Author: Alan Scott Rau*
Published: September 1999
Authority of the Arbitral Tribunal
Powers of Arbitrators
Arbitrators and Arbitral Tribunals
Responsibility of Arbitrators
Description: “It is the dilemma of the box within a box or, in the case of arbitration, the authority as to the decision as to the authority to make the decision.”
“[I]n no system of law should an arbitrator’s determination of jurisdiction be beyond the scope of review by a court.”
The last ten years or so have seen our Supreme Court, at a dizzying rate, busily generating precedents in the area of arbitration. Diligent academics—while struggling to keep up—are of course delighted that the raw material essential to the exercise of their craft is being continually replenished. Many of the Court’s pronouncements have been straightforward, easily parsed, unproblematical and abundantly predictable. Still others have been mysterious—but, happily, evanescent. Perhaps the most complex questions, however—and the most continually challenging—have arisen out of the Court’s 1995 opinion in First Options v. Kaplan.
The focus of the discussion here is the power of private individuals—let’s for the moment call these “arbitrators,” although that is of course the very question to be decided—to make a decision that will be binding on the parties to a contract. American procedure has been exceptionally generous in providing an abundance of devices through which challenges to arbitral authority can be raised: A judicial determination is possible not only on review after an award has been rendered, but also by means of a motion to stay an arbitration that has been initiated or threatened, or, before any proceedings at all, by a motion to stay litigation, or to compel arbitration. But whatever the timing, the ultimate question of the allocation of responsibility between courts and arbitrators remains. Who is to have the first word as to whether these putative arbitrators are empowered to decide the rights of others? And, more importantly, who is to have the final word on the subject? And if the answer to the latter question—a cheap answer, perhaps, but not an entirely inaccurate one—is “the parties themselves,” how are we to understand what the parties are telling us? And who is to translate for them? Professor Park has neatly posed the dilemma: Absent some grant of authority from the person who is to be bound by the award, “the officious intermeddlers who gave their opinion on the matter would be no more arbitrators than any of the thousands of men and women who pass through New York’s Grand Central Station each morning.”
*Robert F. Windfohr & Anne Burnet Windfohr Professor of Law, the University of Texas at Austin School of Law.