• Arbitration: BG Group Decision: U.S. Supreme Court Holds that Failure to Fulfill Preconditions to Arbitration Are Generally for Arbitrators, Not Courts, to Decide and Court Review is Deferential
  • March 11, 2014
  • Law Firm: Sullivan Cromwell LLP - New York Office
  • Arbitration clauses commonly include preconditions to commencing arbitration, such as time periods during which the parties are to attempt to resolve the dispute through negotiation or mediation. The U.S. Supreme Court on March 5 decided 7-2 that the arbitrators in investment treaty arbitrations, not courts, are generally to decide whether such preconditions have been satisfied or may be skipped, and that courts may review such decisions only under a deferential standard of review. Rejecting the position advanced by the United States as an amicus curiae, the Court held that arbitration clauses in investment treaties normally are to be interpreted under the same rules that apply to contracts, including various presumptions about the parties’ intent that the Court has developed in contract cases. BG Group plc v. Republic of Argentina, No. 12-138, 572 U.S. --- (March 5, 2014).