Everything You Really Need To Know About "Separability" In Seventeen Simple Propositions - Aria Vol. 14 Nos. 1-2 2003
Alan Scott Rau - Robert F. Windfohr & Anne Burnett Windfohr Professor of Law, The University of
Originally from American Review of International Arbitration - ARIA
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We have a document that purports to be a contract, and that purports to
contain an arbitration clause. One party, however, takes the position that he
simply never agreed to anything—or, perhaps, that as a matter of local contract
law the agreement cannot be enforced. Alternatively, he may assert that even
should there be an enforceable agreement, the arbitration clause somehow never
became part of it. Or perhaps, that while he agreed to arbitrate, he didn’t agree to
arbitrate this particular dispute—or under these particular conditions. What
happens next? Across a wide spectrum of possible factual patterns, this muchlitigated
question implicates the allocation of responsibility for decisionmaking
with respect to such questions between courts and arbitrators.
Despite its role as one of the conceptual underpinnings of the law of
international arbitration, the notion of “separability,” or the “autonomy” of the
arbitration clause, is still regularly subject to considerable misunderstanding.1 In
the United States, the occasions for error are multiplied by uncertainty as to what,
if anything, may have been added to the picture by the Supreme Court’s opinion
in First Options v. Kaplan.2 And the Supreme Court has this very Term decided
three more cases which—if not likely radically to change the terms of our
I. TOUCHING UP PRIMA PAINT
1. Under any sensible reading of Prima Paint, a person is only bound to
arbitrate a dispute if he has agreed to do so
2. “Agreement” here has no meaning that is in any way different from
the use of the term every day in the realm of contract
3. Obviously, where a container contract is alleged to be invalid, it
will frequently be the case that the validity of the agreement to
arbitrate must also be affected
4. However, quite often the unenforceability of the container agreement need
not affect the validity of the consent to arbitrate at all
5. If we can agree that the parties might wish to entrust such matters to
the arbitrators, and if any such choice would be respected – then, surely
the only remaining question is, did they in fact do so?
6. In the inevitable absence of any direct evidence going to the intent of
the parties, we are as usual forced back on default rules
7. The default rule of Prima Paint is an unremarkable and eminently
sensible one
8. Nevertheless, the rule of Prima Paint, just like any default rule, can still
be reversed by the parties
9. Void, Schmoid
10. The supposed “illegality” of a contract, too, does little more than present
the usual problem of “separability”
11. “Separability” is just a metaphor, a tag – it is not a substitute for
thought
12. Nor is “separability” merely a frolic on the part of Justice Fortas
13. State courts too must apply a rule of “separability”
II. WHAT (IF ANYTHING) IS ADDED BY FIRST OPTIONS?
14. Three separate questions will recur in connection with any arbitration –
and it is critical to keep them distinct in any analysis
15. Given this taxonomy, it is plain that the doctrine of separability continues
to be central to our law of arbitration
a. First Options v. Kaplan
b. The October 2002 Term Trilogy
16. While drafting of course is everything, the precise scope of an arbitration
clause need no longer be a matter for judicial determination
17. The term “arbitrability” can easily be dispensed with