Court Opinion

ID: 78783
Source: CourtListenerOpinion
Date Created: 2010-04-28 06:44:07+00
Date Added: 2024-06-11T15:02:49.424105
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2009                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       Syllabus

   STOLT-NIELSEN S. A. ET AL. v. ANIMALFEEDS IN-

              TERNATIONAL CORP. 

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
                 THE SECOND CIRCUIT

   No. 08–1198. Argued December 9, 2009—Decided April 27, 2010
Petitioner shipping companies serve much of the world market for par
  cel tankers—seagoing vessels with compartments that are separately
  chartered to customers, such as respondent (AnimalFeeds), who wish
  to ship liquids in small quantities. AnimalFeeds ships its goods pur
  suant to a standard contract known in the maritime trade as a char
  ter party. The charter party that AnimalFeeds uses contains an arbi
  tration clause. AnimalFeeds brought a class action antitrust suit
  against petitioners for price fixing, and that suit was consolidated
  with similar suits brought by other charterers, including one in
  which the Second Circuit subsequently reversed a lower court ruling
  that the charterers’ claims were not subject to arbitration. As a con
  sequence, the parties in this case agree that they must arbitrate their
  antitrust dispute. AnimalFeeds sought arbitration on behalf of a
  class of purchasers of parcel tanker transportation services. The par
  ties agreed to submit the question whether their arbitration agree
  ment allowed for class arbitration to a panel of arbitrators, who
  would be bound by rules (Class Rules) developed by the American
  Arbitration Association following Green Tree Financial Corp. v. Baz
  zle, 539 U. S. 444. One Class Rule requires an arbitrator to deter
  mine whether an arbitration clause permits class arbitration. The
  parties selected an arbitration panel, designated New York City as
  the arbitration site, and stipulated that their arbitration clause was
  “silent” on the class arbitration issue. The panel determined that the
  arbitration clause allowed for class arbitration, but the District Court
  vacated the award. It concluded that the arbitrators’ award was
  made in “manifest disregard” of the law, for had the arbitrators con
  ducted a choice-of-law analysis, they would have applied the rule of
2        STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                                 Syllabus

    federal maritime law requiring contracts to be interpreted in light of
    custom and usage. The Second Circuit reversed, holding that be
    cause petitioners had cited no authority applying a maritime rule of
    custom and usage against class arbitration, the arbitrators’ decision
    was not in manifest disregard of maritime law; and that the arbitra
    tors had not manifestly disregarded New York law, which had not es
    tablished a rule against class arbitration.
Held: Imposing class arbitration on parties who have not agreed to au
 thorize class arbitration is inconsistent with the Federal Arbitration
 Act (FAA), 9 U. S. C. §1 et seq. Pp. 7–23.
    (a) The arbitration panel exceeded its powers by imposing its own
 policy choice instead of identifying and applying a rule of decision de
 rived from the FAA or from maritime or New York law. Pp. 7–12.
       (1) An arbitration decision may be vacated under FAA §10(a)(4)
 on the ground that the arbitrator exceeded his powers, “only when
 [an] arbitrator strays from interpretation and application of the
 agreement and effectively ‘dispense[s] his own brand of industrial
 justice,’ ” Major League Baseball Players Assn. v. Garvey, 532 U. S.
 504, 509 (per curiam), for an arbitrator’s task is to interpret and en
 force a contract, not to make public policy. P. 7.
       (2) The arbitration panel appears to have rested its decision on
 AnimalFeeds’ public policy argument for permitting class arbitration
 under the charter party’s arbitration clause. However, because the
 parties agreed that their agreement was “silent” on the class arbitra
 tion issue, the arbitrators’ proper task was to identify the rule of law
 governing in that situation. Instead, the panel based its decision on
 post-Bazzle arbitral decisions without mentioning whether they were
 based on a rule derived from the FAA or on maritime or New York
 law. Rather than inquiring whether those bodies of law contained a
 “default rule” permitting an arbitration clause to allow class arbitra
 tion absent express consent, the panel proceeded as if it had a com
 mon-law court’s authority to develop what it viewed as the best rule
 for such a situation. Finding no reason to depart from its perception
 of a post-Bazzle consensus among arbitrators that class arbitration
 was beneficial in numerous settings, the panel simply imposed its
 own conception of sound policy and permitted class arbitration. The
 panel’s few references to intent do not show that the panel did any
 thing other than impose its own policy preference. Thus, under FAA
 §10(b), this Court must either “direct a rehearing by the arbitrators”
 or decide the question originally referred to the panel. Because there
 can be only one possible outcome on the facts here, there is no need to
 direct a rehearing by the arbitrators. Pp. 7–12.
    (b) Bazzle did not control resolution of the question whether the in
 stant charter party permits arbitration to proceed on behalf of this
                   Cite as: 559 U. S. ____ (2010)                    3

                              Syllabus

class. Pp. 12–17.
      (1) No single rationale commanded a majority in Bazzle, which
concerned contracts between a commercial lender and its customers
that had an arbitration clause that did not expressly mention class
arbitration. The plurality decided only the question whether the
court or arbitrator should decide whether the contracts were “silent”
on the class arbitration issue, concluding that it was the arbitrator.
JUSTICE STEVENS’ opinion bypassed that question, resting instead on
his resolution of the questions of what standard the appropriate deci
sionmaker should apply in determining whether a contract allows
class arbitration, and whether, under whatever standard is appropri
ate, class arbitration had been properly ordered in the case at hand.
Pp. 12–15.
      (2) The Bazzle opinions appear to have baffled these parties at
their arbitration proceeding. For one thing, the parties appear to
have believed that Bazzle requires an arbitrator, not a court, to de
cide whether a contract permits class arbitration, a question ad
dressed only by the plurality. That question need not be revisited
here because the parties expressly assigned that issue to the arbitra
tion panel, and no party argues that this assignment was impermis
sible. Both the parties and the arbitration panel also seem to have
misunderstood Bazzle as establishing the standard to be applied in
deciding whether class arbitration is permitted. However, Bazzle left
that question open. Pp. 15–17.
   (c) Imposing class arbitration here is inconsistent with the FAA.
Pp. 17–23.
      (1) The FAA imposes rules of fundamental importance, including
the basic precept that arbitration “is a matter of consent, not coer
cion.” Volt v. Board of Trustees of Leland Stanford Junior Univ., 489
U. S. 468, 479. The FAA requires that a “written provision in any
maritime transaction” calling for the arbitration of a controversy
arising out of such transaction “shall be valid, irrevocable, and en
forceable, save upon such grounds as exist at law or in equity for the
revocation of any contract,” 9 U. S. C. §2, and permits a party to an
arbitration agreement to petition a federal district court for an order
directing that arbitration proceed “in the manner provided for in such
agreement,” §4. Thus, this Court has said that the FAA’s central
purpose is to ensure that “private agreements to arbitrate are en
forced according to their terms.” Volt, 489 U. S., at 479. Whether en
forcing an agreement to arbitrate or construing an arbitration clause,
courts and arbitrators must “give effect to the [parties’] contractual
rights and expectations.” Ibid. The parties’ “intentions control,”
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U. S.
614, 626, and the parties are “generally free to structure their arbi
4        STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                                  Syllabus

    tration agreements as they see fit,” Mastrobuono v. Shearson Lehman
    Hutton, Inc., 514 U. S. 52, 57. They may agree to limit the issues ar
    bitrated and may agree on rules under which an arbitration will pro
    ceed. They may also specify with whom they choose to arbitrate their
    disputes. See EEOC v. Waffle House, Inc., 534 U. S. 279, 289.
    Pp. 17–20.
         (2) It follows that a party may not be compelled under the FAA to
    submit to class arbitration unless there is a contractual basis for con
    cluding that the party agreed to do so. Here, the arbitration panel
    imposed class arbitration despite the parties’ stipulation that they
    had reached “no agreement” on that issue. The panel’s conclusion is
    fundamentally at war with the foundational FAA principle that arbi
    tration is a matter of consent. It may be appropriate to presume that
    parties to an arbitration agreement implicitly authorize the arbitra
    tor to adopt those procedures necessary to give effect to the parties’
    agreement. See Howsam v. Dean Witter Reynolds, Inc., 537 U. S. 79,
    84. But an implicit agreement to authorize class action arbitration is
    not a term that the arbitrator may infer solely from the fact of an
    agreement to arbitrate. The differences between simple bilateral and
    complex class action arbitration are too great for such a presumption.
    Pp. 20–23.
548 F. 3d 85, reversed and remanded.

  ALITO, J., delivered the opinion of the Court, in which ROBERTS, C. J.,
and SCALIA, KENNEDY, and THOMAS, JJ., joined. GINSBURG, J., filed a
dissenting opinion, in which STEVENS and BREYER, JJ., joined. SO-
TOMAYOR, J., took no part in the consideration or decision of the case.
                        Cite as: 559 U. S. ____ (2010)                              1

                             Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash­
     ington, D. C. 20543, of any typographical or other formal errors, in order
     that corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                   _________________

                                   No. 08–1198
                                   _________________

     STOLT-NIELSEN S. A., ET AL., PETITIONERS v.

       ANIMALFEEDS INTERNATIONAL CORP. 

