Arbitration cannot take place in the absence of an agreement to arbitrate, but it is not always clear which particular disputes were intended by the parties to be heard in arbitration. The oft-vexed question is: Who decides this question of arbitrabilitythe courts or the arbitrators? The U.S. Court of Appeals for the Second Circuit recently issued a decision that sets out guidance on this issue, at least for parties to lawsuits in federal courts in New York, Connecticut and Vermont.
The Second Circuit case, Werner Schneider v. Thailand, decided Aug. 8, 2012, addressed the issues dealt with by the U.S. Supreme Court in First Options of Chicago v. Kaplan, 514 U.S. 938 (1995)in particular, how to apply the “clear and unmistakable” standard that determines whether a court or an arbitration panel should determine a question of arbitrability.
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