Supreme Court grants cert in another FAA-related case

Today, the United States Supreme Court granted a cert petition in Stolt-Nielsen S.A., et al., v. Animalfeeds International Corp., 548 F.3d 85 (2d Cir. 2008).  The Court agreed to decide the question originally presented but ultimately not decided in Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003) — whether imposing class arbitration on parties whose arbitration clauses are silent on that issue is consistent with the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.   In the underlying case arising out of an international maritime contract, the Second Circuit Court of Appeals held that no state or federal maritime law prohibited class arbitration when the arbitration agreement was silent and that the arbitrators must decide whether the clause permits class arbitration under the applicable state law of contract interpretation.  Thus, the Court held, the arbitrators did not manifestly disregard the law when they reached that issue and decided that the clause permitted class arbitration.

Any Supreme Court decision resulting from this case is likely to exacerbate the tension inherent in the FAA between the parties’ freedom to contract to an arbitration proceeding of their own design and fairness concerns regarding the limits of arbitrators’ authority.


2 thoughts on “Supreme Court grants cert in another FAA-related case”

  1. This will be a very interesting case not only from the domestic perspective, but from the international perspective as well. I’ve written an article that will be coming out shortly that considers the construction of arbitration agreements that are silent or ambiguous as to class treatment in the context of international enforcement. The piece, which is entitled “The Sounds of Silence: Are U.S. Arbitrators Creating Internationally Enforceable Awards When Ordering Class Arbitration in Cases of Contractual Silence or Ambiguity?” will be available in July 2009 in volume 30 of the Michigan Journal of International Law. The piece is currently available in draft form on SSRN.

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