Pirates (Parties) Should Arbitrate Arbitrability

Yes, the word “pirates” is an anagram for “parties.”  Participants in a lawsuit, arbitration, or mediation are collectively referred to as parties.  Are they pirates too?

Unless agreed otherwise, a judge (not an arbitrator) will interpret the scope and meaning of the arbitration provision in your construction contract.   Any such agreement must be supported by supported by “clear and unmistakable evidence.”  Such evidence may include the incorporation by reference of rules governing the arbitration process, such as JAMS, AAA, UNCITRAL, or ICC.

In December 2017, the 4th Circuit (including Virginia, West Virginia, Maryland, North Carolina, and South Carolina) joined the 1st, 5th, 8th, 9th, 10th, and D.C. Circuits (comprising 21 other jurisdictions of the U.S.) on this point.  A majority of the U.S. Federal Courts now agree on this point.

When negotiating or drafting your construction contract, consider incorporating such rules so ancillary questions (a.k.a., expensive, non-substantive issues) can be resolved more efficiently by an arbitrator without having to separately get a judge’s decision.

Simply Wireless, Inc. v. T-Mobile U.S.A., Inc., Nos. 16-1123 and 16-1166, U.S. Ct. Appeals, Fourth Circuit (Dec. 13, 2017).

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