Arbitrability

If the subject matter of a particular dispute falls within the scope of subjects that the parties agreed in advance to arbitrate, then the particular dispute is “arbitrable.” However, many disputes involve multiple issues, not all of which were contemplated when the arbitration agreement was executed. For example, a claim may state an arbitrable issue of wrongful discharge from employment. But the defense may raise an issue of untimely filing of the claim or some other procedural error or fatal flaw on the part of the complainant. Who decides that?

Most federal and state appellate court decisions have concluded that the only proper inquiry that a court should make, on a motion to compel arbitration, is (1) whether there exists a valid agreement to arbitrate between the parties, and (2) whether the agreement covers the dispute at hand. All other issues, particularly defenses such as untimeliness, collateral estoppel, res judicata, etc., should properly be decided by the arbitrator.

If such an event should occur (the raising of an issue not related to the subject matter of the dispute at hand), the arbitrator may render one decision covering all or may be forced to render a separate opinion on the “arbitrability” of the separate claim or defense, without ever reaching the main issue of the dispute. Still, sometimes the arbitrability of the main issue is, in itself, the actual dispute, as often occurs in labor contracts.


Inside Arbitrability