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U.S. Supreme Court's Holding on the Actionability of the Validity of Contract and Arbitration Agreement

  • DONG-A LAW REVIEW
  • 2011, (50), pp.417-445
  • Publisher : The Institute for Legal Studies Dong-A University
  • Research Area : Social Science > Law

김상만 1

1경남대학교

Accredited

ABSTRACT

Arbitration is the way of resolving disputes by arbitrators instead of a court. To submit to arbitration, there should be a valid arbitration agreement between the parties in which the parties agree to settle the dispute by arbitration. An arbitration agreement, aka ‘arbitration provision’, is a written agreement to submit present or future disputes to arbitration. In international dispute resolution, generally an arbitration is preferred for its advantages such as speed, confidentiality, professionality, etc. Futhermore a foreign arbitral award is more recognized and enforced for UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The court shall dismiss the suit, when there is arbitration agreement under the contract or transaction charged. However, it is arguable whether the court can decide whether arbitration agreement is valid, or whether the contract is valid. Korea Arbitration Act and Model Arbitration Act imply that arbitrators shall decide both the validity of the contract and the validity of arbitration agreement. U.S. Federal Arbitration Act does not state who shall decide the validity of the contract, but states that a federal court shall decide the validity of arbitration agreement. U.S. Supreme Court expressed its holding as follows in Buckeye Check Cashing v. Cardegna(2006) ; 1) As a matter of substantive federal arbitration law, arbitration clause is severable from the remainder of the contract 2) Unless the challenge is to the arbitration clause itself, the issue of the contract's validity shall be considered by the arbitrator 3) The issue of the arbitration agreement's validity shall be considered by a court. However, it is presumed under Korea Arbitration Act that the issue of the arbitration agreement's validity shall be considered by arbitrators. It seems to be more reasonable that the arbitration agreement's validity be considered by a court rather than arbitrators. Therefore, U.S. Supreme Court's holding is meaningful is in this respect.

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