Second Circuit's Expansive Reading of Arbitration Clause Commits Question of Timeliness to Arbitral Panel

Originally published April 7, 2011

Keywords: Arbitration, ICC, Bechtel, timeliness, procedural viability.

A question that often arises in arbitration is whether a defense that goes to the procedural viability of the action itself, rather than to the merits—such as whether the claim is barred by a statute of limitations—must go to the arbitrator in the first instance. In Bechtel do Brasil Construções Ltda. v. UEG Araucária Ltda., No. 10-0341 (Mar. 22, 2011), the US Court of Appeals for the Second Circuit has given a broad construction to a clause calling for arbitration under International Chamber of Commerce (ICC) rules, and has determined that the question of timeliness should, in the first instance, have gone to the ICC arbitral panel.