Originally from:

Journal of American Arbitration (JAA) - Vol. 5, No. 1

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Journal of American Arbitration (JAA)

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ARTICLES

An Arbitrator’s Cyclical Enforcement of State
Laws Despite FAA Preemption and the Ability
to Decide Contractual Illegality: The
Application of the FAA in Hotels Nevada,
L.L.C. v. Bridge Banc, L.L.C.
By Barzilai Axelrod

I. OVERVIEW
Bridge Banc, L.L.C., a California corporation, sought to compel
arbitration of a loan dispute with Hotels Nevada, L.L.C., a Nevada
corporation, that arose out of a breach of their loan agreement.1 In May
of 2003, the parties had contractually executed a loan commitment that
contained an arbitration clause. 2 Three months later, in August 2003,
Bridge Banc filed for arbitration, claiming Hotels Nevada had breached
the loan agreement. 3 The arbitration clause provided for all disputes to
be compelled to arbitration, including those relating to contractual
validity, breach thereof, and the scope or applicability of the agreement
to arbitrate.4 A lone arbitrator was to conduct the proceedings in Los
Angeles, California, “in accordance with the laws of the State of