Answer ... This is a matter addressed by the relevant arbitral rules. Under American Arbitration Association Rule R-7, “[a] party must object to the jurisdiction of the arbitrator or to the arbitrability of a claim or counterclaim no later than the filing of the answering statement to the claim or counterclaim that gives rise to the objection. The arbitrator may rule on such objections as a preliminary matter, or as part of the final award”.
Answer ... The parties to a contract can agree to arbitrate so-called ‘gateway’ questions, including:
- whether a valid agreement to arbitrate exists; and
- whether the particular dispute sought to be arbitrated falls within the scope of the arbitration clause.
However, courts cannot assume that the parties agreed to arbitrate these issues absent “clear and unmistakable evidence that they did so” (Rent-A-Center, West, Inc v Jackson, 561 US 63, 79 (2010)). Most of the leading institutional arbitral rules provide that the arbitral tribunal is competent to resolve questions about its own jurisdiction (eg, see Rule 8.1 of the International Institute for Conflict Prevention and Resolution (CPR) Rules for Non-Administered Arbitration (effective 1 March 2018)). Courts have held that when the parties incorporate such rules into their agreement to arbitrate, the incorporation constitutes “clear and unmistakable” proof of an intention to delegate questions of arbitrability to the tribunal (Galilea, LLC v AGCS Marine Ins Co, 879 F3 d 1052 (9th Cir 2018).
The Supreme Court recently granted certiorari to determine whether the FAA allows a court to decline to enforce an agreement delegating questions of arbitrability to an arbitrator if the court concludes that the claim of arbitrability is “wholly groundless” (Henry Schein, Inc v Archer and White Sales, Inc, No 17-1272, 2018 WL 1280843 (25 June 2018)).
Answer ... As noted, the arbitral tribunal has the authority to decide its own jurisdiction if the parties have “clearly and unmistakably” agreed to give it this authority (First Options of Chicago, Inc v Kaplan, 514 US 938, 943 (1996); BG Group PLC v Republic of Argentina, 134 S Ct 1198, 1207 (2014)). Where the parties have agreed that an issue is for the arbitrators to decide, the court will defer to the arbitral resolution of the question (Oxford Health Plans LLC v Sutter, 133 S Ct 2064, 2068 (2013)). Nonetheless, the court will “make up its mind about [an issue] independently” where the parties did not agree the issue should be arbitrated (First Options, 514 US at 942).