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

           APPEALS FOR THE SECOND CIRCUIT

                                 [April 27, 2010] 

  JUSTICE ALITO delivered the opinion of the Court.
  We granted certiorari in this case to decide whether
imposing class arbitration on parties whose arbitration
clauses are “silent” on that issue is consistent with the
Federal Arbitration Act (FAA), 9 U. S. C. §1 et seq.
                            I

                           A

  Petitioners are shipping companies that serve a large
share of the world market for parcel tankers—seagoing
vessels with compartments that are separately chartered
to customers wishing to ship liquids in small quantities.
One of those customers is AnimalFeeds International
Corp. (hereinafter AnimalFeeds), which supplies raw
ingredients, such as fish oil, to animal-feed producers
around the world. AnimalFeeds ships its goods pursuant
to a standard contract known in the maritime trade as a
charter party.1 Numerous charter parties are in regular
——————
   1 “[C]harter parties are commonly drafted using highly standardized

forms specific to the particular trades and business needs of the par­
ties.” Comment, A Comparative Analysis of Charter Party Agreements
2      STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                         Opinion of the Court

use, and the charter party that AnimalFeeds uses is
known as the “Vegoilvoy” charter party. Petitioners as­
sert, without contradiction, that charterers like Animal-
Feeds, or their agents—not the shipowners—typically
select the particular charter party that governs their
shipments. Accord, Trowbridge, Admiralty Law Institute:
Symposium on Charter Parties: The History, Develop­
ment, and Characteristics of the Charter Concept, 49
Tulane L. Rev. 743, 753 (1975) (“Voyage charter parties
are highly standardized, with many commodities and
charterers having their own specialized forms”).
  Adopted in 1950, the Vegoilvoy charter party contains
the following arbitration clause:
     “Arbitration. Any dispute arising from the making,
     performance or termination of this Charter Party
     shall be settled in New York, Owner and Charterer
     each appointing an arbitrator, who shall be a mer­
     chant, broker or individual experienced in the ship­
     ping business; the two thus chosen, if they cannot
     agree, shall nominate a third arbitrator who shall be
     an Admiralty lawyer. Such arbitration shall be con­
     ducted in conformity with the provisions and proce­
     dure of the United States Arbitration Act [i.e., the
     FAA], and a judgment of the Court shall be entered
     upon any award made by said arbitrator.” App. to
     Pet. for Cert. 69a.
   In 2003, a Department of Justice criminal investigation
revealed that petitioners were engaging in an illegal price­
fixing conspiracy. When AnimalFeeds learned of this, it
brought a putative class action against petitioners in the
District Court for the Eastern District of Pennsylvania,
—————— 

“Subject to” Respective American and British Laws and Decisions . . .

It’s All in the Details, 26 Tulane Mar. L. J. 291, 294 (2001–2002); see 

also 2 T. Schoenbaum, Admiralty and Maritime Law §11–1, p. 200 (3d

ed. 2001). 

                 Cite as: 559 U. S. ____ (2010)            3

                     Opinion of the Court

asserting antitrust claims for supracompetitive prices that
petitioners allegedly charged their customers over a period
of several years.
   Other charterers brought similar suits. In one of these,
the District Court for the District of Connecticut held that
the charterers’ claims were not subject to arbitration
under the applicable arbitration clause, but the Second
Circuit reversed. See JLM Industries, Inc. v. Stolt-Nielsen
S. A., 387 F. 3d 163, 183 (2004). While that appeal was
pending, the Judicial Panel on Multidistrict Litigation
ordered the consolidation of then-pending actions against
petitioners, including AnimalFeeds’ action, in the District
of Connecticut. See In re Parcel Tanker Shipping Services
Antitrust Litigation, 296 F. Supp. 2d 1370, 1371, and n. 1
(JPML 2003). The parties agree that as a consequence of
these judgments and orders, AnimalFeeds and petitioners
must arbitrate their antitrust dispute.
                              B
   In 2005, AnimalFeeds served petitioners with a demand
for class arbitration, designating New York City as the
place of arbitration and seeking to represent a class of
“[a]ll direct purchasers of parcel tanker transportation
services globally for bulk liquid chemicals, edible oils,
acids, and other specialty liquids from [petitioners] at any
time during the period from August 1, 1998, to November
30, 2002.” 548 F. 3d 85, 87 (CA2 2008) (internal quotation
marks omitted). The parties entered into a supplemental
agreement providing for the question of class arbitration
to be submitted to a panel of three arbitrators who were to
“follow and be bound by Rules 3 through 7 of the American
Arbitration Association’s Supplementary Rules for Class
Arbitrations (as effective Oct. 8, 2003).” App. to Pet. for
Cert. 59a. These rules (hereinafter Class Rules) were
developed by the American Arbitration Association (AAA)
after our decision in Green Tree Financial Corp. v. Bazzle,
4     STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                     Opinion of the Court

539 U. S. 444 (2003), and Class Rule 3, in accordance with
the plurality opinion in that case, requires an arbitrator,
as a threshold matter, to determine “whether the applica­
ble arbitration clause permits the arbitration to proceed
on behalf of or against a class.” App. 56a.
   The parties selected a panel of arbitrators and stipu­
lated that the arbitration clause was “silent” with respect
to class arbitration. Counsel for AnimalFeeds explained to
the arbitration panel that the term “silent” did not simply
mean that the clause made no express reference to class
arbitration. Rather, he said, “[a]ll the parties agree that
when a contract is silent on an issue there’s been no
agreement that has been reached on that issue.” Id.,
at 77a.
   After hearing argument and evidence, including testi­
mony from petitioners’ experts regarding arbitration
customs and usage in the maritime trade, the arbitrators
concluded that the arbitration clause allowed for class
arbitration. They found persuasive the fact that other
arbitrators ruling after Bazzle had construed “a wide
variety of clauses in a wide variety of settings as allowing
for class arbitration,” but the panel acknowledged that
none of these decisions was “exactly comparable” to the
present dispute. See App. to Pet. for Cert. 49a–50a.
Petitioners’ expert evidence did not show an “inten[t] to
preclude class arbitration,” the arbitrators reasoned, and
petitioners’ argument would leave “no basis for a class
action absent express agreement among all parties and
the putative class members.” Id., at 51a.
   The arbitrators stayed the proceeding to allow the par­
ties to seek judicial review, and petitioners filed an appli­
cation to vacate the arbitrators’ award in the District
Court for the Southern District of New York. See 9
U. S. C. §10(a)(4) (authorizing a district court to “make an
order vacating the award upon the application of any
party to the arbitration . . . where the arbitrators exceeded
                 Cite as: 559 U. S. ____ (2010)            5

                     Opinion of the Court

their powers”); Petition to Vacate Arbitration Award, No.
1:06–CV–00420–JSR (SDNY) in App. in No. 06–3474–cv
(CA2), p. A–17, ¶16 (citing §10(a)(4) as a ground for vaca­
tur of the award); see also id., at A–15 to A–16, ¶9 (invok­
ing the District Court’s jurisdiction under 9 U. S. C. §203
and 28 U. S. C. §§1331 and 1333). The District Court
vacated the award, concluding that the arbitrators’ deci­
sion was made in “manifest disregard” of the law insofar
as the arbitrators failed to conduct a choice-of-law analy­
sis. 435 F. Supp. 2d 382, 384–385 (SDNY 2006). See
Wilko v. Swan, 346 U. S. 427, 436–437 (1953) (“[T]he
interpretations of the law by the arbitrators in contrast to
manifest disregard are not subject, in the federal courts, to
judicial review for error in interpretation”); see also Peti­
tion to Vacate Arbitration Award, supra, at A–17, ¶17
(alleging that the arbitration panel “manifestly disre­
garded the law”). Had such an analysis been conducted,
the District Court held, the arbitrators would have applied
the rule of federal maritime law requiring that contracts
be interpreted in light of custom and usage. 435 F. Supp.
2d, at 385–386.
   AnimalFeeds appealed to the Court of Appeals, which
reversed. See 9 U. S. C. §16(a)(1)(E) (“An appeal may be
taken from . . . an order . . . vacating an award”). As an
initial matter, the Court of Appeals held that the “mani­
fest disregard” standard survived our decision in Hall
Street Associates, L. L. C. v. Mattel, Inc., 552 U. S. 576
(2008), as a “judicial gloss” on the enumerated grounds for
vacatur of arbitration awards under 9 U. S. C. §10. 548
F. 3d, at 94. Nonetheless, the Court of Appeals concluded
that, because petitioners had cited no authority applying a
federal maritime rule of custom and usage against class
arbitration, the arbitrators’ decision was not in manifest
disregard of federal maritime law. Id., at 97–98. Nor had
the arbitrators manifestly disregarded New York law, the
Court of Appeals continued, since nothing in New York
6        STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                          Opinion of the Court

case law established a rule against class arbitration. Id.,
at 98–99.
  We granted certiorari. 557 U. S. ___ (2009).2

——————
    2 Invokingan argument not pressed in or considered by the courts
below, the dissent concludes that the question presented is not ripe for
our review. See post, at 1, 3–6 (opinion of GINSBURG, J.). In so doing,
the dissent offers no clear justification for now embracing an argument
“we necessarily considered and rejected” in granting certiorari. United
States v. Williams, 504 U. S. 36, 40 (1992). Ripeness reflects constitu­
tional considerations that implicate “Article III limitations on judicial
power,” as well as “prudential reasons for refusing to exercise jurisdic­
tion.” Reno v. Catholic Social Services, Inc., 509 U. S. 43, 57, n. 18
(1993). In evaluating a claim to determine whether it is ripe for judicial
review, we consider both “the fitness of the issues for judicial decision”
and “the hardship of withholding court consideration.” National Park
Hospitality Assn. v. Department of Interior, 538 U. S. 803, 808 (2003).
To the extent the dissent believes that the question on which we
granted certiorari is constitutionally unripe for review, we disagree.
The arbitration panel’s award means that petitioners must now submit
to class determination proceedings before arbitrators who, if petitioners
are correct, have no authority to require class arbitration absent the
parties’ agreement to resolve their disputes on that basis. See Class
Rule 4(a) (cited in App. 57a); Brief for American Arbitration Association
as Amicus Curiae 17. Should petitioners refuse to proceed with what
they maintain is essentially an ultra vires proceeding, they would
almost certainly be subject to a petition to compel arbitration under 9
U. S. C. §4. Cf. Regional Rail Reorganization Act Cases, 419 U. S. 102,
143 (1974) (“Where the inevitability of the operation of a statute
against certain individuals is patent, it is irrelevant to the existence of
a justiciable controversy that there will be a time delay before the
disputed provisions will come into effect”). We think it is clear on these
facts that petitioners have demonstrated sufficient hardship, and that
their question is fit for our review at this time. To the extent the
dissent believes that the question is prudentially unripe, we reject that
argument as waived, Sprietsma v. Mercury Marine, 537 U. S. 51, 56,
n. 4 (2002), and we see no reason to disregard the waiver. We express
no view as to whether, in a similar case, a federal court may consider a
question of prudential ripeness on its own motion. See National Park
Hospitality Assn., supra, at 808 (“[E]ven in a case raising only pruden­
tial concerns, the question of ripeness may be considered on a court’s
own motion”).
                      Cite as: 559 U. S. ____ (2010)                      7

