'Wholly Groundless' Arbitration Exception Gets Grounded

By Charles Patrizia, Joseph Profaizer, Igor Timofeyev and Adam Weiss (January 9, 2019, 4:15 PM EST) -- On Jan. 8, 2018, the U.S. Supreme Court issued a unanimous decision holding that federal courts must categorically enforce a contractual provision delegating to an arbitral tribunal the question of whether the dispute must be arbitrated.[1] In doing so, the court resolved a deep split among the federal courts of appeals. Reversing the position adopted by the majority of the circuits, the Supreme Court held that when a contract expressly delegates to the arbitral tribunal the question of "arbitrability" — that is, whether an arbitration agreement applies to a particular dispute — courts may not resolve that question themselves, even if the underlying arbitrability argument is allegedly "wholly groundless." The Supreme Court's decision is significant for parties who are drafting, or who might litigate the scope of, arbitration agreements in their commercial contracts....

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