The U.S. Supreme Court’s first opinion of 2019, written by recently appointed Justice Brett Kavanaugh, confirms the long-standing support of the Court for arbitrators to decide the issues of arbitrability of a dispute submitted to arbitration. The unanimous ruling defends the provisions of the Federal Arbitration Act, confirming that a contract’s terms control who decides, in the first instance, whether a dispute is subject to arbitration.
In Companion Property and Casualty Insurance Company v Allied Provident Insurance, Inc. (2014 U.S. Dist. LEXIS 136473), District Judge Nathan in the Southern District of New York (SDNY) confirmed an interim arbitration award ordering payment of security for certain contractual amounts. The judgment usefully summarizes the court’s power to review, confirm or vacate interim arbitration awards, and its power to order arbitrator replacements when one arbitrator is unable to discharge his duties due to illness.
The decision also raises important arbitration agreement drafting points, and exhibits the robust approach of New York courts in upholding the integrity of the arbitral process.