All over Arbitrationland, workers are coming off their shifts, feeding their children, walking their dogs, donning their Team Colors — making all final preparations for the Big Game, BG Group v Argentina, to be played December 2 at 10:00 a.m. US East Coast Time, at a neutral venue near Union Station in Washington, D.C. Rabid fans are clamoring for invitations to the best BG Case parties. Party hosts are stocking up on Beef Empanadas and Guinness.

Argentina has been on a bit of a winning streak in this long-standing rivalry, masterfully running the First Option(s) offense* with Kaplan, its star player, leading the way. (*Devotees of American football will know the “Read Option” offensive scheme, wherein the quarterback rebuts the presumption that running backs run and quarterbacks hand-off, by clearly and unmistakably doing just the opposite, after just enough fakery to convince defenders that the presumption will dictate the play). But many analysts say the First Option(s) scheme will falter in a game at this level. They say the presumption that courts not arbitrators decide whether an agreement to arbitrate a particular dispute exists doesn’t apply in the ITL (Investment Treaty League) and that the First Option(s) scheme reliably puts points on the scoreboard only in the CAL (Commercial Arbitration League). After all, the pundits tell us, the question of who decides (court or arbitrator) whether a pre-condition for arbitral proceedings has been fulfilled (or is impossible to perform, or is rendered inoperative) is not so arcane that treaty parties would likely not have thought about it when negotiating their BIT, and their thoughts on the subject likely were: (1) that Treaty interpretation issues are suited for Treaty law experts, i.e. Arbitrators; (2) on the UK side, that the issue shouldn’t be resolved in a possibly-biased Argentine court (Argentina being, in this deal, the presumed capital importer and risk exporter); and (3) on both sides, that the issue should not be resolved in a court at the seat of arbitration, since in the UNCITRAL Rules arbitration scenario the identity of that court is, at the Treaty-signing stage, a mystery, and will only be known once the arbitral tribunal (barring party agreement) in a given case selects the seat. It seems bizarre, the thinking goes, that either party would have expected either an initial arbitrability decision or a de novo review of the arbitral arbitrability decision in the courts of an unforeseeable State (which here turned out to be the US) in which neither party is domiciled. Besides, don’t the UNCITRAL Rules assign arbitrators power to decide issues of jurisdiction? And given that those issues involve international law and treaty interpretation, not state (in the sense of the US 50) contract law, isn’t that assignment on par with assignment of the merits to the arbitrators, in terms of the scope of judicial review?

So goes, in significant part, BG Group’s arguably formidable defense to Argentina’s First Option(s) scheme. But do not think that BG lacks firepower on offense. Its multi-talented quarterback, Howsam, could be a compelling performer in the December 2 showdown, perhaps reprising a play that scored points on this field in 2002:

“[F]or the law to assume an expectation [of the parties, about whether the court or arbitrator has primacy] that aligns (1) decisionmaker with (2) comparative expertise, will help better to secure a fair and expeditious resolution of the underlying controversy – a goal of arbitration systems and judicial systems alike.” 537 U.S. 79 at 85.

This may be the under-considered aspect of Howsam’s game that ultimately wins for BG. We can also expect BG Group to contest Argentina’s contention (given some credence by the amicus position of the US) that fulfillment of the Argentine litigation pre-condition is a matter of “consent” and that issues of “consent” involve a “substantive arbitrability” issue, for a court to decide de novo, of whether an agreement to arbitrate was formed. (The US amicus suggests a remand for the D.C. Circuit to address whether the litigation pre-condition in the BIT is or is not a matter of “consent” to arbitration). Expect BG Group to urge that every pre-condition to an arbitration involves “consent,” and if this were the measure of whether court or arbitrator decides, then players like Howsam and John Wiley (a BG Group stalwart from the early ’60s) are obsolete legends. After all, whether a time limit has passed (Howsam) or a grievance process has been completed (John Wiley) — matters held to be for arbitral determination — are equally matters of “consent” to arbitration.  Look for BG Group to say Argentina’s position on “consent” is only superficially plausible, and that this plausibility derives from the fact that the pre-condition here requires litigation and that generally (but not in this BIT) an agreement to litigate implies a refusal to arbitrate. Look for BG Group to counter that in fact the litigation pre-condition in this  BIT might as well be that the dispute shall be submitted to an association of French Michelin three-star chefs for 18 months, i.e. that it is more about the timing of arbitration than the willingness of Argentina to undertake it. That position has some appeal, but it may not be a clear winner, because placing this pre-condition on the “procedural” side of the boundary between “substantive” and “procedural” arbitrability does not especially help courts to solve future boundary disputes.  The “comparative expertise” principle of Howsam has more resonance, as it can furnish a convincing basis in existing precedent for different treatment in the US courts of investment arbitration as compared to commercial arbitration. That play ought to be the winner on December 2.

