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Supreme Court Agrees to Hear Class Arbitration Case

The Supreme Court recently granted certiorari in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., Docket No. 08-1198, to resolve a circuit split regarding class action arbitrations. In the case, the Court will consider whether, consistent with the Federal Arbitration Act, parties can be sent to class arbitration when the parties' arbitration clause is silent on the issue.

The appeal is taken from the Second Circuit's decision that held that interpreting such an arbitration clause to permit class arbitration did not "manifestly disregard the law," as the parties' contract provided that the scope of the arbitration clause was for the arbitrators to decide.

The Workplace Prof Blog has posted its take on why the Court should hold that a silent arbitration agreement does not preclude class actions, and also expresses concern that the Court will decide the case on narrower grounds.

The ADR Profs Blog opines that "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."

Stay tuned to the National Arbitration Forum Blog for updates on this case.

Full post as published by National Arbitration Forum Blog on June 18, 2009 (boomark / email).