USA Law and Practice Contributed by: Matthew Kirtland, Timothy Tyler, Katie Connolly and Taylor LeMay, Norton Rose Fulbright US LLP
In these cases, a court appoints an arbitrator or tribu - nal. The exact method of selection the court chooses depends on the circumstances in a given case. 4.3 Court Intervention 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. 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 Commonwealth Coatings Corp . v Continental Casual- ty Co ., for example, the US Supreme Court vacated an award when the arbitrator failed to disclose significant business dealings with one of the parties, including earlier advice on the project at issue in the arbitration. However, the majority was achieved through a narrow concurrence that held that only non-trivial relation - ships require disclosure – a different standard than judges are held to. This has resulted in a circuit split. Disclosure and Non-Disclosure of Potential Conflicts Failing to disclose a “trivial” relationship with a party does not require set aside or vacatur. What constitutes a “trivial” relationship is a fact-intensive inquiry into whether the non-disclosed facts create a reasonable impression of partiality, and courts in the US have adopted different standards. 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 4.5 Arbitrator Requirements Independence and Impartiality
• 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, with a stay in lieu of dismissal being mandatory under Section 3 of the FAA if requested by one of the par - ties) or at the enforcement stage (when a losing party challenges an award on the basis that the arbitrators lacked jurisdiction). 5.2 Circumstances for Court Intervention See 3.2 Arbitrability for a 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. 5. Jurisdiction 5.1 Challenges to Jurisdiction Conversely, US courts review negative decisions on jurisdiction using the same analytical framework. There is no difference in principle from arbitrators’ decisions that they have jurisdiction over the dispute.
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