Schneider v. The Kingdom of Thailand
2012 U.S. App. LEXIS 16508
| 2d Cir. | 2012Background
- Walter Bau, acting as insolvency administrator, sought to confirm an arbitral award against Thailand under the New York Convention.
- Arbitration arising from investments in a Thai tollway project (1989–1997) under the 2002 Germany-Thailand Investment Treaty.
- Dispute over whether Walter Bau’s investments were “approved investments” under Article 8 of the treaty.
- Tribunal petitioned to determine jurisdiction; UNCITRAL Rules applied; tribunal unanimously held it had jurisdiction.
- Thailand challenged the district court’s review, arguing for independent judgment on arbitrability rather than deferential review.
- District court performed deferential review of arbitrability and confirmed the award.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether arbitrability is for independent judicial determination | Schneider: district court should not decide arbitrability; question belongs to tribunal. | Thailand: review should be independent if no clear intent to delegate. | Arbitrability delegated to arbitrators; deferential review applies at confirmation. |
| Whether UNCITRAL rules show intent to arbitrate arbitrability | UNCITRAL rules empower tribunal to rule on jurisdiction. | Rules do not preclude court review if not delegated. | UNCITRAL Article 21 shows clear intent to arbitrate arbitrability. |
| Effect of Terms of Reference Section 4 on arbitrability | Section 4 allows tribunal to consider objections to jurisdiction. | Section 4 aligns with arbitration clause delegation. | Consistent with delegation of arbitrability to arbitrators. |
| Impact of Republic of Ecuador on standard of review | Case supports arbitrator-first interpretation when UNCITRAL rules are incorporated. | Republic of Ecuador does not control here. | Republic of Ecuador supports arbitrator-first review in this context. |
Key Cases Cited
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (establishes standard for question of arbitrability)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (presumption of arbitration when intent to delegate is unclear)
- Republic of Ecuador v. Chevron Corp., 638 F.3d 384 (2d Cir. 2011) (incorporation of UNCITRAL rules implies arbitrator-first arbitrability)
- Granite Rock Co. v. International Brotherhood of Teamsters, 130 S. Ct. 2847 (2010) (preserves court review when no valid arbitration provision; supports arbitrator-first approach)
- Parsons & Whittemore Overseas Co., Inc. v. Societe Generale De L’Industrie Du Papier (RAKTA), 508 F.2d 969 (2d Cir. 1974) (deference to arbitrator on jurisdictional issues preserves efficiency of arbitration)
- Contec, Inc. v. Remote Solution Co., Ltd., 398 F.3d 205 (2d Cir. 2005) (incorporation of rules showing intent to arbitrate arbitrability)
- STMicroelectronics, N.V. v. Credit Suisse Sec. (USA) LLC, 648 F.3d 68 (2d Cir. 2011) (illustrates review standards for foreign arbitral awards)