Chapter 8 - § 8.4 • WHO DECIDES ISSUES OF ARBITRABILITY? AGREEMENT OF THE PARTIES
| Jurisdiction | Colorado |
The answer to the question of "who has the primary power to decide arbitrability" may turn upon what the parties agreed to.14 Courts should not assume that the parties agreed to arbitrate issues of arbitrability unless there is clear and unmistakable evidence that they did so.15 However, it is generally accepted that if it is clear and unmistakable that the parties intended that the arbitrator is to determine some or all arbitrability issues, the agreement will be enforced, unless the applicable statute prohibits enforcement.
§ 8.4.1—Agreements Under The CRUAA
The CRUAA, C.R.S. § 13-22-206 (2016), creates both a "substantive and procedural" framework for the parties to agree as to who decides issues of arbitration.
• Substantive arbitrability. C.R.S. § 13-22-206(2): "The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate." However, under § 204, the parties may grant that authority to the arbitrator.
• Procedural arbitrability. C.R.S. § 13-22-206(3): "An arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled and whether a contract containing a valid agreement to arbitrate is enforceable." The arbitrator decides whether prerequisites, such as time limits, notices, laches, estoppel, and conditions precedent to an obligation to arbitrate have been met. However, under § 204, the parties may waive § 206(3).
Section 206 of the CRUAA generally reflects the case law under the FAA and CUAA defining that the parties can agree that the arbitrator determines issues of arbitrability, subject to § 207. But, as to procedural issues of arbitrability, can the parties agree that the court shall decide?
When arbitration rules, e.g., of the AAA, are incorporated into the parties' agreement to arbitrate, they are part of the agreement as if set forth in full. See §§ 3.2, 4.5.3-4.5.4, and 5.7.1. Rule R-7 of the AAA's Commercial Arbitration Rules and Rule R-9 of the Construction Arbitration Rules, when incorporated, are the agreement of the parties to submit arbitrability questions to the arbitrator. See § 8.4.3.
Subject to the discussion below, and speaking very generally, if the arbitration agreement is silent on who decides, the court has jurisdiction over issues of substantive arbitrability.
• If the arbitration agreement provides that the arbitrator is to determine the issues of arbitrability, the courts usually will defer to the arbitrator.16 This means that if the issues are raised in a motion to compel or stay arbitration, the court may direct the parties to commence the arbitration for a ruling on these issues before it rules on the motion.
• If the agreement is silent, and the issues are presented to the arbitrator, the finality of the arbitrator's decision might not be as defined in the vacation of award statutes, but perhaps subject to de novo review. On the other hand, the actions of the parties may be construed as agreement to determination by the arbitrator.
§ 8.4.2—Agreements Under The FAA
Many of the principles of who decides which issues have been delineated by the U.S. Supreme Court and are covered throughout this chapter.
Whether the parties have agreed to submit a particular dispute to arbitration is typically an issue for judicial determination defined the basic principal:17
[A] court may order arbitration of a particular dispute only where the court is satisfied that the parties agreed to arbitrate the dispute. . . . To satisfy itself that such an agreement exists, the court must resolve any issue that calls into question the formation or applicability of the specific arbitration clause that a party seeks to have the court enforce. . . . Where there is no provision validly committing them to an arbitrator, . . . these issues...
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