Abstract

http://ssrn.com/abstract=2310206
 


 



A Presumptively Better Approach to Arbitrability


John A. E. Pottow


University of Michigan Law School

Jacob Brege


University of Michigan at Ann Arbor - University of Michigan Law School

Tara J. Hawley


University of Michigan Law School

August 1, 2013

Canadian Business Law Journal, Vol. 53, No. 3, March 2013
U of Michigan Law & Econ Research Paper No. 13-012
U of Michigan Public Law Research Paper No. 339

Abstract:     
One of the most complex problems in the arbitration field is the question of who decides disputes over the scope of an arbitrator’s purported authority. Courts in Canada and the United States have taken different approaches to this fundamental question of “arbitrability” that necessarily arises when one party disputes the contractual validity of the underlying “container” contract carrying the arbitration clause. If arbitration is a creature of contract, and contract is a product of consensual agreement, then any dispute that impugns the underlying consent of the parties to the container contract implicates the arbitration agreement itself (i.e., no contract, no arbitration agreement).

The U.S. approach of “separability” dates back a half-century to a Supreme Court case that was controversial when it was decided and remains so today. The Supreme Court has added several more decisions trying to clarify its arbitrability rules within just the past few years. The Canadians too have tried to sort out this mess, seizing upon the hoary legal distinction between law and fact, also offering recent Supreme Court pronouncements. Neither country’s approach is normatively or functionally satisfying.

After discussing and critiquing the two approaches comparatively, we offer our own proposal. We too deploy legal presumptions, but in our case we focus on what we contend are the two most relevant criteria: (1) the nature of the legal challenge to the underlying container contract, and (2) the type of contract at issue. Challenges to consent in contract formation and contracts involving adhesion should be specially scrutinized by the courts before carting parties off to arbitration, whereas commercial agreements between sophisticated actors should presumptively be for arbitral resolution, even for “constitutive” challenges to the underlying contract.

Number of Pages in PDF File: 38

Keywords: arbitration, authority, courts, Canada, United States (U.S.), contracts

JEL Classification: K1, K12, K41

working papers series


Download This Paper

Date posted: August 16, 2013 ; Last revised: October 8, 2013

Suggested Citation

Pottow, John A. E. and Brege, Jacob and Hawley, Tara J., A Presumptively Better Approach to Arbitrability (August 1, 2013). Canadian Business Law Journal, Vol. 53, No. 3, March 2013; U of Michigan Law & Econ Research Paper No. 13-012; U of Michigan Public Law Research Paper No. 339. Available at SSRN: http://ssrn.com/abstract=2310206 or http://dx.doi.org/10.2139/ssrn.2310206

Contact Information

John A. E. Pottow (Contact Author)
University of Michigan Law School ( email )
625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-3736 (Phone)

Jacob Brege
University of Michigan at Ann Arbor - University of Michigan Law School ( email )
625 South State Street
Ann Arbor, MI 48109-1215
United States
Tara J. Hawley
University of Michigan Law School ( email )
Feedback to SSRN


Paper statistics
Abstract Views: 516
Downloads: 112
Download Rank: 143,436

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.453 seconds