                           Opinion of the Court

                              II 

                              A

   Petitioners contend that the decision of the arbitration
panel must be vacated, but in order to obtain that relief,
they must clear a high hurdle. It is not enough for peti­
tioners to show that the panel committed an error—or
even a serious error. See Eastern Associated Coal Corp. v.
Mine Workers, 531 U. S. 57, 62 (2000); Paperworkers v.
Misco, Inc., 484 U. S. 29, 38 (1987). “It is only when [an]
arbitrator strays from interpretation and application of
the agreement and effectively ‘dispense[s] his own brand
of industrial justice’ that his decision may be unenforce­
able.” Major League Baseball Players Assn. v. Garvey, 532
U. S. 504, 509 (2001) (per curiam) (quoting Steelworkers v.
Enterprise Wheel & Car Corp., 363 U. S. 593, 597 (1960)).
In that situation, an arbitration decision may be vacated
under §10(a)(4) of the FAA on the ground that the arbitra­
tor “exceeded [his] powers,” for the task of an arbitrator is
to interpret and enforce a contract, not to make public
policy. In this case, we must conclude that what the arbi­
tration panel did was simply to impose its own view of
sound policy regarding class arbitration.3
                         B
                         1
  In its memorandum of law filed in the arbitration pro­
——————
  3 We  do not decide whether “ ‘manifest disregard’ ” survives our deci­
sion in Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U. S. 576, 585
(2008), as an independent ground for review or as a judicial gloss on the
enumerated grounds for vacatur set forth at 9 U. S. C. §10. Animal-
Feeds characterizes that standard as requiring a showing that the
arbitrators “knew of the relevant [legal] principle, appreciated that this
principle controlled the outcome of the disputed issue, and nonetheless
willfully flouted the governing law by refusing to apply it.” Brief for
Respondent 25 (internal quotation marks omitted). Assuming, ar
guendo, that such a standard applies, we find it satisfied for the rea­
sons that follow.
8     STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                     Opinion of the Court

ceedings, AnimalFeeds made three arguments in sup-
port of construing the arbitration clause to permit class
arbitration:
       “The parties’ arbitration clause should be construed
    to allow class arbitration because (a) the clause is si-
    lent on the issue of class treatment and, without ex-
    press prohibition, class arbitration is permitted under
    Bazzle; (b) the clause should be construed to permit
    class arbitration as a matter of public policy; and (c)
    the clause would be unconscionable and unenforceable
    if it forbade class arbitration.” App. in No. 06–3474–
    cv (CA2), at A–308 to A–309 (emphasis added).
   The arbitrators expressly rejected AnimalFeeds’ first
argument, see App. to Pet. for Cert. 49a, and said nothing
about the third. Instead, the panel appears to have rested
its decision on AnimalFeeds’ public policy argument.
Because the parties agreed their agreement was “silent” in
the sense that they had not reached any agreement on the
issue of class arbitration, the arbitrators’ proper task was
to identify the rule of law that governs in that situation.
Had they engaged in that undertaking, they presumably
would have looked either to the FAA itself or to one of the
two bodies of law that the parties claimed were governing,
i.e., either federal maritime law or New York law. But the
panel did not consider whether the FAA provides the rule
of decision in such a situation; nor did the panel attempt
to determine what rule would govern under either mari-
time or New York law in the case of a “silent” contract.
Instead, the panel based its decision on post-Bazzle arbi-
tral decisions that “construed a wide variety of clauses in a
wide variety of settings as allowing for class arbitration.”
App. to Pet. for Cert. 49a–50a. The panel did not mention
whether any of these decisions were based on a rule de-
                     Cite as: 559 U. S. ____ (2010)                    9

                          Opinion of the Court

rived from the FAA or on maritime or New York law.4
   Rather than inquiring whether the FAA, maritime law,
or New York law contains a “default rule” under which an
arbitration clause is construed as allowing class arbitra­
tion in the absence of express consent, the panel proceeded
as if it had the authority of a common-law court to develop
what it viewed as the best rule to be applied in such a
situation. Perceiving a post-Bazzle consensus among
arbitrators that class arbitration is beneficial in “a wide
variety of settings,” the panel considered only whether
there was any good reason not to follow that consensus in
this case. App. to Pet. for Cert. 49a–50a. The panel was
not persuaded by “court cases denying consolidation of
arbitrations,”5 by undisputed evidence that the Vegoilvoy
charter party had “never been the basis of a class action,”
or by expert opinion that “sophisticated, multinational
commercial parties of the type that are sought to be in­
——————
  4 The panel’s reliance on these arbitral awards confirms that the

panel’s decision was not based on a determination regarding the
parties’ intent. All of the arbitral awards were made under the AAA’s
Class Rules, which were adopted in 2003, and thus none was available
when the parties here entered into the Vegoilvoy charter party during
the class period ranging from 1998 to 2002. See 548 F. 3d 85, 87 (CA2
2008) (defining the class period). Indeed, at the hearing before the
panel, counsel for AnimalFeeds conceded that “[w]hen you talk about
expectations, virtually every one of the arbitration clauses that were
the subject of the 25 AAA decisions were drafted before [Bazzle]. So
therefore, if you are going to talk about the parties’ intentions, pre
[Bazzle] class arbitrations were not common, post [Bazzle] they are
common.” App. 87a. Moreover, in its award, the panel appeared to
acknowledge that none of the cited arbitration awards involved a
contract between sophisticated business entities. See App. to Pet. for
Cert. 50a.
  5 See Government of United Kingdom v. Boeing Co., 998 F. 2d 68, 71,

74 (CA2 1993); see also Glencore, Ltd. v. Schnitzer Steel Prods. Co., 189
F. 3d 264, 268 (CA2 1999); Champ v. Siegel Trading Co., 55 F. 3d 269,
275 (CA7 1995). Unlike the subsequent arbitration awards that the
arbitrators cited, these decisions were available to the parties when
they entered into their contracts.
10     STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                          Opinion of the Court

cluded in the class would never intend that the arbitration
clauses would permit a class arbitration.”6 Id., at 50a–
——————
   6 Petitioners produced expert evidence from experienced maritime

arbitrators demonstrating that it is customary in the shipping business
for parties to resolve their disputes through bilateral arbitration. See,
e.g., App. 126a (expert declaration of John Kimball) (“In the 30 years I
have been practicing as a maritime lawyer, I have never encountered
an arbitration clause in a charter party that could be construed as
allowing class action arbitration”); id., at 139a (expert declaration of
Bruce Harris) (“I have been working as a maritime arbitrator for thirty
years and this matter is the first I have ever encountered where the
issue of a class action arbitration has even been raised”). These experts
amplified their written statements in their live testimony, as well. See,
e.g., App. 112a, 113a (Mr. Kimball) (opining that the prospect of a class
action in a maritime arbitration would be “quite foreign” to overseas
shipping executives and charterers); id., at 111a–112a (Mr. Harris)
(opining that in the view of the London Corps of International Arbitra­
tion, class arbitration is “inconceivable”).
   Under both New York law and general maritime law, evidence of
“custom and usage” is relevant to determining the parties’ intent when
an express agreement is ambiguous. See Excess Ins. Co. v. Factory
Mut. Ins. Co., 3 N. Y. 3d 577, 590–591, 822 N. E. 2d 768, 777 (2004)
(“Our precedent establishes that where there is ambiguity in a reinsur­
ance certificate, the surrounding circumstances, including industry
custom and practice, should be taken into consideration”); Lopez v.
Consolidated Edison Co. of N. Y., 40 N. Y. 2d 605, 609, 357 N. E. 2d
951, 954–955 (1976) (where contract terms were ambiguous, parol
evidence of custom and practice was properly admitted to show parties’
intent); 407 East 61st Garage, Inc. v. Savoy Fifth Avenue Corp., 23 N. Y.
2d 275, 281, 244 N. E. 2d 37, 41 (1968) (contract was “not so free from
ambiguity to preclude extrinsic evidence” of industry “custom and
usage” that would “establish the correct interpretation or understand­
ing of the agreement as to its term”). See also Great Circle Lines, Ltd.
v. Matheson & Co., 681 F. 2d 121, 125 (CA2 1982) (“Certain long­
standing customs of the shipping industry are crucial factors to be
considered when deciding whether there has been a meeting of the
minds on a maritime contract”); Samsun Corp. v. Khozestan Mashine
Kar Co., 926 F. Supp. 436, 439 (SDNY 1996) (“[W]here as here the
contract is one of charter party, established practices and customs of
the shipping industry inform the court’s analysis of what the parties
agreed to”); Hough, Admiralty Jurisdiction—Of Late Years, 37 Harv.
L. Rev. 529, 536 (1924) (noting that “maritime law is a body of sea
                     Cite as: 559 U. S. ____ (2010)                    11

