For those employers using arbitration agreements, the United States Supreme Court recently issued an interesting decision regarding who should determine the threshold issue of whether an arbitration agreement is enforceable. In Rent-A-Center West v. Jackson, Antonio Jackson sued Rent-A-Center (”RAC”) for employment discrimination, and RAC petitioned the court to compel Jackson to arbitrate his claims. Jackson opposed the petition on the grounds his arbitration agreement was unconscionable. Pursuant to a provision expressly delegating enforceability challenges to the arbitrator, RAC asserted the arbitrator and not the court should determine the issue.

Dubai currently has no effective insolvency law. Try to imagine it: How would creditors recover their entitlements? Does it lead to more arbitration activity? Does it explain why the Dubai International Arbitration Centre received more than 300 new cases last year and why arbitration is increasingly used?

Thailand introduced reforms to its bankruptcy laws in 1998 in the aftermath of the 1997 Asian financial crisis. Those reforms introduced business reorganisation provisions similar to the Chapter 11 provisions of the US Bankruptcy Code. Further amendments have been made to the Thai bankruptcy laws, which are now governed by the Bankruptcy Act BE 2483 (1940) as amended by the Bankruptcy Act (No. 7) BE 2547 (2004).

Who decides whether an arbitration agreement is unconscionable when the agreement explicitly delegates that decision to the arbitrator? According to a slim majority of the U.S. Supreme Court in Rent-A-Center v. Jackson, No. 09-497, ___ U.S. ___, slip op. (June 21, 2010), the arbitrator does, if a party challenges the enforceability of the arbitration agreement. The district court may only intervene if a party specifically challenges the validity of the agreement to delegate that decision to the arbitrator. The decision makes it more difficult for a current or former employee who has signed an arbitration agreement with a proper delegation provision to avoid arbitration and bring a private lawsuit. That is a positive result for pro-arbitration employers.