Originally from:

AAA Handbook on Arbitration Practice - Second Edition

Preview Page
 

CHAPTER 5

MAJOR ARBITRATION ISSUES RECENTLY
ADDRESSED BY COURTS
PRACTICAL TIPS FOR THE ARBITRATOR, PRACTITIONER
AND CONTRACT DRAFTER

Scott D. Marrs and Sean P. Milligan

I. Introduction

Arbitration is a creature of contract, making it prone to change. The
touchstone for a successful arbitration is careful drafting of the arbitration
clause, according to authors Scott Marrs and Sean Milligan. They pose 10
critical questions that will help drafters of arbitration agreements, parties
counsel and arbitrators understand recent developments in arbitration.
Parties increasingly turn to arbitration for the resolution of business
disputes—with positive results, including less adversarial relationships,
faster decisions and lower dispute resolution costs. But because arbitration
is a creature of contract, the process the disputants get, and their
satisfaction with it, turn largely on the arbitration clause itself. Whether
their pursuit of an efficient and cost-effective arbitration is successful will
depend in part on how carefully the arbitration agreement is negotiated and
drafted, and on the arbitration experience and managerial abilities of the
arbitrator the parties select to decide their case. Using a “form” arbitration
clause borrowed from another contract may not be as safe as you thought.
The appropriate arbitration language will often depend on the
circumstances and how the courts have recently interpreted and applied
arbitration provisions, laws and rules. This article summarizes recent court
decisions on 10 important arbitration issues, including:

(1) Whether parties can expand the grounds to appeal an award;
(2) Whether parties can restrict the statutory grounds to appeal an
award;
(3) Whether arbitrators can award attorney fees when a court cannot;
(4) Whether parties can waive their right to attorney fees;
(5) When a party waives its right to arbitrate;
(6) The effect an unconscionable provision has on an arbitration
clause;
(7) Whether arbitrators can compel discovery from a non- signatory
to an arbitration agreement;
(8) Whether parties who are unaware of the arbitration agreement
can be required to arbitrate;
(9) Whether an arbitration agreement signed by only one party is
enforceable; and
(10) Whether heirs and beneficiaries of a decedent will be bound by
the decedent’s arbitration agreement?

The cases discussed here will help contract negotiators and drafters
devise a better arbitration agreement, help practitioners better advise their
clients, and update arbitrators on what courts are thinking and doing.