                          Opinion of the Court

51a. Accordingly, finding no convincing ground for depart­
ing from the post-Bazzle arbitral consensus, the panel held
that class arbitration was permitted in this case. App. to
Pet. for Cert. 52a. The conclusion is inescapable that the
panel simply imposed its own conception of sound policy.7
                              2
  It is true that the panel opinion makes a few references
to intent, but none of these shows that the panel did any­
thing other than impose its own policy preference. The
opinion states that, under Bazzle, “arbitrators must look
to the language of the parties’ agreement to ascertain the
parties’ intention whether they intended to permit or to
preclude class action,” and the panel added that “[t]his is
also consistent with New York law.” App. to Pet. for Cert.
49a. But the panel had no occasion to “ascertain the
parties’ intention” in the present case because the parties
were in complete agreement regarding their intent. In the
very next sentence after the one quoted above, the panel
——————
customs” and the “custom of the sea . . . includes a customary interpre­
tation of contract language”).
   7 The dissent calls this conclusion “hardly fair,” noting that the word

“ ‘policy’ is not so much as mentioned in the arbitrators’ award.” Post,
at 8. But just as merely saying something is so does not make it so, cf.
United States v. Morrison, 529 U. S. 598, 614 (2000), the arbitrators
need not have said they were relying on policy to make it so. At the
hearing before the arbitration panel, one of the arbitrators recognized
that the body of post-Bazzle arbitration awards on which AnimalFeeds
relied involved “essentially consumer non-value cases.” App. 82a. In
response, counsel for AnimalFeeds defended the applicability of those
awards by asserting that the “vast majority” of the claimants against
petitioners “have negative value claims . . . meaning it costs more to
litigate than you would get if you won.” Id., at 82a–83a. The panel
credited this body of awards in concluding that petitioners had not
demonstrated the parties’ intent to preclude class arbitration, and
further observed that if petitioners’ anticonsolidation precedents
controlled, then “there would appear to be no basis for a class action
absent express agreement among all parties and the putative class
members.” App. to Pet. for Cert. 50a, 51a.
12    STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                     Opinion of the Court

acknowledged that the parties in this case agreed that the
Vegoilvoy charter party was “silent on whether [it] per­
mit[ted] or preclude[d] class arbitration,” but that the
charter party was “not ambiguous so as to call for parol
evidence.” Ibid. This stipulation left no room for an in­
quiry regarding the parties’ intent, and any inquiry into
that settled question would have been outside the panel’s
assigned task.
   The panel also commented on the breadth of the lan­
guage in the Vegoilvoy charter party, see id., at 50a, but
since the only task that was left for the panel, in light of
the parties’ stipulation, was to identify the governing rule
applicable in a case in which neither the language of the
contract nor any other evidence established that the par­
ties had reached any agreement on the question of class
arbitration, the particular wording of the charter party
was quite beside the point.
   In sum, instead of identifying and applying a rule of
decision derived from the FAA or either maritime or New
York law, the arbitration panel imposed its own policy
choice and thus exceeded its powers. As a result, under
§10(b) of the FAA, we must either “direct a rehearing by
the arbitrators” or decide the question that was originally
referred to the panel. Because we conclude that there can
be only one possible outcome on the facts before us, we see
no need to direct a rehearing by the arbitrators.
                             III 

                              A

  The arbitration panel thought that Bazzle “controlled”
the “resolution” of the question whether the Vegoilvoy
charter party “permit[s] this arbitration to proceed on
behalf of a class,” App. to Pet. for Cert. 48a–49a, but that
understanding was incorrect.
  Bazzle concerned contracts between a commercial lender
(Green Tree) and its customers. These contracts con­
                 Cite as: 559 U. S. ____ (2010)           13

                     Opinion of the Court

tained an arbitration clause but did not expressly mention
class arbitration. Nevertheless, an arbitrator conducted
class arbitration proceedings and entered awards for the
customers.
   The South Carolina Supreme Court affirmed the
awards. Bazzle v. Green Tree Financial Corp., 351 S. C.
244, 569 S. E. 2d 349 (2002). After discussing both Sev-
enth Circuit precedent holding that a court lacks authority
to order classwide arbitration under §4 of the FAA, see
Champ v. Siegel Trading Co., 55 F. 3d 269 (1995), and
conflicting California precedent, see Keating v. Superior
Court of Alameda Cty., 31 Cal. 3d 584, 645 P. 2d 1192
(1982), the State Supreme Court elected to follow the
California approach, which it characterized as permitting
a trial court to “order class-wide arbitration under adhe-
sive but enforceable franchise contracts,” 351 S. C., at 259,
266, 569 S. E. 2d, at 357, 360. Under this approach, the
South Carolina court observed, a trial judge must
“[b]alanc[e] the potential inequities and inefficiencies” of
requiring each aggrieved party to proceed on an individual
basis against “resulting prejudice to the drafting party”
and should take into account factors such as “efficiency”
and “equity.” Id., at 260, and n. 15, 569 S. E. 2d, at 357,
and n. 15.
   Applying these standards to the case before it, the South
Carolina Supreme Court found that the arbitration clause
in the Green Tree contracts was “silent regarding class-
wide arbitration.” Id., at 263, 569 S. E. 2d, at 359
(emphasis deleted). The Court described its holding as
follows:
    “[W]e . . . hold that class-wide arbitration may be or-
    dered when the arbitration agreement is silent if it
    would serve efficiency and equity, and would not re-
    sult in prejudice. If we enforced a mandatory, adhe-
    sive arbitration clause, but prohibited class actions in
14    STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                     Opinion of the Court

     arbitration where the agreement is silent, the drafting
     party could effectively prevent class actions against
     it without having to say it was doing so in the
     agreement.” Id., at 266, 569 S. E. 2d, at 360 (footnote
     omitted).
   When Bazzle reached this Court, no single rationale
commanded a majority. The opinions of the Justices who
joined the judgment—that is, the plurality opinion and
JUSTICE STEVENS’ opinion—collectively addressed three
separate questions. The first was which decision maker
(court or arbitrator) should decide whether the contracts
in question were “silent” on the issue of class arbitration.
The second was what standard the appropriate decision
maker should apply in determining whether a contract
allows class arbitration. (For example, does the FAA
entirely preclude class arbitration? Does the FAA permit
class arbitration only under limited circumstances, such
as when the contract expressly so provides? Or is this
question left entirely to state law?) The final question was
whether, under whatever standard is appropriate, class
arbitration had been properly ordered in the case
at hand.
   The plurality opinion decided only the first question,
concluding that the arbitrator and not a court should
decide whether the contracts were indeed “silent” on the
issue of class arbitration. The plurality noted that, “[i]n
certain limited circumstances,” involving “gateway mat­
ters, such as whether the parties have a valid arbitration
agreement at all or whether a concededly binding arbitra­
tion clause applies to a certain type of controversy,” it is
assumed “that the parties intended courts, not arbitra­
tors,” to make the decision. 539 U. S., at 452. But the
plurality opined that the question whether a contract with
an arbitration clause forbids class arbitration “does not
fall into this narrow exception.” Ibid. The plurality there­
                 Cite as: 559 U. S. ____ (2010)           15

                     Opinion of the Court

fore concluded that the decision of the State Supreme
Court should be vacated and that the case should be re­
manded for a decision by the arbitrator on the question
whether the contracts were indeed “silent.” The plurality
did not decide either the second or the third question
noted above.
  JUSTICE STEVENS concurred in the judgment vacating
and remanding because otherwise there would have been
“no controlling judgment of the Court,” but he did not
endorse the plurality’s rationale. Id., at 455 (opinion
concurring in judgment and dissenting in part). He did
not take a definitive position on the first question, stating
only that “[a]rguably the interpretation of the parties’
agreement should have been made in the first instance by
the arbitrator.” Ibid. (emphasis added). But because he
did not believe that Green Tree had raised the question of
the appropriate decision maker, he preferred not to reach
that question and, instead, would have affirmed the deci­
sion of the State Supreme Court on the ground that “the
decision to conduct a class-action arbitration was correct
as a matter of law.” Ibid. Accordingly, his analysis by­
passed the first question noted above and rested instead
on his resolution of the second and third questions. Thus,
Bazzle did not yield a majority decision on any of the three
questions.
                              B
   Unfortunately, the opinions in Bazzle appear to have
baffled the parties in this case at the time of the arbitra­
tion proceeding. For one thing, the parties appear to have
believed that the judgment in Bazzle requires an arbitra­
tor, not a court, to decide whether a contract permits class
arbitration. See App. 89a (transcript of argument before
arbitration panel) (counsel for Stolt-Nielsen states: “What
[Bazzle] says is that the contract interpretation issue is
left up to the arbitrator, that’s the rule in [Bazzle]”). In
16     STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                         Opinion of the Court

fact, however, only the plurality decided that question.
But we need not revisit that question here because the
parties’ supplemental agreement expressly assigned this
issue to the arbitration panel, and no party argues that
this assignment was impermissible.
  Unfortunately, however, both the parties and the arbi-
tration panel seem to have misunderstood Bazzle in an-
other respect, namely, that it established the standard to
be applied by a decision maker in determining whether a
contract may permissibly be interpreted to allow class
arbitration. The arbitration panel began its discussion
by stating that the parties “differ regarding the rule of
interpretation to be gleaned from [the Bazzle] decision.”
App. to Pet. for Cert. 49a (emphasis added). The panel
continued:
     “Claimants argue that Bazzle requires clear language
     that forbids class arbitration in order to bar a class
     action. The Panel, however, agrees with Respondents
     that the test is a more general one—arbitrators must
     look to the language of the parties’ agreement to as-
     certain the parties’ intention whether they intended to
     permit or to preclude class action.” Ibid.
As we have explained, however, Bazzle did not establish
the rule to be applied in deciding whether class arbitration
is permitted.8 The decision in Bazzle left that question
——————
  8 AnimalFeeds   invokes the parties’ supplemental agreement as evi-
dence that petitioners “waived” any claim that the arbitrators could not
construe the arbitration agreement to permit class arbitration. Brief
for Respondent 15. The dissent concludes, likewise, that the existence
of the parties’ supplemental agreement renders petitioners’ argument
under §10(a)(4) “scarcely debatable.” Post, at 7. These arguments are
easily answered by the clear terms of the supplemental agreement
itself. The parties expressly provided that their supplemental agree-
ment “does not alter the scope of the Parties’ arbitration agreements in
any Charter Party Agreement,” and that “[n]either the fact of this
Agreement nor any of its terms may be used to support or oppose any
                      Cite as: 559 U. S. ____ (2010)                    17

