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Supreme Court rules in international arbitration case

The US Supreme Court [official website] ruled [opinion, PDF] 7-2 Wednesday in BG Group v. Republic of Argentina [SCOTUSblog backgrounder], an international arbitration case that raises the question of whether, in disputes involving a multi-staged dispute resolution process, a court or the arbitrator determines whether a precondition to arbitration has been satisfied. The case involves a Bilateral Investment Treaty between the UK and Argentina, signed into law in 1990. The treaty provides that a dispute between an investor and a host stat will be resolved in the host state's courts, and if no timely resolution is reached, then the case proceeds to arbitration. British investor BG Group invoked the arbitration clause against Argentina without first filing in Argentine court. The panel found that it had jurisdiction and awarded damages to BG Group. Argentina then filed a motion in federal court to vacate the award. Though the district court denied the Argentina's motion to vacate the award, the US Court of Appeals for the DC Circuit [official website] reversed [opinion] in 2012 and vacated the award, prompting the appeal to the US Supreme Court. Writing for the court, Justice Stephen Breyer reversed the DC Circuit holding that, while Argentina was entitled to court review of the arbitrator's decision, the actions of the arbitrator were lawful.

The court heard oral arguments [transcript, PDF] in the case in December of. The court granted [JURIST report] BG Group's petition for certiorari [text, PDF] in June 2013 following the DC Circuit's ruling vacating the award.

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