An arbitration provision providing that “all controversies which may arise between the parties” was sufficiently broad and clear to require disputes related to the arbitration panel’s jurisdiction to be settled by the arbitration panel itself. “The question of who decides arbitrability is itself a question of contract.” “In determining whether the arbitrability of a dispute is to be resolved by the court or the arbitrator, the arbitration agreement is determinative.” In determining whether the parties have agreed “to arbitrate arbitrability,” a court should require “clear and unmistakable evidence that they did so.”
The Southern District of New York ruled that this “clear and unmistakable” standard was satisfied by the contract’s delegation of “all controversies” to the “exclusive jurisdiction” of the arbitration panel. “The Court finds that the meaning of this provision is plain indeed: any and all controversies are to be determined by arbitration. The wording is inclusive, categorical, unconditional, and unlimited.”
Having found that the arbitration panel had jurisdiction over the dispute, the court next addressed the argument that the panel had “manifestly disregarded” the law in its interpretation of the underlying contract at issue, sufficient to warrant vacatur of the panel’s award. The court noted that the Second Circuit follows a three-part test in evaluating such claims: (1) the law allegedly ignored must have been clear and explicitly applicable to the matter before the arbitrators; (2) disregard of the law must have led to an erroneous outcome; and (3) the arbitrators must have known of the law’s existence and its applicability to the case, and must have disregarded it intentionally. The court found that the litigant fell well short of satisfying that standard. A “straightforward dispute over contractual interpretation” is “precisely the sort of Panel determination to which the Court is required to defer.” There was no support for the argument that the panel ignored clear and explicitly applicable law or any evidence of the panel’s subjective intent to disregard the law. As such, the court confirmed the panel’s award.
Katalyst Securities LLC v. Marker Therapeutics Inc., No. 1:21-cv-08005 (S.D.N.Y. Mar. 9, 2022).
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