                          Opinion of the Court

open, and we turn to it now.
                              IV
   While the interpretation of an arbitration agreement is
generally a matter of state law, see Arthur Andersen LLP
v. Carlisle, 556 U. S. ___, ___ (2009) (slip op., at 6); Perry v.
Thomas, 482 U. S. 483, 493, n. 9 (1987), the FAA imposes
certain rules of fundamental importance, including the
basic precept that arbitration “is a matter of consent, not
coercion,” Volt Information Sciences, Inc. v. Board of
Trustees of Leland Stanford Junior Univ., 489 U. S. 468,
479 (1989).
                              A
  In 1925, Congress enacted the United States Arbitration
Act, as the FAA was formerly known, for the express
purpose of making “valid and enforceable written provi­
sions or agreements for arbitration of disputes arising out
of contracts, maritime transactions, or commerce among
the States or Territories or with foreign nations.” 43 Stat.
883. Reenacted and codified in 1947, see 61 Stat. 669,9 the
——————
argument in favor of a class action arbitration . . . and may not be relied
upon by the Parties, any arbitration panel, any court, or any other
tribunal for such purposes.” App. to Pet. for Cert. 62a–63a (emphasis
added). As with any agreement to arbitrate, we are obliged to enforce
the parties’ supplemental agreement “according to its terms.” Mastro
buono v. Shearson Lehman Hutton, Inc., 514 U. S. 52, 58 (1995). The
question that the arbitration panel was charged with deciding was
whether the arbitration clause in the Vegoilvoy charter party allowed
for class arbitration, and nothing in the supplemental agreement
conferred authority on the arbitrators to exceed the terms of the charter
party itself. Thus, contrary to AnimalFeeds’ argument, these state­
ments show that petitioners did not waive their argument that Bazzle
did not establish the standard for the decision maker to apply when
construing an arbitration clause.
   9 See generally Sturges & Murphy, Some Confusing Matters Relating

to Arbitration Under the United States Arbitration Act, 17 Law &
Contemp. Prob. 580, 580–581, n. 1 (1952) (recounting the history of
the United States Arbitration Act and its 1947 reenactment and
18     STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                      Opinion of the Court

FAA provides, in pertinent part, that a “written provision
in any maritime transaction” calling for the arbitration of
a controversy arising out of such transaction “shall be
valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of
any contract,” 9 U. S. C. §2. Under the FAA, a party to an
arbitration agreement may petition a United States dis­
trict court for an order directing that “arbitration proceed
in the manner provided for in such agreement.” §4. Con­
sistent with these provisions, we have said on numerous
occasions that the central or “primary” purpose of the FAA
is to ensure that “private agreements to arbitrate are
enforced according to their terms.” Volt, supra, at 479;
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U. S.
52, 57, 58 (1995); see also Doctor’s Associates, Inc. v.
Casarotto, 517 U. S. 681, 688 (1996). See generally 9
U. S. C. §4.
   Whether enforcing an agreement to arbitrate or constru­
ing an arbitration clause, courts and arbitrators must
“give effect to the contractual rights and expectations of
the parties.” Volt, supra, at 479. In this endeavor, “as
with any other contract, the parties’ intentions control.”
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc.,
473 U. S. 614, 626 (1985). This is because an arbitrator
derives his or her powers from the parties’ agreement to
forgo the legal process and submit their disputes to pri­
vate dispute resolution. See AT&T Technologies, Inc. v.
Communications Workers, 475 U. S. 643, 648–649 (1986)
(“[A]rbitrators derive their authority to resolve disputes
only because the parties have agreed in advance to submit
such grievances to arbitration”); Mitsubishi Motors, supra,
at 628 (“By agreeing to arbitrate . . . , [a party] trades the
procedures and opportunity for review of the courtroom for
the simplicity, informality, and expedition of arbitration”);
——————
codification).
                 Cite as: 559 U. S. ____ (2010)           19

                     Opinion of the Court

see also Steelworkers v. Warrior & Gulf Nav. Co., 363 U. S.
574, 581 (1960) (an arbitrator “has no general charter to
administer justice for a community which transcends the
parties” but rather is “part of a system of self-government
created by and confined to the parties” (internal quotation
marks omitted)).
   Underscoring the consensual nature of private dispute
resolution, we have held that parties are “ ‘generally free
to structure their arbitration agreements as they see fit.’ ”
Mastrobuono, supra, at 57; see also AT&T Technologies,
supra, at 648–649. For example, we have held that par­
ties may agree to limit the issues they choose to arbitrate,
see Mitsubishi Motors, supra, at 628, and may agree on
rules under which any arbitration will proceed, Volt,
supra, at 479. They may choose who will resolve specific
disputes. E.g., App. 30a; Alexander v. Gardner-Denver
Co., 415 U. S. 36, 57 (1974); Burchell v. Marsh, 17 How.
344, 349 (1855); see also International Produce, Inc. v.
A/S Rosshavet, 638 F. 2d 548, 552 (CA2) (“The most
sought-after arbitrators are those who are prominent and
experienced members of the specific business community
in which the dispute to be arbitrated arose”), cert. denied,
451 U. S. 1017 (1981).
   We think it is also clear from our precedents and the
contractual nature of arbitration that parties may specify
with whom they choose to arbitrate their disputes. See
EEOC v. Waffle House, Inc., 534 U. S. 279, 289 (2002)
(“[N]othing in the [FAA] authorizes a court to compel
arbitration of any issues, or by any parties, that are not
already covered in the agreement” (emphasis added));
Moses H. Cone Memorial Hospital v. Mercury Constr.
Corp., 460 U. S. 1, 20 (1983) (“[A]n arbitration agreement
must be enforced notwithstanding the presence of other
persons who are parties to the underlying dispute but not
to the arbitration agreement”); Steelworkers, supra, at 581
(an arbitrator “has no general charter to administer jus­
20    STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                     Opinion of the Court

tice for a community which transcends the parties” (inter­
nal quotation marks omitted)); accord, First Options of
Chicago, Inc. v. Kaplan, 514 U. S. 938, 943 (1995)
(“[A]rbitration is simply a matter of contract between the
parties; it is a way to resolve those disputes—but only
those disputes—that the parties have agreed to submit to
arbitration” (emphasis added)). It falls to courts and
arbitrators to give effect to these contractual limitations,
and when doing so, courts and arbitrators must not lose
sight of the purpose of the exercise: to give effect to the
intent of the parties. Volt, 489 U. S., at 479.
                              B
   From these principles, it follows that a party may not be
compelled under the FAA to submit to class arbitration
unless there is a contractual basis for concluding that the
party agreed to do so. In this case, however, the arbitra­
tion panel imposed class arbitration even though the
parties concurred that they had reached “no agreement”
on that issue, see App. 77a. The critical point, in the view
of the arbitration panel, was that petitioners did not “es­
tablish that the parties to the charter agreements in­
tended to preclude class arbitration.” App. to Pet. for Cert.
51a. Even though the parties are sophisticated business
entities, even though there is no tradition of class arbitra­
tion under maritime law, and even though AnimalFeeds
does not dispute that it is customary for the shipper to
choose the charter party that is used for a particular
shipment, the panel regarded the agreement’s silence on
the question of class arbitration as dispositive. The
panel’s conclusion is fundamentally at war with the foun­
dational FAA principle that arbitration is a matter of
consent.
   In certain contexts, it is appropriate to presume that
parties that enter into an arbitration agreement implicitly
authorize the arbitrator to adopt such procedures as are
                 Cite as: 559 U. S. ____ (2010)           21

