Steve L. Smith, partner, Benjamin T. Jones, associate, Jones Day (Global Disputes Practice)
In BG Group, the BIT required a litigation precondition to arbitration, but the arbitral rules empowered the tribunal to determine jurisdiction. The D.C. Circuit vacated the award for failure to satisfy the precondition. This holding is in conflict with Howsam v. Dean Witter, 537 U.S. 79, 85 (2002), and broadly applicable to other international arbitral awards. SCOTUS recently granted cert to decide the question of arbitrability.