BG Group plc v. Republic of Argentina (12-138)

argument 12-138

BG Group plc v. Republic of Argentina

Supreme Court of the United States 1h 3m 5 speakers 8 chapters transcribed 6 days ago official recording ↗

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What is the central dispute between BG Group and the Republic of Argentina?

John G. Roberts 0:01

We'll hear argument next in case 12-138, BG Group versus the Republic of Argentina. Mr. Goldstein.

Mr. Goldstein 0:07

Mr. Chief Justice, may it please the Court, we ask you to resolve this case narrowly by reaffirming that an arbitrator rather than a Court presumptively resolves a dispute over a precondition to arbitration. That holding would decide the question presented, resolve the circuit conflict, and govern 99 percent of the cases in the lower courts. Argentina wants you to decide a different issue. its position in this Court is that there is no arbitration agreement with my client in the first place. So it says a precondition to that nonexistent agreement is irrelevant. Now,

Elena Kagan 0:41

Mr. Goldstein, do you take the position that parties can't, by contract, say this particular precondition goes to the party's consent to arbitrate?

Mr. Goldstein 0:55

We do not take that position. If a party were to say that, as the governments in NAFTA have done, as the Solicitor General points out, is the language of the U.S.-South Korea Bilateral Investment Treaty, unlike this one, we think it would be settled that a court would resolve a dispute.

Elena Kagan 1:12

All right. So if the issue is what did the parties, as I see it, what did the parties intend on this question, why isn't the first options howsome? divide, the one that we should follow in this setting. The Solicitor General is suggesting that we shouldn't follow that. We should give some sort of heightened deference to the foreign State, but I'm not sure why, because the issue is always about what did the parties intend. And if the issue is always about that, don't we look at the text, the custom and practice of the industry? the behavior between the parties, don't we look at all of the factors we normally look at in deciding whether something goes to a substantive or procedural issue?

Mr. Goldstein 2:06

Yes. So

Elena Kagan 2:07

let me see if I can — So it's not that we hold absolutely that in every situation a precondition is subject to an arbitral decision. We look to those — to the issue of consent, don't we?

Mr. Goldstein 2:22

Well, a couple of things about that. You do — you have held in Housem that if there is a precondition to arbitration, it is presumptively decided by the arbitrators rather than the Court, so that

Elena Kagan 2:32

— Maybe that's why the government is saying we shouldn't treat it as a presumption. We should just treat it as —

Mr. Goldstein 2:37

All right. Maybe I can help by locating the parties' different arguments in this case, because there are a lot of them. We have said, of course, that we think you should decide the question presented. Argentina wants you to go beyond the question presented. We can talk about whether that's appropriate. If you did decide the question of consent, I think you would do it in a three-part opinion, and some of the parts are contested and some aren't. This is how I would write the opinion. Part one would say, look at our decision in Housem, and it's undisputed here that if this was an ordinary contract case just between two American companies, then BG Group would win because this looks just like a procedural precondition.

Mr. Goldstein 3:13

It's like the John Wiley staged grievance procedure, and I don't think the other side argues against that. Then the other side has given you two different arguments for why you wouldn't apply Housem and why you might have a different analytical framework. The first argument, we could call it part two of the opinion, is the argument of the United States. And what the United States says is, look, the difference between this and Housem is it's an international case. And what's different in international cases is that when you dealt with Housem, You dealt with a set of expectations between parties agreeing to arbitrate that may not apply in the international context, and so maybe it's different. Now, this — and the reason they say that it's different is that an international case, when it's cited in the United States, is governed by the New York Convention.

Mr. Goldstein 3:58

And in a New York Convention case, whether it's a commercial case, whether it's an international treaty arbitration case, What the rule of judicial review is, and that's what we're looking at here, do the arbitrators finally decide the question or does a court on judicial review decide it?