Tuesday, December 3, 2013

Stolt-Nielsen S.A. v. AnimalFeeds International Corp. case brief

Stolt-Nielsen S.A. v. AnimalFeeds International Corp. case brief summary
130 S.Ct. 1758 (2010)

Petitioner shipping companies filed an application in district court under 9 U.S.C.S. § 10(a)(4)of the Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et seq., to vacate an arbitration award finding that respondent customer could pursue class arbitration. The district court vacated the award, and the United States Court of Appeals for the Second Circuit reversed. The Supreme Court granted certiorari.

The customer's antitrust claims against the companies were subject to arbitration under an arbitration clause in the parties' charter party. The parties stipulated that the arbitration clause was silent with respect to class arbitration.


  • The Court held that the arbitration panel exceeded its powers by concluding that the arbitration clause allowed for class arbitration. 
  • The panel did not consider whether the FAA, maritime law, or New York law allowed class arbitration in the absence of express consent, but instead impermissibly imposed its own view of sound policy regarding class arbitration. 
  • A party could not be compelled under the FAA to submit to class arbitration absent a contractual basis for concluding that the party had agreed to do so. 
  • The differences between bilateral and class arbitration were too great to allow the arbitrators to presume that the parties' silence on the issue of class arbitration constituted consent. 
  • Because the question was whether the parties had agreed to authorize class arbitration, and the parties had stipulated that there was no agreement on that question, the parties could not be compelled to submit to class arbitration.

The judgment of the court of appeals was reversed, and the matter was remanded for further proceedings. 5-3 Decision; 1 Dissent.

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