Existence of the Arbitration Agreement to be Decided by the Courts | ZFZ Postcard Cases

In two recent decisions, the US Court of Appeals for the Third and Tenth Circuit affirmed that the question whether a valid arbitration agreement exists in the first place is for the courts to decide, even if the arbitration agreement contains a delegation clause (ie. an agreement to arbitrate arbitrability).

As explained by the Third Circuit, it can hardly be said that contracting parties clearly and unmistakably agreed to have an arbitrator decide on arbitrability when the existence of the delegation clause itself is in dispute (in the case at hand for alleged fraudulent behavior; MZM Construction Co. Inc. v. NJ Building Laborers Statewide Benefits Funds, US Court of Appeals, 3rd Circuit, 14 September 2020, Docket No. 18-3791).

Along the same lines, the Tenth Circuit held that the issue of whether an arbitration agreement was formed in the first place must be determined by the courts, even in the absence of a specific challenge of the delegation clause (Fedor v. United Healthcare, US Court of Appeals, 10th Circuit, 16 September 2020, Docket No. 19-2066).

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