Arbitration Commentaries’ fearless forecast: BG Group 9, Argentina Nil. Enjoy the Game. And go easy on the Guinness.

Is emergency arbitral relief granted by an emergency arbitrator inherently provisional, and therefore not final, and therefore beyond the powers of the emergency arbitrator insofar as the relief ordered would require a party to do something with irreversible consequences, and, finally, not capable of judicial recognition as an Award because of its necessarily provisional nature, being subject to modification by the regular arbitral tribunal in due course? This week’s answers are no, no, no, and no. (Yahoo!, Inc. v. Microsoft Corp., 2013 WL 5708604 (S.D.N.Y. Oct. 21, 2013)).  But tune in again next week. The case will be argued in the U.S. Second Circuit Court of Appeals on November 6.

Yahoo and Microsoft made a deal, to combine search engines and migrate Yahoo’s search engine advertising business to Microsoft’s Bing, all in the interest of competing more effectively with Google.  The parties agreed to arbitrate and opted into the AAA’s then-optional Emergency Arbitration rules (now incorporated into the AAA Commercial Arbitration Rules, and binding with regard to disputes arising from arbitration agreements made after October 1, 2013). In their arbitration clause, the parties agreed “that the [emergency] arbitrator is authorized to compel and award interim injunctive or emergency relief,” and further provided that “the [emergency] arbitrator… may compel and award specific performance.”

Yahoo after substantially performing the migration in most markets paused the migration effort in two important Asian markets and Microsoft, concerned that Yahoo was repudiating the unperformed remainder of the deal, commenced Emergency Arbitration.   A renowned arbitrator was appointed by the AAA; volumes of evidence and written argument were presented; two days of intensive oral hearings were conducted; and the following week the Emergency Arbitrator made an Award. He found that there was urgency, amounting to “emergency” as that term was used in the agreement of the parties, for Yahoo to complete the migration. His Award directed Yahoo to complete the migration, promptly.

In this decision the district court denied Yahoo’s motion to vacate, and rejected Yahoo’s argument that the contract phrase “interim injunctive or emergency relief” confined the emergency arbitrator’s powers to relief that was temporary in nature. One can perhaps see the argument that “emergency relief” was intended to be a narrower subset of “interim injunctive relief.” One can also perhaps see the argument that the term “interim” in the grammatical structure of the phrase modified both “injunctive” relief and “emergency relief.”  But the Emergency Arbitrator did not accept these arguments, especially in the context of an agreement that, in the next sentence, granted the Emergency Arbitrator power to order specific performance. The Emergency Arbitrator made a not nonsensical construction of the arbitration agreement.  That was sufficient for this district judge to conclude that, under governing Second Circuit law, the Emergency Arbitrator acted with his powers.

Is there something special here that might motivate the Second Circuit to see a need to clarify or modify existing law, or even reverse the judgment of the District Court?  In the Arbitration Commentaries crystal ball, this is not foreseen. Be prepared for a disposition by Summary Order affirming the judgment. (Caveat: The record on appeal is under seal. Your commentator cannot study it).

But if the mood does strike this Second Circuit panel, it might be tempted to nibble at the heels of one of its often-cited cases on deference to arbitral decisions about the scope of arbitral power: T. Co. Metals v. Dempsey Pipe & Supply, Inc., 592 F.3d 329 (2d Cir. 2010).  In that case the arbitrator was asked to correct a “clerical error” in his Final Award under the AAA International Rule allowing such corrections. But the error involved was not clerical; rather the arbitrator had misinterpreted data in certain exhibits, and concluded that he could invoke the clerical error rule to revisit a subjective judgment affecting damages that initially had been based not only on the mis-interpreted data but also on several other items of evidence that the arbitrator had correctly understood. Might the Second Circuit, after Stolt-Nielsen, ­have Second Thoughts about this aspect of Dempsey Pipe­ and conclude that when an arbitrator does not interpret an AAA Rule but revises it (in this instance, to allow correction of non-clerical judgmental errors) he or she applies his or her own notions of good arbitration practice rather than the terms of the parties’ agreement, and thereby exceeds his or her powers? ­

[The author of Arbitration Commentaries, a dedicated full-discloser, discloses that he was counsel for the defeated appellee in Dempsey Pipe, and still seeks vindication.]