Timeliness of Arbitration Demand for the Arbitrator to Decide, Not the Court
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In G.T. Leach Builders LLC v Sapphire V.P., LP, No. 13-0497 (Tex. 2015), a complex construction-project-related dispute involving multiple parties and multiple contracts, the Texas Supreme Court recently addressed a number of important arbitration-related issues. Most notably, it reversed the intermediate court of appeals on the matter of whether the court or the arbitrator gets to decide whether the arbitration demand was timely asserted.
The Supreme Court, in an opinion by Jeff Boyd, concluded that the question is not a gateway issue of arbitrability and therefore goes to the arbitrator. This seems logically unsatisfactory, because the matter of whether a litigant has waived the right to compel arbitration by litigation conduct is and remains a matter for the court. The failure to meet the deadline to invoke or initiate arbitration is likewise a matter of conduct (omission). So why should the former be a matter of arbitrability properly passed on by the Court, but the latter a matter to be arbitrated (rather than a threshold matter of whether an arbitration referral is (still) appropriate, or has been forfeited by undue delay?
Moreover, a contractual provision setting a deadline will generally be more amenable to quick and efficient application and enforcement because it is likely unambiguous and the relevant facts are measured in days or months. Delay in quantifiable. No need for fact-intensive inquiry encompassing multiple dimensions of conduct, not to mention consideration of the amorphous “totality of the circumstances” to resolve whether the deadline has be missed. Resolution by the court would thus also conserve judicial and private resources.
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