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U.S. Supreme Court Limits Class Arbitration

Introduction

When parties have not agreed to arbitrate their disputes, they cannot be forced to arbitrate. This is hardly a surprising conclusion, and the critical importance of consent to arbitrate disputes is a well-accepted feature of arbitration jurisprudence around the world.

The U.S. Supreme Courts April 27, 2010 decision in Stolt-Nielsen S.A. v. AnimalFeeds International Corp., No. 08-1198, 2010 WL 1655826 (U.S. Apr. 27, 2010) applies this fundamental precept in what has become a highly controversial context namely, to class action arbitration. In Stolt-Nielsen, the Court held that where an arbitration agreement is silent on the question of whether class arbitration is authorized, the parties consent to class arbitration may not be inferred absent evidence of the parties intent or a governing rule of law authorizing that inference.

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