|
Statute of Limitations questions raised by choice of law provisions within an arbitration agreement must be decided by an arbitrator and not by the court if the agreement is subject to the Federal Arbitration Act (FAA), according to the United States District Court for the Southern District of New York.
In Goldman, Sachs & Co. v. Griffin, No. 07 CIV. 1313 (LMM), 2007 WL 1467430 (S.D.N.Y. May 16, 2007), brokerage firm Goldman Sachs sought a permanent stay of arbitration proceedings instituted by former client Griffin. Goldman Sachs argued that Griffin's fraud, breach of duty, and breach of contract claims were barred by the New York statute of limitations.
The Court acknowledged that if New York law governed the arbitration agreement and its enforcement, the Court should decide statute of limitations questions under New York law. However, the Court found that the FAA controlled the agreement, and reasoned that the FAA "requires the opposite conclusion" on statute of limitations questions.
Applying the FAA, the Court noted that any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, and observed only a narrow exception to this presumption for "questions of arbitrability." But, quoting the narrow meaning accorded the term "questions of arbitrability" by the United States Supreme Court, the Court held that the statute of limitations questions here were "allegations of waiver, delay, or a like defense to arbitrability," a "kind of general circumstance where parties would likely expect that an arbitrator would likely decide" the issue.
The Court also noted the Second Circuit had explicitly held that "any limitations defense – whether stemming from the arbitration agreement, arbitration association rule, or state statute – is an issue to be addressed by the arbitrators."
Subscribe to a free weekly update on ADR case law and
legislation
|