example, claims for violation of statutory rights. (Although the United States Supreme Court has frequently held that disputes that arise from federal statutes, such as antitrust, securities, racketeering, and employment disputes—both statutory and otherwise—are arbitrable, there always remains the possibility that Congress will exempt some statute-based claims from being arbitrated.) The terms jurisdiction and arbitrability are often used interchangeably in case law and literature and such usage unavoidably carries over to this chapter.
When parties assert that the arbitrator lacks authority over the parties or the subject matter, the question naturally arises regarding whether arbitration is the proper forum to decide that issue. In certain circumstances, questions of jurisdiction and arbitrability are properly resolved only by a court. Often, however, such questions can and should be resolved by the arbitrators. The line between which questions are for courts and which are for arbitrators is not always clear. There is a significant body of complex and rapidly evolving case law in this area. The trend, however, is toward increasing the authority of arbitrators to decide questions concerning their own jurisdiction and the arbitrability of claims.
This chapter addresses the issues of jurisdiction and arbitrability in non-class arbitrations. Chapter 5 addresses jurisdiction and arbitrability issues in class arbitrations.
II. LEGAL BACKGROUND
A. Prima Paint; Rent-a-Center, West; and the Separability Doctrine
B. The First Options Clear and Unmistakable Evidence Doctrine
C. Gateway (Procedural vs. Substantive) Jurisdictional Issues
D. Conditions Precedent to Arbitration
F. Illegality and Other Defenses Arguably Going to the Making of the Contract
III. PROCEDURES FOR DETERMINING JURISDICTIONAL AND ARBITRABILITY OBJECTIONS