In an alleged price-fixing dispute between parties who had entered into an arbitration agreement, the parties stipulated that the arbitration clause was “silent” with respect to class arbitration. After hearing argument and evidence, including testimony from experts regarding arbitration customs and usage in the maritime trade, the arbitrators concluded that the arbitration clause allowed for class arbitration. The U.S. Supreme Court held, however, that the arbitrational panel had exceeded its authority. “Rather than inquiring whether the FAA, maritime law, or New York law contains a ‘default rule’ under which an arbitration clause is construed as allowing class arbitration in the absence of express consent, the panel proceeded as if it had the authority of a common-law court to develop what it viewed as the best rule to be applied in such a situation. While the interpretation of an arbitration agreement is generally a matter of state law, the FAA imposes certain rules of fundamental importance, including the basic precept that arbitration is a matter of consent, not coercion. A party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” Stolt-Nielsen v. Animal Feeds International, 130 S.Ct. 1758 (2010).
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