Arbitration & Mediation

Analysis of Stolt-Nielsen Dissent (Ginsberg, Stevens & Breyer)

By Christopher B. Hopkins, Esq.

We covered the majority opinion of Stolt-Nielsen v. AnimalFeeds International Corp. last week. This post will analyze the dissent.

The dissent takes the position that the Court should have denied the case on procedural as well as substantive grounds -- castigating the opinion as "premature" and "indulging."

Procedurally, the dissent avers that the arbitration panel only issued a "clause construction award" which was "abstract and highly interlocutory" and therefore not justifying judicial intervention. In simpler terms, the dissent felt that the Panel's decision was more like an order which would not meet the standards for an appeal. The fact that the Panel slapped the label "award" on the paper did not, in their perspective, merit the finality of a reviewable decision (the dissent claims, "it cannot be true that parties or arbitrators can gain instant review by slicing off a preliminary decision or procedural order and declaring its resolution a 'partial award'").

Substantively, the dissent claimed that the arbitration panel was specifically asked by the parties to interpret the clause and therefore, even if their decision failed due to "serious error," it still was not an act of exceeding their power. Various alternative options or "stopping points" were suggested.

Of note, this was a 5-3 decision with Justice Sotomayor sitting out. Retiring Justice Kennedy was among the majority. Assuming, as it has been argued, that this is an ideological split in the Court, one might speculate that Justice Sotomayor would have joined the liberal dissenters, thus making an even 4-4 division (removing Kennedy from the equation). If that is correct, then Justice Kennedy's forthcoming replacement could make an interesting impact on future arbitration decisions since neither the now-discredited Green Tree v. Bazzle or Stolt-Nielsen set a controlling precedent.

We'll let this sink in for a few days and then provide an overview of the analysis from various scholars, courtwatchers, lawyers, and the media.

Full post as published by Florida Arbitration Law on May 04, 2010 (boomark / email).