The Eleventh Circuit upheld an arbitral award last month despite the arbitrators’ failure to make certain disclosures regarding potential sources of bias. The litigation involved a dispute between the Panama Canal Authority, the government agency responsible for the operation and management of the Panama Canal, and Grupo Unidos por el Canal, S.A., the contractor hired to construct the Panama Canal expansion. Complications with the project caused progress to be “severely delayed and disrupted,” resulting in liability disputes between the parties.
Arbitration
Ninth Circuit Holds Clause Delegating Authority to Decide Arbitrability Is Valid Even If Broader Arbitration Agreement Is Not
By Russell T. Gorkin on
Parties to an arbitration agreement sometimes choose to include a delegation clause, which is a provision that delegates to the arbitrator—rather than a court—gateway questions of arbitrability, such as whether the agreement covers a particular controversy or whether the arbitration provision is enforceable at all. See Caremark LLC v. Chickasaw Nation.
In Holley-Gallegly v. TA Operating, LLC, the Ninth Circuit recently reinforced the Supreme Court’s decade-old distinction between the analysis needed to determine whether a dispute is subject to arbitration on the one hand, and whether an arbitrator has been legally delegated the authority to make that threshold determination on the other. The decision provides important lessons to practitioners litigating disputes regarding the enforceability of delegation clauses.
Drafting an Arbitration Agreement? – Remember Four S’s
By Alexis L. Namdar & Dorothy Murray on
Last month saw the end of the second round of the UK Law Commission’s consultation on reform of the Arbitration Act 1996, the legislation which provides the framework for arbitration in England and Wales. We have reported on the current status of the consultation and are watching for the final recommendations.
Reform of the English Arbitration Act 1996: Three Areas under Scrutiny
By Alexis L. Namdar & Julia Bihary on
England is one of the most popular jurisdictions for commercial parties to resolve disputes through arbitration: London and Paris were ranked as the top two preferred cities in the world in 2022. To ensure England’s arbitration regime remains modern and competitive, the Law Commission – a body responsible for considering and recommending legislative change to the UK government – is currently considering updates to the legal framework of arbitration in England & Wales, the Arbitration Act 1996 (the Act).
Amazon Drivers Avoid Arbitration Claiming Non-delivery of Updated TOS
By Tara Brailey on
The Ninth Circuit recently issued an opinion that could shape how companies draft and revise two oft-encountered types of contracts: terms of service agreements (“TOS”) and arbitration clauses.
In Jackson v. Amazon.com, Inc., the Ninth Circuit affirmed the district court’s order denying Amazon.com, Inc.’s motion to compel arbitration in a case brought by a proposed class of “Amazon Flex” drivers. Amazon Flex is a delivery program run through a smartphone app that Amazon uses to engage individuals to make Amazon deliveries in their personal cars.
Supreme Court Rules on the Requirements for a Waiver of the Right to Arbitrate
By Sarah A. Emmerich on
The United States Supreme Court recently resolved a circuit split regarding when a party has waived its contractual right to arbitrate by participating in litigation prior to seeking to arbitrate a dispute. In Morgan v. Sundance, Inc., the Court held that the party seeking to resist arbitration does not need to show that it has been prejudiced by the other party’s delay in seeking to compel arbitration. Notably, and in holding that “the Eighth Circuit erred in conditioning a waiver of the right to arbitrate on a showing of prejudice,” the Supreme Court decided against the use of “custom-made rules, to tilt the playing field in favor of (or against) arbitration.”
Florida’s High Court Clarifies that Incorporating AAA Rules into an Arbitration Provision Delegates Arbitrability to Arbitrator
By Jared M. DuBosar on
When a litigant seeks to compel arbitration pursuant to the Federal Arbitration Act (“FAA”), there are two issues that must be resolved: (1) whether there is an agreement to arbitrate; and, if so, (2) whether the dispute at issue falls within the scope of the arbitration agreement. The Florida Supreme Court’s recent decision in Airbnb, Inc. v. Doe, deals with who decides this second issue—the court or an arbitrator.
In Airbnb, a couple sued Airbnb and Wayne Natt (the property owner) for issues arising out of their stay at Natt’s condominium, which was listed for rent on Airbnb’s website. Airbnb moved to compel arbitration, arguing that the couple was required to arbitrate their claims because Airbnb’s Terms of Service included an arbitration provision that integrated the AAA Rules. All parties agreed that the couple was bound by the arbitration agreement—the issue then became whether the court or the arbitrator should decide if the couple’s claims against Airbnb were arbitrable.
Supreme Court Limits Federal Court Jurisdiction to Vacate or Confirm Arbitration Awards
By Jake R. Butwin on
In an 8-1 decision, the United States Supreme Court recently held in Badgerow v. Walters that federal courts may not examine the substance of arbitration disputes to establish federal question jurisdiction under Sections 9 and 10 of the Federal Arbitration Act (the “FAA”). Not only did this decision resolve a circuit split, it, in essence, shifted more responsibility to state courts to confirm or vacate arbitration awards.