Arbitration United States

Goldman Sachs Seeks Supreme Court Review of Arbitration Enforcement in Bankruptcy

Published 2026-06-26 1 source Arbitration Automatic Stay Bankruptcy Federal Arbitration Act Supreme Court United States United States

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TL;DR

  • Goldman Sachs has filed a petition with the US Supreme Court.
  • The petition seeks clarification on whether bankruptcy courts can override the Federal Arbitration Act.
  • The case concerns the enforcement of arbitration agreements in automatic stay violation claims under Section 362(k) of bankruptcy law.
  • The petition notes the frequency of such issues in bankruptcy and district courts.

Overview

Goldman Sachs has filed a petition for certiorari to the US Supreme Court, asking the Court to clarify the circumstances in which bankruptcy courts may refuse to enforce arbitration agreements under the Federal Arbitration Act (FAA) when claims are brought under Section 362(k) of bankruptcy law regarding violations of the automatic stay.

What Happened

On Tuesday, a petition for certiorari was docketed by Goldman Sachs at the US Supreme Court.

Goldman Sachs is seeking the Court's guidance on the authority of bankruptcy courts to override the FAA by refusing to enforce arbitration agreements in the context of Section 362(k) claims.

Section 362(k) concerns creditor violations of the automatic stay in bankruptcy, blocking most legal actions such as collections and lawsuits.

The petition argues that this issue arises frequently in bankruptcy and district courts, and suggests that a Supreme Court ruling would provide needed clarity.

Context

The Federal Arbitration Act usually requires courts to enforce arbitration agreements.

However, bankruptcy courts have sometimes declined to enforce such agreements when they conflict with the purposes of bankruptcy law, especially regarding the automatic stay, which protects debtors from most litigation during bankruptcy.

Section 362(k) provides for damages against creditors violating the stay, and whether these claims must be arbitrated instead of heard in bankruptcy court remains unsettled.

Why It Matters

  • The Supreme Court's decision could clarify how bankruptcy courts handle arbitration agreements, potentially affecting the rights of creditors and debtors nationwide.
  • A ruling may influence how frequently arbitration can override or must yield to bankruptcy court jurisdiction, especially regarding creditor misconduct.

Sources

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