Can Arbitrability Questions Concerning a Non-Signatory to the Arbitration Agreement Be “Delegated” to an Arbitrator?
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“Gateway” arbitration issues, including the validity, enforceability, and scope of an arbitration agreement, are presumptively to be decided by a court, rather than by an arbitrator. However, such gateway issues may be “delegated” to an arbitrator, e.g., AT&T Technologies, Inc. v. Communications Workers, 475 U.S. 643, 106 S.Ct. 1415 (1986), if the pertinent arbitration agreement clearly and unmistakably manifests the parties’ intention to do so, First Options of Chicago v. Kaplan, 514 U.S. 938, 115 S.Ct. 1920 (1985); Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 123 S.Ct. 588 (2002); Greentree Financial Corp. v. Bazzle, 539 U.S. 444, 123 S.Ct. 2402 (2003). But what if the arbitration agreement is in doubt — could such a purported delegation be enforced if one of the concerned parties did not execute the arbitration agreement in question? Spoiler alert: arguably not.
Consistent with that analysis, the Texas Supreme Court ruled in Jody James Farms v. Altman Group., 2018 Tex. LEXIS 405 (Tex. May 11, 2018), that the incorporation of AAA rules in an arbitration clause did not delegate arbitrability issues to an arbitrator when one of the parties to that dispute was a non-signatory to the arbitration agreement in question. In that circumstance, “questions related to the existence of an arbitration agreement with a non-signatory are for the court, not the arbitrator.”
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