The Enforceability Of Arbitration Agreements

As a general rule, the parties are free to enter into all agreements to which they wish to commit, with very limited exceptions. These include arbitration agreements. Article II, paragraph 3, states that „when it has brought a legal action in a case for which the parties have entered into an arbitration agreement, it refers the parties to arbitration proceedings at the request of either party.“ (Added highlight.) New York courts are supportive of the enforcement of arbitration awards and, in accordance with international practice, are designed for limited grounds of expulsion. With respect to the question of whether Mr. Heller`s class action should be stayed in favour of arbitration, the majority considered the provision of the Arbitration Act, which allows a court not to interpret a civil proceeding in favour of arbitration proceedings if the arbitration agreement is invalid. The majority approved the framework set out in its pre-Dell decision that, in accordance with the principle of jurisdiction, all challenges to the jurisdiction of an arbitral tribunal should normally be referred to the Tribunal, unless they raise: (i) purely legal issues; or (ii) mixed facts and law issues that require only a cursory examination of the evidence presented in the record1. The majority stated that the second part of the Dell test will only be available if „the necessary legal conclusions can be drawn from facts that are obvious on the basis of protocol or that are not disputed by the parties.“ 2 However, in deciding Uber`s appeal, the majority stated that there were „abnormal“ cases that are not foreseen under Dell and raise issues requiring a departure from the normal application of the jurisdictional principle, the Uber case being one of them. In particular, a court can determine the validity of the agreement if aspects of an arbitration agreement effectively protect the agreement from a challenge. To ensure that only the remedies of the courts with the validity of good faith are considered, the Tribunal must find that (i) the jurisdiction of arbitration is seriously challenged and (ii) there is a real prospect that the challenge can never be accepted if a stay is granted.