Originally from:

AAA Handbook on Commercial Arbitration, Third Edition

CHAPTER 7

THE DEVELOPING AMERICAN APPROACH TO ARBITRABILITY

Steven C. Bennett

I. Introduction

The power to determine whether an arbitration proceeding has been properly commenced, to determine the breadth of the issues subject to arbitration and whether any public policy concerns limit the ability of an arbitrator to resolve a dispute—all of these (and more) may be called matters of “arbitrability.”  The resolution of such matters can greatly affect the conduct of an arbitration proceeding.  Indeed, arbitrability may be the ultimate trump card in arbitration.  If arbitrability issues may be raised in court proceedings before the arbitration can be completed, the arbitration process may be halted or disrupted even before it really begins.  And, if a court may freely review arbitrability issues once an arbitration proceeding is complete, then the arbitration may prove to have been a waste of time and effort; the arbitration results, even if otherwise fair and just, may be undone on grounds of inarbitrability.

In the opposite direction, if issues of arbitrability cannot be addressed by a court until after an arbitration proceeding is complete, and if a court’s review of arbitrability issues must necessarily be limited, then there is a risk that arbitrators will overreach, and litigants may be unjustly subjected to arbitration.  Confidence in the arbitration process may, as a result, be undermined.

With so much at stake in determining arbitrability, one might expect that clear rules would be established by legislative action, standardization of arbitration clauses or definitive judicial rulings.