USA Law and Practice Contributed by: Matthew H. Kirtland, Timothy Tyler, Katie Connolly and Taylor LeMay, Norton Rose Fulbright
The Supreme Court has held that, under the FAA, the question as to which forum – court or arbitrator – has the primary power to decide arbitrability depends upon whether the parties agreed to submit the arbitra - bility issue to the arbitrator. If arbitrability is delegated to an arbitrator then courts will defer to the arbitra - tor. However, if there is no clear delegation of author - ity then courts will determine the arbitrability of the dispute. In other words, courts presume that parties intend courts (not arbitrators) to decide questions of “arbitrability” unless clearly and unmistakably agreed otherwise. Questions of arbitrability include (i) whether the parties are bound by an arbitration clause and (ii) whether a concededly binding arbitration clause applies to a certain type of controversy. These com - prise whether the arbitration agreement was formed, whether an arbitration agreement applies to a non- signatory, and similar threshold issues. US courts find clear and unmistakable delegation when parties incorporate arbitration rules that del - egate the question of arbitrability to the arbitrators, as do most if not all modern arbitration rules. Express carve-outs from a delegation clause have been held to impair otherwise clear and unmistakable delegations of arbitrability to arbitrators. 3.3 National Courts’ Approach Recent US court rulings are mixed on the law govern - ing an arbitration agreement where no such law has been specified by the parties. The law applicable to the existence or validity of an arbitration agreement depends on the type of alleged defect in the agree - ment. Some US courts have held that where an agreement contains a general choice-of-law clause and the arbi - tration agreement does not contain a choice-of-law provision but provides for a foreign-seated arbitration, the arbitration agreement creates a strong presump - tion that the law of the seat of the arbitration governs the arbitration agreement. Some courts have recog - nised that an arbitration agreement is governed by the contract law of the state whose laws otherwise apply to it. Some US courts have held that if a challenge is based on a party’s alleged lack of capacity, the appli - cable law is determined by the law “applicable to the party”, not the law governing the parties’ agreement
or the law of the seat of the arbitration agreement. Other US courts have held that the parties’ agree - ment’s general choice-of-law clause will generally govern the dispute. 3.4 Validity While the FAA is silent on the question of severability, the US Supreme Court has consistently held that an arbitration provision is severable from the remainder of the contract. 4. The Arbitral Tribunal 4.1 Limits on Selection The FAA does not limit the parties’ autonomy to select arbitrators. 4.2 Default Procedures The FAA provides a default procedure for appointing arbitrators if no method is provided, if a method is provided for and any party fails to avail itself of the method, or if for any other reason there is a lapse or breakdown, in the naming of an arbitrator: a court appoints an arbitrator or tribunal. The exact method of selection the court chooses depends on the circum - Under the FAA, courts do not generally intervene in the selection of arbitrators except as noted in 4.2 Default Procedures . 4.4 Challenge and Removal of Arbitrators The FAA is silent on challenges to arbitrators or their removal while the arbitration is pending. Although the US Supreme Court has not decided this precise ques - tion, the prevailing understanding is that the FAA’s silence precludes courts from intervening before an award is rendered, including for arbitrator challenges. stances in a given case. 4.3 Court Intervention
4.5 Arbitrator Requirements Independence and Impartiality
In contrast to the UNCITRAL Model Law, the FAA does not expressly require arbitrator independence and impartiality. The FAA does provide that an award can be set aside, or vacated, for excess of authority, “evident partiality” or corruption of the arbitrators. In
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