The Rules Governing Who Decides Jurisdictional Issues: First Options v. Kaplan Revisited – Vol. 20 No. 2

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Author: Steven H. Reisberg*

Published: July 2010

Commercial Disputes



This article addresses one of the fundamental issues at the core of arbitration jurisprudence: Who — the court or the arbitrator — is to decide whether a person is required to arbitrate a particular dispute? As will be shown, the rules that govern the “who is to decide” question once were well defined. Today, however, there exists significant confusion as to how a court is to decide which forum, the court or the arbitrator, has the jurisdiction to decide this threshold issue. The current confusion can be traced directly to the Supreme Court’s decision in First Options of Chicago, Inc. v. Kaplan. One goal of this article is to identify the well-defined legal rules that once governed the analysis of this threshold question. This article will also show how the use by the Supreme Court of the term “arbitrability” in First Options has introduced significant confusion into the law of arbitration and obscured these once-clear governing rules.

Whether a party is required to submit a particular dispute to arbitration may contain within it two completely distinct legal issues. First, a party may be objecting to arbitration on the ground that no valid, enforceable arbitration agreement exists between the parties. Second, and alternatively, a party may be arguing that the particular dispute does not fall within the scope of the arbitration agreement. The distinction between these two objections to arbitration is critical, because each is governed by its own separate set of legal rules that govern “who,” meaning which forum — the court or the arbitrator — is to adjudicate such objection to arbitration.

Courts repeatedly recognize that the issue of who has the jurisdiction to decide the “question of arbitrability” is a threshold issue. However, the use of the term “arbitrability” in the framing of this question has introduced and is the source of substantial confusion. This is because the term “arbitrability,” as used by courts and commentators alike, can refer to both of the two above-noted very different objections to arbitration. If there is no valid and enforceable arbitration agreement between the parties, then neither can be required to arbitrate the dispute.

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*Steven H. Reisberg is a partner at Willkie Farr & Gallagher LLP. Special thanks to Emma-Ann Deacon, Esq. and Joshua Nahum, Esq. for their assistance with the preparation of this article. © Steven H. Reisberg 2009.