                     Opinion of the Court

necessary to give effect to the parties’ agreement. Thus,
we have said that “ ‘ “procedural” questions which grow out
of the dispute and bear on its final disposition’ are pre­
sumptively not for the judge, but for an arbitrator, to
decide.” Howsam v. Dean Witter Reynolds, Inc., 537 U. S.
79, 84 (2002) (quoting John Wiley & Sons, Inc. v.
Livingston, 376 U. S. 543, 557 (1964)). This recognition is
grounded in the background principle that “[w]hen the
parties to a bargain sufficiently defined to be a contract
have not agreed with respect to a term which is essential
to a determination of their rights and duties, a term which
is reasonable in the circumstances is supplied by the
court.” Restatement (Second) of Contracts §204 (1979).
   An implicit agreement to authorize class-action arbitra­
tion, however, is not a term that the arbitrator may infer
solely from the fact of the parties’ agreement to arbitrate.
This is so because class-action arbitration changes the
nature of arbitration to such a degree that it cannot be
presumed the parties consented to it by simply agreeing to
submit their disputes to an arbitrator. In bilateral arbi­
tration, parties forgo the procedural rigor and appellate
review of the courts in order to realize the benefits of
private dispute resolution: lower costs, greater efficiency
and speed, and the ability to choose expert adjudicators to
resolve specialized disputes.        See Gilmer v. Inter
state/Johnson Lane Corp., 500 U. S. 20, 31 (1991); Mitsu
bishi Motors, 473 U. S., at 628; see also 14 Penn Plaza
LLC v. Pyett, 556 U. S. ___, ___ (2009) (slip. op., at 7–8)
(“Parties generally favor arbitration precisely because of
the economics of dispute resolution” (citing Circuit City
Stores, Inc. v. Adams, 532 U. S. 105, 123 (2001)); Gardner-
Denver, supra, at 57 (“Parties usually choose an arbitrator
because they trust his knowledge and judgment concern­
ing the demands and norms of industrial relations”). But
the relative benefits of class-action arbitration are much
less assured, giving reason to doubt the parties’ mutual
22    STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                     Opinion of the Court

consent to resolve disputes through class-wide arbitration.
Cf. First Options, supra, at 945 (noting that “one can
understand why courts might hesitate to interpret silence
or ambiguity on the ‘who should decide arbitrability’ point
as giving the arbitrators that power, for doing so might too
often force unwilling parties to arbitrate” contrary to their
expectations).
   Consider just some of the fundamental changes brought
about by the shift from bilateral arbitration to class-action
arbitration. An arbitrator chosen according to an agreed­
upon procedure, see, e.g., supra, at 2, no longer resolves a
single dispute between the parties to a single agreement,
but instead resolves many disputes between hundreds or
perhaps even thousands of parties. See App. 86a (“[W]e
believe domestic class members could be in the hundreds”
and that “[t]here could be class members that ship to and
from the U. S. who are not domestic who we think would
be covered”); see also, e.g., Bazzle, 351 S. C., at 251, 569
S. E. 2d, at 352–353 (involving a class of 1,899 individuals
that was awarded damages, fees, and costs of more than
$14 million by a single arbitrator). Under the Class Rules,
“the presumption of privacy and confidentiality” that
applies in many bilateral arbitrations “shall not apply in
class arbitrations,” see Addendum to Brief for American
Arbitration Association as Amicus Curiae 10a (Class Rule
9(a)), thus potentially frustrating the parties’ assumptions
when they agreed to arbitrate. The arbitrator’s award no
longer purports to bind just the parties to a single arbitra­
tion agreement, but adjudicates the rights of absent par­
ties as well. Cf. Ortiz v. Fibreboard Corp., 527 U. S. 815,
846 (1999) (noting that “the burden of justification rests on
the exception” to the general rule that “one is not bound by
a judgment in personam in a litigation in which he is not
designated as a party or to which he has not been made a
party by service of process” (internal quotation marks
omitted)). And the commercial stakes of class-action
                     Cite as: 559 U. S. ____ (2010)                  23

                         Opinion of the Court

arbitration are comparable to those of class-action litiga­
tion, cf. App. in No. 06–3474–cv (CA2), at A–77, A–79,
¶¶30, 31, 40, even though the scope of judicial review is
much more limited, see Hall Street, 552 U. S., at 588. We
think that the differences between bilateral and class­
action arbitration are too great for arbitrators to presume,
consistent with their limited powers under the FAA, that
the parties’ mere silence on the issue of class-action arbi­
tration constitutes consent to resolve their disputes in
class proceedings.10
   The dissent minimizes these crucial differences by
characterizing the question before the arbitrators as being
merely what “procedural mode” was available to present
AnimalFeeds’ claims. Post, at 9. If the question were that
simple, there would be no need to consider the parties’
intent with respect to class arbitration. See Howsam,
supra, at 84 (committing “procedural questions” presump­
tively to the arbitrator’s discretion (internal quotation
marks omitted)). But the FAA requires more. Contrary to
the dissent, but consistent with our precedents emphasiz­
ing the consensual basis of arbitration, we see the ques­
tion as being whether the parties agreed to authorize class
arbitration. Here, where the parties stipulated that there
was “no agreement” on this question, it follows that the
parties cannot be compelled to submit their dispute to
class arbitration.
                             V
   For these reasons, the judgment of the Court of Appeals
is reversed, and the case is remanded for further proceed­
ings consistent with this opinion.
                                           It is so ordered.
——————
  10 We have no occasion to decide what contractual basis may support
a finding that the parties agreed to authorize class-action arbitration.
Here, as noted, the parties stipulated that there was “no agreement” on
the issue of class-action arbitration. App. 77a.
24   STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                   Opinion of the Court

  JUSTICE SOTOMAYOR took no part in the consideration or
decision of this case.
                     Cite as: 559 U. S. ____ (2010)                     1

                        GINSBURG, J., dissenting

SUPREME COURT OF THE UNITED STATES
                              _________________

                              No. 08–1198
                              _________________

     STOLT-NIELSEN S. A., ET AL., PETITIONERS v.

       ANIMALFEEDS INTERNATIONAL CORP. 

 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

           APPEALS FOR THE SECOND CIRCUIT

                            [April 27, 2010]

  JUSTICE GINSBURG, with whom JUSTICE STEVENS and
JUSTICE BREYER join, dissenting.
  When an arbitration clause is silent on the question,
may arbitration proceed on behalf of a class? The Court
prematurely takes up that important question and, in
dulging in de novo review, overturns the ruling of experi
enced arbitrators.1
  The Court errs in addressing an issue not ripe for judi
cial review. Compounding that error, the Court substi
tutes its judgment for that of the decisionmakers chosen
by the parties. I would dismiss the petition as improvi
dently granted.2 Were I to reach the merits, I would ad
here to the strict limitations the Federal Arbitration Act
(FAA), 9 U. S. C. §1 et seq., places on judicial review of
arbitral awards. §10. Accordingly, I would affirm the
judgment of the Second Circuit, which rejected petitioners’
plea for vacation of the arbitrators’ decision.
                              I
  As the Court recounts, ante, at 2–6, this case was
launched as a class action in federal court charging named
——————
  1 All  three panelists are leaders in the international-dispute
resolution bar. See Brief for Respondent 8–9.
  2 Alternatively, I would vacate with instructions to dismiss for lack of

present jurisdiction. See Reply to Brief in Opposition 12, n. 6.
2      STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                        GINSBURG, J., dissenting

ocean carriers (collectively, Stolt-Nielsen) with a conspir
acy to extract supracompetitive prices from their custom
ers (buyers of ocean-transportation services). That court
action terminated when the Second Circuit held, first, that
the parties’ transactions were governed by contracts (char
ter parties) with enforceable arbitration clauses, and
second, that the antitrust claims were arbitrable. JLM
Industries, Inc. v. Stolt-Nielsen S. A., 387 F. 3d 163, 175,
181 (2004).
   Cargo-shipper AnimalFeeds International Corp. (Ani
malFeeds) thereupon filed a demand for class arbitration
of the antitrust-conspiracy claims.3 Stolt-Nielsen con
tested AnimalFeeds’ right to proceed on behalf of a class,
but agreed to submission of that threshold dispute to a
panel of arbitrators. Thus, the parties entered into a
supplemental agreement to choose arbitrators and in
struct them to “follow . . . Rul[e] 3 . . . of the American
Arbitration Association’s Supplementary Rules for Class
Arbitrations.” App. to Pet. for Cert. 59a. Rule 3, in turn,
directed the panel to “determine . . . whether the applica
ble arbitration clause permits the arbitration to proceed
on behalf of . . . a class.” App. 56a.
   After receiving written submissions and hearing argu
ments, the arbitration panel rendered a clause
construction award. It decided unanimously—and only—
that the “arbitration claus[e] [used in the parties’ stan
dard-form shipping contracts] permit[s] this . . . arbitra
tion to proceed as a class arbitration.” App. to Pet. for
Cert. 52a. Stolt-Nielsen petitioned for court review urging
vacatur of the clause-construction award on the ground
——————
   3 Counsel for AnimalFeeds submitted in arbitration that “[i]t would

cost . . . the vast majority of absent class members, and indeed the
current claimants, . . . more to litigate the matter on an individual basis
than they could recover. An antitrust case, particularly involving an
international cartel[,] . . . is extraordinarily difficult and expensive to
litigate.” App. 82a (paragraph break omitted).
                  Cite as: 559 U. S. ____ (2010)            3

