Questions of arbitral venue, even in international arbitration, are presumptively for the arbitrator to decide. The court so ruled despite arguments from an Israeli company that the arbitrator’s interpretation of an arbitration agreement with an American company violated Article V of the New York Convention and Section 10(a)(4) of the Federal Arbitration Act. The court’s decision was guided by a set of presumptions regarding the intent of the arbitrating parties. On the one hand, courts presume the parties intend courts to determine issues of “arbitrability” (i.e., whether the parties are bound by an arbitration clause or whether an arbitration clause applies to a particular controversy), but on the other, arbitrators are presumed to be the intended deciders regarding the “meaning and application of particular procedural preconditions for the use of arbitration.”
The court held that disputes over the interpretation of forum selection clauses presumptively fall into the latter category, because they are disputes over where an arbitration is conducted, not whether it is conducted. Therefore, when an arbitrator “even arguably” engages with the language of the venue provision in making his determination, the court must defer to that determination, “however good, bad, or ugly.” The court noted, however, that if the parties do not want the arbitrator determining the arbitral venue, they may limit the issues they choose to arbitrate. Bamberger Rosenheim 11th Cir 7.17.17, Case No. 16-16163 (11th Cir. July 17, 2017).
This post written by Benjamin E. Stearns.
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