USA Law and Practice Contributed by: Matthew H. Kirtland, Timothy Tyler, Katie Connolly and Taylor LeMay, Norton Rose Fulbright
5.2 Circumstances for Court Intervention See 3.2 Arbitrability for detailed discussion of arbi - trability. Once arbitrability is established, all doubts concerning the scope of arbitrable issues are resolved in favour of arbitration. For example, courts presume arbitrators decide disputes over procedural gateway matters like waiver, delay and similar defences. Simi - larly, courts presume arbitrators decide whether con - ditions precedent to arbitration have been fulfilled, like time limits, notice, laches and estoppel. Conversely, US courts review negative decisions on jurisdiction using the same analytical framework described above. There is no difference in principle from arbitrators’ decisions that they have jurisdiction over the dispute. Given how narrow the issue of arbitrability is, in prac - tical terms, US courts’ review of arbitral rulings on jurisdiction tends to be narrow. 5.3 Timing of Challenge Even before an arbitration has been filed, parties can challenge the putative jurisdiction of an arbitral tribu - nal by filing suit in a US court instead of participating in the arbitration. After an arbitration has been filed, if a party partici - pates in an arbitration on the merits without expressly objecting to arbitral jurisdiction, the party risks waiving its right to challenge arbitral jurisdiction. However, if that party files an objection to the tribunal’s jurisdic - tion and then participates, the jurisdictional objection is preserved for later court review. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility The standard of judicial review for questions of juris - diction and admissibility depends on the parties’ agreement about delegation and whether the thresh - old issue of arbitrability is at issue (discussed in 3.2 Arbitrability ). Generally, such determinations are made de novo. As noted in 5.2 Circumstances for Court Interven- tion , once arbitrability is determined in favour of arbi - trations, courts will review arbitrators’ decisions on admissibility and jurisdiction deferentially.
Commonwealth Coatings v Continental Coatings , the US Supreme Court vacated an award when the arbi - trator failed to disclose significant business dealings with one of the parties, including earlier advice on the project at issue in the arbitration. The Court did not require proof of actual bias. Disclosure and Non-Disclosure of Potential Conflicts Failing to disclose a “trivial” relationship with a par - ty does not require set aside or vacatur. Just what constitutes a “trivial” relationship is a fact-intensive inquiry into whether the non-disclosed facts create a reasonable impression of partiality. Factors include: • the extent of the arbitrator’s personal or pecuniary interest; • how direct or attenuated the relationship is with the dispute and/or parties; and • the proximity in time of the contended connection with the arbitration and/or parties. Institution Rules and Effect on Enforcement While institutional rules and guidelines require an arbi - trator to be and remain independent and impartial and make relevant disclosures, and have a mechanism for challenging an arbitrator’s appointment or continued service, a violation of an institution’s rules is not dis - positive of whether there was a violation of the FAA. While the FAA is silent on whether a tribunal may rule on a challenge to its own jurisdiction, US courts rec - ognise the principle of competence-competence – a tribunal’s right to decide its own jurisdiction – so long as the parties’ agreement clearly and unmistakably grants the tribunal this power. However, a challenge to arbitrators’ jurisdiction can also be brought in court either before arbitration (when the court may enforce the arbitration agreement by dismissing or staying the competing court case) or at the enforcement stage (when a losing party challenges an award on the basis that the arbitrators lacked juris - diction). 5. Jurisdiction 5.1 Challenges to Jurisdiction
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