Jurisdiction of Arbitrators to Decide Their Own Jurisdiction : Competence-Competence in Kansas and MBNA America Bank N.A. v. Credit

Under both federal and state arbitration law, arbitrators are generally understood to have the authority to rule on their own jurisdiction in the first instance, including ruling on whether the parties have agreed to arbitrate. A party that asserts it has not agreed to arbitrate is entitled to have a court adjudicate that issue (assuming the party has not waived it), either before an award is made (on a motion to enjoin the arbitration) or after (on a motion to vacate the award). In MBNA America Bank N.A. v. Credit, however, the Kansas Supreme Court asserted that the arbitration proceeding must stop once a party argues to the arbitrator that it has not agreed to arbitrate - i.e., that the arbitrators lack the authority to rule on their own jurisdiction. If followed, this assertion would put Kansas out of step with well-accepted principles of American arbitration law. The assertion was dictum in Credit and should be rejected in future cases