Disputes with Non-Signatories and "Consent" to Arbitral Jurisdiction - Part 3 - Chapter 3 - AAA Yearbook on Arbitration and the Law - 24th Edition
Alan Scott Rau holds the Mark G. and Judy G. Yudof Chair of Law at the University of Texas at Austin School of Law. He earned his B.A. and LL.B. from Harvard University. Before joining the faculty at the University of Texas in 1971, he studied at the London School of Economics and practiced law with Coudert Frères in Paris, France. Professor Rau is the co-author of Processes of Dispute Resolution: The Role of Lawyers (4th ed. 2006), and is also the author of numerous law review articles dealing with ADR and arbitration, most recently “The Arbitrator and Mandatory Rules,” 18 Am. Rev. of Int’l Arb. 51 (2008); “Fear of Freedom,” 17 Am. Rev. of Int’l Arb. 469 (2008); “Evidence and Discovery in American Arbitration: The Problem of Third Parties,” 19 Am. Rev. of Int’l Arb. 1 (2009); “Understanding (and Misunderstanding) ‘Primary Jurisdiction,’” 21 Am. Rev. of Int’l Arb. 47 (2011); and “The Limits of Arbitral Power: Yet Another Trilogy,” 22 Am. Rev. of Int’l Arb. 435 (2012). Professor Rau is an Advisor to the American Law Institute Project on the Restatement of International Commercial Arbitration; he also frequently serves as an arbitrator and is a member of the panel of the American Arbitration Association and the panel of mediators of the Court of Arbitration for Sport. He has taught as a Visiting Professor at the University of Toronto Faculty of Law; as a Fulbright Professor at the China University of Political Science and Law in Beijing; at the University of Geneva Faculty of Law; and at the University of Paris-I and the University of Paris-II.
This article deals with what is a recurring problem in any legal system—the question, in deciding whether to refer a dispute to arbitration, of how to demarcate the respective roles of courts and arbitrators. The treatment of this problem in the courts of the United States has certainly not been without its twists and turns—but it exemplifies, I think, the common law at its best—able over time to get the job done well enough, if roughly, and to forge sensible, commonlyheld understandings. This is an attempt at a synthesis—an attempt to describe where I think we are at the moment.
In particular, the emphasis here is on the problem of arbitration in complex, interrelated disputes involving multiple parties: Whether there is in fact a contractual “duty” to arbitrate in such circumstances—and the respective roles of courts and arbitrators in making that determination—is one of the thorniest problems in commercial arbitration today: It is logically prior to questions raised, for example, with respect to how the tribunal is to be constituted, or whether related proceedings should be “joined” or “consolidated.” The proper approach to this problem, I would suggest, fits neatly within an overarching conceptual framework that I am presenting here.
II. Is There a Valid Agreement to Arbitrate?
A. The Problem
I begin with a point so banal, so commonplace, so formulaic, that readers justifiably wince when they see it repeated. “Arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.”1 (The antiquity of this formulation is well demonstrated by its blithe use of the (now proscribed) male pronoun.) A second rule, “follow[ing] inexorably from the first,” is that this “question of arbitrability”—whether there is “a duty for the parties to arbitrate” the dispute—whether the parties have consented to a final arbitral judgment on the issues—whether, in short, the arbitrators have “jurisdiction” to decide—is “undeniably an issue for judicial determination.”2