March 28, 2014
On March 5, 2014, the Supreme Court issued its decision in BG Group PLC v. Republic of Argentina. The question in this case is whether, in disputes involving a multi-staged dispute resolution process, a court or the arbitrator determines whether a precondition to arbitration has been satis?ed.
In a 7-2 opinion delivered by Justice Breyer, the Court held that, when reviewing an arbitration award made under an international treaty, U.S. courts should interpret and apply "threshold" provisions concerning arbitration using the framework developed for interpreting similar provisions in ordinary contracts. Under that framework, the local litigation requirement is a matter for arbitrators primarily to interpret and apply, and courts should review their interpretation with deference.
The opinion of the Court of Appeals for the District of Columbia Circuit was reversed. Justices Scalia, Thomas, Ginsburg, Alito, and Kagan joined in the opinion of the Court. Justice Sotomayor joined except for Part IV-A-1. Justice Sotomayor filed an opinion concurring in part. Chief Justice Roberts filed a dissenting opinion, which Justice Kennedy joined.
To discuss the case, we have Erika Birg, who is a partner at Nelson Mullins.