The US Supreme Court seems to be on a roll – issuing yet another pro-arbitration decision today. This one is less significant than yesterday’s decision in Ashot Yegiazaryan v. Vitaly Ivanovich Smagin, et al., which held that a foreign resident may rely on the racketeering statute, RICO, to enforce an arbitration award in the US. https://lnkd.in/ejc2DcqF
Unlike Yegiazaryan, which involved the end of the arbitration process, and the enforcement of an award, today's case, Coinbase Inc. v. Bielski concerns the beginning of the process, and a dispute about whether a case belongs in arbitration in the first place.
In Coinbase, the Supreme Court held that a district court must stay a lawsuit when a party seeking to arbitrate appeals that court’s decision denying a motion to compel arbitration.
Imagine Party A sues Party B in court and B defends claiming the case should be in arbitration, and asking the court to compel arbitration. If the court denies B’s motion to compel, A’s case remains in court and can go forward on the merits. Suppose, however, B appeals the court’s decision denying its motion to compel. At this point, there are two proceedings – A’s lawsuit before the district court on the merits, and B’s appeal in the circuit court claiming that A’s lawsuit actually belongs in arbitration.
The question before the Supreme Court boiled down to this: when B appeals a decision denying its motion to compel, does that automatically stay A’s lawsuit on the merits?
Writing for the majority, Justice Kavanagh answered that question in the affirmative, relying primarily on considerations of efficiency: ”If the district court could move forward with pre-trial and trial proceedings while the appeal on arbitrability was ongoing, then many of the asserted benefits of arbitration (efficiency, less expense, less intrusive discovery, and the like) would be irretrievably lost—even if the court of appeals later concluded that the case actually had belonged in arbitration all along.”
Justice Jackson (joined by Justices Kagan and Sotomayor and, in part, by Justice Thomas) dissented: “This mandatory-general-stay rule for interlocutory arbitrability appeals comes out of nowhere. No statute imposes it. Nor does any decision of this Court. Yet today’s majority invents a new stay rule perpetually favoring one class of litigants—defendants seeking arbitration.”
#arbitration #arbitragem #internationalarbitration #SCOTUS #supremecourt
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