USA – FLORIDA Trends and Developments Contributed by: Harry Burnett, Barry Kamar, Renzo Seminario Córdova and Marcio Vasconcellos, King & Spalding LLP
On appeal, the Eleventh Circuit affirmed the district court and agreed with other sister circuits in finding that equitable tolling is an “extraordinary remedy” available in “extraordinary circumstances” ( NuVasive at 871). The remedy is “appropriate when a movant untimely files because of extraordinary circumstances that are both beyond his control and unavoidable even with diligence”, which the Court explains as “reason - able diligence” (at 875–6). Here, the Court found (at 876) that Absolute Medical’s “cover-up” constituted extraordinary circumstances, and that NuVasive “could not have known about the text messages” at the time they were sent and “acted quickly once it learned about the text messages”. While the decision obviously increases the vacatur window, it would be a mistake to see it as an anti- arbitration ruling. It is of course eminently sensible to allow parties to seek redress for fraudulent behav - iour even after the three-month statutory period has lapsed. Delegation of gateway issues of arbitrability An issue that is often baffling to non-US practitioners is that, unlike most modern arbitration statutes and the UNCITRAL Model Law, the FAA does not contain a statutory provision corresponding to the principle of competence-competence. Thus, unlike most legal systems in the world, in the United States courts will ordinarily decide the validity of the parties’ agreement to arbitrate and the so-called “gateway” or “thresh - old” issues of arbitrability, which include both objec - tive and subjective arbitrability. However, contract - ing parties are permitted to delegate those gateway issues from the courts to the arbitrators, provided they do so “clearly and unmistakably”. See, eg, First Options of Chicago, Inc. v Kaplan , 514 U.S. 938, 944 (1995) (“Courts should not assume that the parties agreed to arbitrate arbitrability unless there is ‘clea[r] and unmistakabl[e]’ evidence that they did so”). The selection of institutional rules that include provisions corresponding to the principle of competence-com - petence is often regarded as “clear and unmistak - able evidence” of the parties’ intent to delegate the gateway issues of arbitrability from the courts to the arbitrators. See, eg, Terminix Intern. Co., LP v Palm- er Ranch Ltd. P’ship , 432 F.3d 1327, 1332 (11th Cir. 2005) (“[b]y incorporating the AAA Rules, including
Rule 8, into their agreement, the parties clearly and unmistakably agreed that the arbitrator should decide whether the arbitration clause is valid”). The Eleventh Circuit revisited those issues in Bam- berger Rosenheim, Ltd., (Israel) v OA Dev., Inc., (United States) , 862 F.3d 1284 (11th Cir. 2017). In Bamberger , an Israeli company (Profimex) entered into a solici - tation agreement with a Georgia company (OAD) to assist in sourcing and financing US real estate invest - ments. The agreement included an arbitration clause that incorporated the ICC Rules of Arbitration and pro - vided that any such arbitration “shall take place in Tel Aviv, Israel, in the event the dispute is submitted by OAD, and in Atlanta, Georgia, in the event the dispute is submitted by Profimex” ( Bamberger at 1286). Pur - suant to this agreement to arbitrate, Profimex com - menced arbitration in Atlanta for breach of contract and OAD counterclaimed for defamation in the same arbitration. Profimex objected to the counterclaims in Atlanta, arguing that a dispute submitted by OAD must be arbitrated in Tel Aviv, in accordance with the arbitration clause. The arbitrator determined that the venue for the defamation counterclaim was proper in Atlanta because the “dispute” had been submit - ted by Profimex, and ultimately found Profimex liable on OAD’s defamation counterclaim. Profimex filed a petition to vacate the arbitrator’s defamation award in federal district court, OAD filed a cross-petition to confirm the award, and the district court held in OAD’s favour and confirmed the award. On appeal, the Eleventh Circuit noted that the issue was “whether this Court must defer to the arbitra - tor’s venue determination” ( Bamberger at 1287). The Eleventh Circuit noted that “[o]n the one hand, courts presume that the parties intend courts, not arbitrators, to decide what we have called disputes about ‘arbi - trability’”, which include “questions such as ‘whether the parties are bound by a given arbitration clause,’ or ‘whether an arbitration clause in a concededly binding contract applies to a particular type of controversy’” (at 1288) (quoting Howsam v Dean Witter Reynolds, Inc. , 537 U.S. 79, 84 (2002)). However, the Court con - tinued, “[o]n the other hand, courts presume that the parties intend arbitrators, not courts, to decide dis - putes about the meaning and application of particular procedural preconditions for the use of arbitration”. In
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