                    GINSBURG, J., dissenting

that “the arbitrators [had] exceeded their powers.”
§10(a)(4). The Court of Appeals upheld the award: “Be
cause the parties specifically agreed that the arbitration
panel would decide whether the arbitration claus[e] per
mitted class arbitration,” the Second Circuit reasoned,
“the arbitration panel did not exceed its authority in decid
ing that issue—irrespective of whether it decided the issue
correctly.” 548 F. 3d 85, 101 (2008).
                                II
   I consider, first, the fitness of the arbitrators’ clause
construction award for judicial review. The arbitrators
decided the issue, in accord with the parties’ supplemental
agreement, “as a threshold matter.” App. 56a. Their
decision that the charter-party arbitration clause permit
ted class arbitration was abstract and highly interlocu
tory. The panel did not decide whether the particular
claims AnimalFeeds advanced were suitable for class
resolution, see App. to Pet. for Cert. 48a–49a; much less
did it delineate any class or consider whether, “if a class is
certified, . . . members of the putative class should be
required to ‘opt in’ to th[e] proceeding,” id., at 52a.
   The Court, ante, at 6, n. 2, does not persuasively justify
judicial intervention so early in the game or convincingly
reconcile its adjudication with the firm final-judgment
rule prevailing in the federal court system. See, e.g., 28
U. S. C. §1257 (providing for petitions for certiorari from
“[f]inal judgments or decrees” of state courts); §1291 (pro
viding for Court of Appeals review of district court “final
decisions”); Catlin v. United States, 324 U. S. 229, 233
(1945) (describing “final decision” generally as “one which
ends the litigation on the merits and leaves nothing for
the court to do but execute the judgment”).
   We have equated to “final decisions” a slim set of “col
lateral orders” that share these characteristics: They “are
conclusive, [they] resolve important questions separate
4      STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                        GINSBURG, J., dissenting

from the merits, and [they] are effectively unreviewable on
appeal from the final judgment in the underlying action.”
Mohawk Industries, Inc. v. Carpenter, 558 U. S. ___, ___
(2009) (slip op., at 4–5) (quoting Swint v. Chambers
County Comm’n, 514 U. S. 35, 42 (1995)). “[O]rders relat
ing to class certification” in federal court, it is settled, do
not fit that bill. Coopers & Lybrand v. Livesay, 437 U. S.
463, 470 (1978).4
   Congress, of course, can provide exceptions to the “final
decision” rule. Prescriptions in point include §1292 (im
mediately appealable “[i]nterlocutory decisions”); §2072(c)
(authorizing promulgation of rules defining when a dis
trict court ruling is final for purposes of appeal under
§1291); Fed. Rule Civ. Proc. 23(f) (pursuant to §1292(e),
accords Courts of Appeals discretion to permit appeals
from district court orders granting or denying class-action
certification); Fed. Rule Civ. Proc. 54(b) (providing for
“entry of a final judgment as to one or more, but fewer
than all, of the claims or parties”). Did Congress provide
for immediate review of the preliminary ruling in question
here?
   Section 16 of the FAA, governing appellate review of
district court arbitration orders, lists as an appealable
disposition a district court decision “confirming or denying
confirmation of an award or partial award.” 9 U. S. C.
§16(a)(1)(D). Notably, the arbitrators in the matter at
hand labeled their decision “Partial Final Clause Con
struction Award.” App. to Pet. for Cert. 45a. It cannot be
true, however, that parties or arbitrators can gain instant
review by slicing off a preliminary decision or a procedural
——————
  4 Federal Rule of Civil Procedure 23(f), adopted in response to Coopers

& Lybrand, gives Courts of Appeals discretion to permit an appeal from
an order granting or denying class-action certification. But the rule
would not permit review of a preliminary order of the kind at
issue here, i.e., one that defers decision whether to grant or deny
certification.
                      Cite as: 559 U. S. ____ (2010)                      5

                         GINSBURG, J., dissenting

order and declaring its resolution a “partial award.” Cf.
Hall Street Associates, L. L. C. v. Mattel, Inc., 552 U. S.
576, 588 (2008) (FAA §§9–11, which provide for expedited
review to confirm, vacate, or modify arbitration awards,
“substantiat[e] a national policy favoring arbitration with
just the limited review needed to maintain arbitration’s
essential virtue of resolving disputes straightaway.”).
    Lacking this Court’s definitive guidance, some Courts of
Appeals have reviewed arbitration awards “finally and
definitely dispos[ing] of a separate independent claim.”
E.g., Metallgesellschaft A. G. v. M/V Capitan Constante,
790 F. 2d 280, 283 (CA2 1986).5 Others have considered
“partial award[s]” that finally “determin[e] liability, but
. . . not . . . damages.” E.g., Hart Surgical, Inc. v. Ultraci
sion, Inc., 244 F. 3d 231, 234 (CA1 2001).6 Another con
firmed an interim ruling on a “separate, discrete, inde
pendent, severable issue.” Island Creek Coal Sales Co. v.
Gainesville, 729 F. 2d 1046, 1049 (CA6 1984) (internal
quotation marks omitted), abrogated on other grounds by
Cortez Byrd Chips, Inc. v. Bill Harbert Constr. Co., 529
U. S. 193 (2000).
    Receptivity to review of preliminary rulings rendered by
arbitrators, however, is hardly universal. See Dealer
Computer Servs., Inc. v. Dub Herring Ford, 547 F. 3d 558
(CA6 2008) (arbitration panel’s preliminary ruling that
contract did not bar class proceedings held not ripe for
review; arbitrators had not yet determined that arbitra
tion should proceed on behalf of a class); Metallgesellschaft
A. G., 790 F. 2d, at 283, 285 (Feinberg, C. J., dissenting)
——————
  5 See Metallgesellschaft A. G., 790 F. 2d, at 283, 284 (Feinberg, C. J.,

dissenting) (describing exception for separate and independent claims
as “creat[ing], in effect, an arbitration analogue to [Fed. Rule Civ. Proc.]
54(b)”).
  6 But see Liberty Mut. Ins. Co. v. Wetzel, 424 U. S. 737 (1976) (district

court order determining liability but reserving decision on damages
held not immediately appealable).
6      STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                       GINSBURG, J., dissenting

(“[Piecemeal review] will make arbitration more like liti
gation, a result not to be desired. It would be better to
minimize the number of occasions the parties to arbitra
tion can come to court; on the whole, this benefits the
parties, the arbitration process and the courts.”).
   While lower court opinions are thus divided, this much
is plain: No decision of this Court, until today, has ever
approved immediate judicial review of an arbitrator’s
decision as preliminary as the “partial award” made in
this case.7
                             III
  Even if Stolt-Nielsen had a plea ripe for judicial review,
the Court should reject it on the merits. Recall that the
parties jointly asked the arbitrators to decide, initially,
whether the arbitration clause in their shipping contracts
permitted class proceedings. See supra, at 2. The panel
did just what it was commissioned to do. It construed the
broad arbitration clause (covering “[a]ny dispute arising
from the making, performance or termination of this
Charter Party,” App. to Pet. for Cert. 47a) and ruled,
expressly and only, that the clause permitted class arbi
tration. The Court acts without warrant in allowing Stolt-
Nielsen essentially to repudiate its submission of the
contract-construction issue to the arbitration panel, and to
gain, in place of the arbitrators’ judgment, this Court’s de
novo determination.
                            A
    The controlling FAA prescription, §10(a),8 authorizes a
——————
  7 The parties agreed that the arbitrators would issue a “partial final

award,” and then “stay all proceedings . . . to permit any party to move
a court of competent jurisdiction to confirm or to vacate” the award.
App. 56a. But an arbitration agreement, we have held, cannot “expand
judicial review” available under the FAA. Hall Street Associates,
L. L. C. v. Mattel, Inc., 552 U. S. 576, 587 (2008).
  8 Title 9 U. S. C. §10(a) provides:
                     Cite as: 559 U. S. ____ (2010)                   7

                       GINSBURG, J., dissenting

court to vacate an arbitration panel’s decision “only in
very unusual circumstances.” First Options of Chicago,
Inc. v. Kaplan, 514 U. S. 938, 942 (1995). The four
grounds for vacatur codified in §10(a) restate the long
standing rule that, “[i]f [an arbitration] award is within
the submission, and contains the honest decision of the
arbitrators, after a full and fair hearing of the parties, a
court . . . will not set [the award] aside for error, either in
law or fact.” Burchell v. Marsh, 17 How. 344, 349 (1855).
  The sole §10 ground Stolt-Nielsen invokes for vacating
the arbitrators’ decision is §10(a)(4). The question under
that provision is “whether the arbitrators had the power,
based on the parties’ submissions or the arbitration
agreement, to reach a certain issue, not whether the arbi
trators correctly decided that issue.” DiRussa v. Dean
Witter Reynolds Inc., 121 F. 3d 818, 824 (CA2 1997); Com
prehensive Accounting Corp. v. Rudell, 760 F. 2d 138, 140
(CA7 1985). The parties’ supplemental agreement, refer
ring the class-arbitration issue to an arbitration panel,
undoubtedly empowered the arbitrators to render their
clause-construction decision.      That scarcely debatable
point should resolve this case.

——————
  “In any of the following cases the United States court in and for the
district wherein the award was made may make an order vacating the
award upon the application of any party to the arbitration—
  “(1) where the award was procured by corruption, fraud, or undue
means;
  “(2) where there was evident partiality or corruption in the arbitra
tors, or either of them;
  “(3) where the arbitrators were guilty of misconduct in refusing to
postpone the hearing, upon sufficient cause shown, or in refusing to
hear evidence pertinent and material to the controversy; or of any other
misbehavior by which the rights of any party have been prejudiced; or
  “(4) where the arbitrators exceeded their powers, or so imperfectly
executed them that a mutual, final, and definite award upon the
subject matter submitted was not made.”
8     STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                     GINSBURG, J., dissenting

                              B
    The Court’s characterization of the arbitration panel’s
decision as resting on “policy,” not law, is hardly fair
comment, for “policy” is not so much as mentioned in the
arbitrators’ award. Instead, the panel tied its conclusion
that the arbitration clause permitted class arbitration,
App. to Pet. for Cert. 52a, to New York law, federal mari
time law, and decisions made by other panels pursuant to
Rule 3 of the American Arbitration Association’s Supple
mentary Rules for Class Arbitrations. Id., at 49a–50a.
    At the outset of its explanation, the panel rejected the
argument, proffered by AnimalFeeds, that this Court’s
decision in Green Tree Financial Corp. v. Bazzle, 539 U. S.
444 (2003), settled the matter by “requir[ing] clear lan
guage that forbids class arbitration in order to bar a class
action.” App. to Pet. for Cert. 49a (emphasis added).
Agreeing with Stolt-Nielsen in this regard, the panel said
that the test it employed looked to the language of the
particular agreement to gauge whether the parties “in
tended to permit or to preclude class action[s].” Ibid.
Concentrating on the wording of the arbitration clause,
the panel observed, is “consistent with New York law as
articulated by the [New York] Court of Appeals . . . and
with federal maritime law.” Ibid.9
    Emphasizing the breadth of the clause in question—
“ ‘any dispute arising from the making, performance or
termination of this Charter Party’ shall be put to arbitra
tion,” id., at 50a—the panel noted that numerous other
partial awards had relied on language similarly compre
hensive to permit class proceedings “in a wide variety of
settings.” Id., at 49a–50a. The panel further noted “that
many of the other panels [had] rejected arguments similar
to those advanced by [Stolt-Nielsen].” Id., at 50a.
——————
  9 On New York law, the panel referred to Evans v. Famous Music

