Second Circuit clarifies when a case is arbitrable

United States Court of Appeals, Second Circuit.

Werner SCHNEIDER, acting in his capacity as insolvency administrator of Walter Bau AG (In Liquidation), Petitioner–Appellee,
v.
The KINGDOM OF THAILAND, Respondent–Appellant.

Docket No. 11–1458–cv. Argued: May 22, 2012.
Decided: Aug. 8, 2012.

Background: Insolvency administrator of German company brought action against Kingdom of Thailand, seeking to confirm award in arbitration proceedings stemming from bilateral investment treat between Thailand and Germany. The United States District Court for the Southern District of New York, Deborah A. Batts, J., confirmed arbitration award. Thailand appealed.

Holdings: The Court of Appeals, Wallace, Circuit Judge, held that:

(1) district court improperly refused to determine independently question of arbitrability, but

(2) Germany and Thailand clearly and unmistakably agreed to submit questions of arbitrability to arbitrator.

Affirmed.

According to attorneys at the firm of King and Spaulding, "In Schneider, the Court affirmed a district court’s confirmation of an arbitration award entered in favor of a German investor who had brought a claim under the bilateral investment treaty between Germany and Thailand. That treaty -- and its arbitration agreement -- applied with respect to 'approved investments' as that term was defined in article 8 of the treaty. When a dispute between the investor and Thailand arose, the investor commenced arbitration, and the parties agreed to terms of reference in which they agreed that the UNCITRAL Arbitration Rules would govern the arbitration."

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