Business Law

Business Law Annual Review 2015

Annual Update of Alternative Dispute Resolution Cases

Paul J. Dubow

The cases discussed below are those issued by California courts and federal courts that have jurisdiction over California. The cases may be of interest to attorneys drafting contracts containing arbitration or mediation clauses.

BG Group PLC v. Republic of Argentina, 134 S.Ct. 1198 (2014).

The United States Supreme Court held that there is a presumption that parties intend that arbitrators, not courts, will decide disputes about the meaning and application of particular preconditions for the use of arbitration. BG Group PLC ("BG") commenced an arbitration proceeding against the Republic of Argentina (the "Republic") pursuant to a dispute resolution treaty between the United Kingdom and Argentina. The claim was based on certain financial measures that the Republic took that caused BG to suffer losses. The Republic objected to the arbitrators’ jurisdiction because the treaty required that an arbitration could only commence if the dispute had not been resolved within 18 months after the dispute was first submitted to a court of competent jurisdiction, and BG had never filed an action in court. The arbitrators ruled that the Republic had waived the precondition because the President of Argentina had issued a decree staying for 180 days the execution of any of its courts’ final judgments in suits claiming harm as a result of the new financial measures. The arbitrators issued a $185 million award in favor of BG.

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