Corp., 1 N. Y. 3d 452, 807 N. E. 2d 869 (2004).
                  Cite as: 559 U. S. ____ (2010)             9

                    GINSBURG, J., dissenting

   The Court features a statement counsel for Animal-
Feeds made at the hearing before the arbitration panel,
and maintains that it belies any argument that the clause
in question permits class arbitration: “All the parties
agree that when a contract is silent on an issue there’s
been no agreement that has been reached on that issue.”
Ante, at 4 (quoting App. 77a); see ante, at 8, 11–12, 20, 23,
and n. 10. The sentence quoted from the hearing tran
script concluded: “therefore there has been no agreement
to bar class arbitrations.” App. 77a (emphasis added).
Counsel quickly clarified his position: “It’s also undisputed
that the arbitration clause here contains broad language
and this language should be interpreted to permit class
arbitrations.” Id., at 79a. See also id., at 80a (noting
consistent recognition by arbitration panels that “a silent
broadly worded arbitration clause, just like the one at
issue here, should be construed to permit class arbitra
tion”); id., at 88a (“[B]road . . . language . . . silent as to
class proceedings should be interpreted to permit a class
proceeding.”).
   Stolt-Nielsen, the panel acknowledged, had vigorously
argued, with the support of expert testimony, that “the
bulk of international shippers would never intend to have
their disputes decided in a class arbitration.” App. to Pet.
for Cert. 52a. That concern, the panel suggested, might be
met at a later stage; “if a class is certified,” the panel
noted, class membership could be confined to those who
affirmatively “ ‘opt in’ ” to the proceeding. Ibid.
   The question properly before the Court is not whether
the arbitrators’ ruling was erroneous, but whether the
arbitrators “exceeded their powers.” §10(a)(4). The arbi
trators decided a threshold issue, explicitly committed to
them, see supra, at 2, about the procedural mode available
for presentation of AnimalFeeds’ antitrust claims. Cf.
Shady Grove Orthopedic Associates, P. A. v. Allstate Ins.
Co., 559 U. S. ___, ___ (2010) (plurality opinion) (slip op.,
10      STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                     GINSBURG, J., dissenting

at 13–14) (“[R]ules allowing multiple claims (and claims
by or against multiple parties) to be litigated together . . .
neither change plaintiffs’ separate entitlements to relief
nor abridge defendants’ rights; they alter only how the
claims are processed.”). That the arbitrators endeavored
to perform their assigned task honestly is not contested.
“Courts . . . do not sit to hear claims of factual or legal
error by an arbitrator as an appellate court does in review
ing decisions of lower courts.” Paperworkers v. Misco, Inc.,
484 U. S. 29, 38 (1987). The arbitrators here not merely
“arguably,” but certainly, “constru[ed] . . . the contract”
with fidelity to their commission. Ibid. This Court, there
fore, may not disturb the arbitrators’ judgment, even if
convinced that “serious error” infected the panel’s award.
Ibid.
                              C
   The Court not only intrudes on a decision the parties
referred to arbitrators. It compounds the intrusion by
according the arbitrators no opportunity to clarify their
decision and thereby to cure the error the Court perceives.
Section 10(b), the Court asserts, invests in this tribunal
authority to “decide the question that was originally re
ferred to the panel.” Ante, at 12. The controlling provi
sion, however, says nothing of the kind. Section 10(b)
reads, in full: “If an award is vacated and the time within
which the agreement required the award to be made has
not expired, the court may, in its discretion, direct a re
hearing by the arbitrators.” (Emphasis added.) Just as
§10(a)(4) provides no justification for the Court’s disposi
tion, see supra, at 6–9 and this page, so, too, §10(b) pro
vides no grounding for the Court’s peremptory action.
                             IV
                              A
     For arbitrators to consider whether a claim should
                     Cite as: 559 U. S. ____ (2010)                  11

                       GINSBURG, J., dissenting

proceed on a class basis, the Court apparently demands
contractual language one can read as affirmatively author
izing class arbitration. See ante, at 20 (“[A] party may not
be compelled under the FAA to submit to class arbitration
unless there is a contractual basis for concluding that the
party agreed to do so.”); ante, at 23. The breadth of the
arbitration clause, and the absence of any provision waiv
ing or banning class proceedings,10 will not do. Ante, at
20–23.
    The Court ties the requirement of affirmative authoriza
tion to “the basic precept that arbitration ‘is a matter of
consent, not coercion.’ ” Ante, at 17 (quoting Volt Informa
tion Sciences, Inc. v. Board of Trustees of Leland Stanford
Junior Univ., 489 U. S. 468, 479 (1989)). Parties may
“specify with whom they choose to arbitrate,” the Court
observes, just as they may “limit the issues they choose to
arbitrate.” Ante, at 19. But arbitrators, in delineating an
appropriate class, need not, and should not, disregard
such contractual constraints. In this case, for example,
AnimalFeeds proposes to pursue, on behalf of a class, only
“claims . . . arising out of any [charter party agreement]
. . . that provides for arbitration.” App. to Pet. for Cert.
56a (emphasis added). Should the arbitrators certify the
proposed class, they would adjudicate only the rights of
persons “with whom” Stolt-Nielsen agreed to arbitrate,
and only “issues” subject to arbitration. Ante, at 19 (em
phasis omitted).
——————
  10 Several courts have invalidated contractual bans on, or waivers of,

class arbitration because proceeding on an individual basis was not
feasible in view of the high costs entailed and the slim benefits achiev
able. See, e.g., In re American Express Merchants’ Litigation, 554 F. 3d
300, 315–316, 320 (CA2 2009); Kristian v. Comcast Corp., 446 F. 3d 25,
55, 59 (CA1 2006); Discover Bank v. Superior Court, 36 Cal. 4th 148,
162–163, 113 P. 3d 1100, 1110 (2005); Leonard v. Terminix Int’l Co.,
LP, 854 So. 2d 529, 539 (Ala. 2002). Were there no right to proceed on
behalf of a class in the first place, however, a provision banning or
waiving recourse to this aggregation device would be superfluous.
12    STOLT-NIELSEN S. A. v. ANIMALFEEDS INT’L CORP.

                    GINSBURG, J., dissenting

   The Court also links its affirmative-authorization re
quirement to the parties’ right to stipulate rules under
which arbitration may proceed. See ibid. The question,
however, is the proper default rule when there is no stipu
lation. Arbitration provisions, this Court has noted, are a
species of forum-selection clauses. See Scherk v. Alberto-
Culver Co., 417 U. S. 506, 519 (1974). Suppose the parties
had chosen a New York judicial forum for resolution of
“any dispute” involving a contract for ocean carriage of
goods. There is little question that the designated court,
state or federal, would have authority to conduct claims
like AnimalFeeds’ on a class basis. Why should the class
action prospect vanish when the “any dispute” clause is
contained in an arbitration agreement? Cf. Connecticut
General Life Ins. Co. v. Sun Life Assurance Co. of Canada,
210 F. 3d 771, 774–776 (CA7 2000) (reading contract’s
authorization to arbitrate “[a]ny dispute” to permit con
solidation of arbitrations). If the Court is right that arbi
trators ordinarily are not equipped to manage class pro
ceedings, see ante, at 21–22, then the claimant should
retain its right to proceed in that format in court.
                               B
   When adjudication is costly and individual claims are no
more than modest in size, class proceedings may be “the
thing,” i.e., without them, potential claimants will have
little, if any, incentive to seek vindication of their rights.
Amchem Products, Inc. v. Windsor, 521 U. S. 591, 617
(1997); Carnegie v. Household Int’l, Inc., 376 F. 3d 656,
661 (CA7 2004) (“The realistic alternative to a class action
is not 17 million individual suits, but zero individual suits,
as only a lunatic or a fanatic sues for $30.”). Mindful that
disallowance of class proceedings severely shrinks the
dimensions of the case or controversy a claimant can
mount, I note some stopping points in the Court’s decision.
   First, the Court does not insist on express consent to
                 Cite as: 559 U. S. ____ (2010)          13

                   GINSBURG, J., dissenting

class arbitration. Class arbitration may be ordered if
“there is a contractual basis for concluding that the
part[ies] agreed” “to submit to class arbitration”. Ante, at
20; see ante, at 23, n. 10 (“We have no occasion to decide
what contractual basis may support a finding that the
parties agreed to authorize class-action arbitration.”).
Second, by observing that “the parties [here] are sophisti
cated business entities,” and “that it is customary for the
shipper to choose the charter party that is used for a
particular shipment,” the Court apparently spares from its
affirmative-authorization requirement contracts of adhe
sion presented on a take-it-or-leave-it basis. Ante, at 20.
While these qualifications limit the scope of the Court’s
decision, I remain persuaded that the arbitrators’ judg
ment should not have been disturbed.
                       *     *    *
  For the foregoing reasons, I would dismiss the petition
for want of a controversy ripe for judicial review. Were I
to reach the merits, I would affirm the Second Circuit’s
judgment confirming the arbitrators’ clause-construction
decision.