AAA Supports USSC Cert. Petition in BG Group V. Argentina
SUPREME COURT DEVELOPMENTS
Despite the fact that it has done so only very rarely in its history, the American Arbi - tra tion Asso ciation (AAA) has filed an amicus curiae brief in support of a petition for U.S. Supreme Court review.
The decision in question, made on Jan. 17, 2012, by the U.S. Court of Appeals for the District of Columbia Circuit in BG Group v. Republic of Argentina (No. 12-138), concerns an international award in BG Group's favor that had been issued in an in - vestment arbitration conducted pursuant to the 1990 bilateral investment treaty (BIT) between the United King dom and the Republic of Ar - gentina. The D.C. Circuit's decision reversed the order of the district court enforcing the award and then vacated the award on the ground that the tribunal had ignored a condition precedent to arbitration in the BIT (an 18-month local litigation requirement) and therefore lacked jurisdiction.
The appeals court explicitly stated that satisfaction of a condition precedent is a "question of arbitrability" to be decided by the courts. In this case it refused to apply the widely accepted principle that the BIT's incorporation by reference of the UNCITRAL Arbitration Rules, which clearly places responsibility for issues concerning the arbitrators' jurisdiction in the lap of the arbitral tribunal, indicates that the parties intended to have arbitrators decide issues of arbitrability. It reasoned that the UNCITRAL rules do not come into play until after the condition precedent has been satisfied.
On July 27, 2012, BG Group filed a petition for certiorari with the U.S. Supreme Court, arguing that the D.C. Circuit's ruling violates Su - preme Court precedent, is hostile to arbitration, and contributes to a conflict with the majority of federal circuit courts. BG Group argued that the decision would open "the floodgate of litigation" seeking to "delay, derail or frustrate arbitration," undermining the federal policy favoring arbitration, and nullifying arbitration's benefits.
The AAA decided to support the petition for review because the D.C. Circuit decision "raises issues of great concern to the development of arbitration law in the United States, the future of the United States as a place of arbitration, and the confidence of users that courts will interpret and enforce the AAA's various arbitration rules in a predictable manner."
The AAA's motion, filed on Aug. …