US Supreme Court Continues Its Pro-Arbitration Approach

In late June, the U.S. Supreme Court issued back-to-back pro-arbitration decisions in two separate cases. Coinbase v. Bielski, 599 U.S. __ (June 23, 2013) involved a disagreement between the parties at the beginning of the arbitration process about whether a dispute should be resolved in court or in arbitration. The court held that when a party appeals an interlocutory order denying a motion to compel arbitration, that appeal automatically stays the pending lawsuit. This means that even after a district court has ruled that a dispute should proceed as a lawsuit in the courts rather than in arbitration, a party seeking to arbitrate can put a pause on that lawsuit simply by appealing that ruling. Yegiazaryan v. Smagin, 599 U.S. __ (June 22, 2013) involved the end of the process, and concerned the enforcement of an international arbitration award. The court held that a foreign resident was not, by virtue of that status, precluded from relying on the RICO statute to enforce an international arbitration award in the United States. Because RICO provides for the recovery of treble damages and attorney fees, this decision gives a powerful weapon to those seeking to enforce international arbitral awards in the United States.

‘Coinbase’: Disputes About Whether a Case Should Be in the Courts or Arbitration

Sometimes a party files a lawsuit in court, advancing claims that the opposing party asserts should be in arbitration. In such circumstances, the party seeking to arbitrate will typically ask the court to stay the litigation in favor of arbitration or to compel arbitration. How courts deal with such applications at the beginning of a dispute—the degree to which courts are involved, the scope of the inquiries they make, the length of the judicial process—impacts the efficacy of the arbitration process. If a party is required to spend a lot of time and money in the courts at the inception of a dispute simply to get an arbitration proceeding off the ground, arbitration would lose its appeal. Indeed, the federal policy in favor of arbitration is animated precisely by the desire “to move the parties to an arbitrable dispute out of court and into arbitration as quickly and easily as possible.” See Moses H. Cone Memorial Hospital v. Mercury Construction, 460 U.S. 1, 22 (1983).