Is this arbitration clause enforceable in Alaska, and who decides if the underlying contract as a whole is void: the court or the arbitrator?
It depends entirely on WHEN the agreement was made, and for anything signed in the last twenty years the answer comes from a different statute than the one this family of sections states. AS 09.43.300(a): "AS 09.43.300 — 09.43.595 govern an agreement to arbitrate made on or after January 1, 2005." Under that regime an arbitration agreement in a record "is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract, and except as provided by (b) of this section" (AS 09.43.330(a)), and the division of labour is written into the text: "The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate," while "[a]n arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled" (AS 09.43.330(c) and (d)). GeoTek Alaska, Inc. v. Jacobs Engineering Group, Inc. applies that line: "The issue of Jacobs's consent therefore presented a question of arbitrability — 'whether [the] controversy is subject to [the] agreement to arbitrate' — and was properly for the court to decide." For an agreement entered BEFORE January 1, 2005, the older article answers instead: a written arbitration provision is "valid, enforceable, and irrevocable, except upon grounds that exist at law or in equity for the revocation of a contract" (AS 09.43.010(a)), and once a party shows such an agreement and the other side's refusal to arbitrate, "the court shall order the parties to proceed with arbitration," deciding only the narrow question of the agreement's existence if it is disputed (AS 09.43.020(a)). Lexington Marketing Group, Inc. v. Goldbelt Eagle, LLC construed that older article to follow the Federal Arbitration Act's severability doctrine: "Based on both the statutory language and the policy behind Alaska's Arbitration Act, we hold that state arbitration law aligns with federal law and does not permit a court determining arbitrability to consider the validity of the underlying agreement," so that "a court may properly adjudicate claims that the arbitration clause itself is void, but not claims that the entire contract is void."
The trap
The severability answer and the regime are two different questions, and getting the date wrong reverses the advice. AS 09.43.010(b) limits which contracts the older article governs at all: "AS 09.43.010 -- 09.43.180 do not apply to an agreement or a contract unless the agreement or contract is entered into before January 1, 2005, and is not otherwise subject to AS 09.43.300 -- 09.43.595," and a waiver of that effective-date cutoff is itself void. So Lexington, decided in 2007 about an agreement the parties entered in October 2002, is authority about the pre-2005 article and not about the one that governs a clause signed today. For a post-2004 agreement the Revised Uniform Arbitration Act supplies an express exception that points the other way from Lexington's severability rule: under AS 09.43.330(b), "[t]o the extent an agreement that contains an arbitration provision is invalidated on the grounds that a party was induced into entering into the agreement by fraud, the arbitration provision in the agreement is not enforceable, and the party is not required to prove that the party was induced into entering into the arbitration provision by fraud." A fraud-in-the-inducement attack on the whole contract therefore does NOT have to be aimed at the clause to defeat it, which is the opposite of the general severability answer. Two smaller points. The older article also excludes a labor-management contract from the article (AS 09.43.010 through 09.43.180) "unless they are incorporated into the contract by reference or their application is provided for by statute," in the same subsection that states the validity rule. And the court's role under the older article is narrow in a way a resisting party often misreads: "[a]n order for arbitration may not be refused on the ground that the claim in issue lacks merit or because a fault or ground for the claims sought to be arbitrated has not been shown."
13 authorities
- statuteAS 09.43.010enactment date not established
The words that state the rule
A written agreement to submit an existing controversy to arbitration or a provision in a written contract to submit to arbitration a subsequent controversy between the parties is valid, enforceable, and irrevocable, except upon grounds that exist at law or in equity for the revocation of a contract.
- statuteAS 09.43.010enactment date not established
The words that state the rule
However, AS 09.43.010 — 09.43.180 do not apply to a labor-management contract unless they are incorporated into the contract by reference or their application is provided for by statute.
- statuteAS 09.43.010enactment date not established
The words that state the rule
Notwithstanding (a) of this section, AS 09.43.010 — 09.43.180 do not apply to an agreement or a contract unless the agreement or contract is entered into before January 1, 2005, and is not otherwise subject to AS 09.43.300 — 09.43.595. A person may not waive the effective date of this subsection, and a waiver of the effective date of this subsection is void.
- statuteAS 09.43.020enactment date not established
The words that state the rule
On application of a party showing an agreement described in AS 09.43.010 , and the opposing party's refusal to arbitrate, the court shall order the parties to proceed with arbitration, but if the opposing party denies the existence of the agreement to arbitrate, the court shall proceed summarily to the determination of the issue and if the agreement is found to exist shall order arbitration.
- case157 P.3d 470Lexington Marketing Group, Inc. v. Goldbelt Eagle, LLCAlaskadecided 2007read it at the source ↗
The words that state the rule
Based on both the statutory language and the policy behind Alaska's Arbitration Act, we hold that state arbitration law aligns with federal law and does not permit a court determining arbitrability to consider the validity of the underlying agreement.
- statuteAS 09.43.300enactment date not established
The words that state the rule
AS 09.43.300 — 09.43.595 govern an agreement to arbitrate made on or after January 1, 2005.
- statuteAS 09.43.330enactment date not established
The words that state the rule
An agreement contained in a record to submit to arbitration an existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract, and except as provided by (b) of this section.
- statuteAS 09.43.330enactment date not established
The words that state the rule
To the extent an agreement that contains an arbitration provision is invalidated on the grounds that a party was induced into entering into the agreement by fraud, the arbitration provision in the agreement is not enforceable, and the party is not required to prove that the party was induced into entering into the arbitration provision by fraud.
- statuteAS 09.43.330enactment date not established
The words that state the rule
The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate. (d) An arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled.
- statuteAS 09.43.020enactment date not established
The words that state the rule
An order for arbitration may not be refused on the ground that the claim in issue lacks merit or because a fault or ground for the claims sought to be arbitrated has not been shown.
- case157 P.3d 470Lexington Marketing Group, Inc. v. Goldbelt Eagle, LLCAlaskadecided 2007read it at the source ↗
The words that state the rule
In other words, under AS 09.48.010, a court may properly adjudicate claims that the arbitration clause itself is void, but not claims that the entire contract is void.
- case157 P.3d 470Lexington Marketing Group, Inc. v. Goldbelt Eagle, LLCAlaskadecided 2007read it at the source ↗
The words that state the rule
In this case, decided before Buckeye, the superior court declined to refer the case to arbitration based on its finding that the underlying contract was void as a matter of public policy. Under Buckeye, such determinations are for the arbitrator to make. We REVERSE and REMAND for proceedings consistent with this opinion.
- case354 P.3d 368GeoTek Alaska, Inc. v. Jacobs Engineering Group, Inc.Alaskadecided 2015read it at the source ↗
The words that state the rule
The issue of Jacobs’s consent therefore presented a question of arbitrability — “whether [the] controversy is subject to [the] agreement to arbitrate” — and was properly for the court to decide.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.