I. INTRODUCTION

Two contracting parties, X and Y, negotiate a joint venture. The parties agree that they will resolve all disputes privately in an alternative dispute resolution forum. Party X suggests that they should attempt mediation at the outset.1 He explains that mediation can effectively resolve disputes, preserve business relationships, develop value-added creative solutions and maintain privacy.2 Party Y agrees. They decide to adopt the typical multi-step alternative dispute resolution clause comprised of a structured two-tiered provision that first requires the parties to commence mediation, and if that fails, commits the parties to use binding arbitration rather than litigation, to resolve their disputes. After five months of working together, the parties’ relationship crumbles. Party Y accuses party X of failing to uphold his part of the contract. Party X blames party Y for their loss in profits. The dispute escalates to the point that the parties loathe each other’s presence. Party Y initiates litigation and takes his contract dispute to court. Party X moves to compel arbitration and insists that they abide by their alternative dispute resolution clause. Neither party requests mediation; they do not believe they can effectively engage in problem solving to settle their disagreements.

To party X’s dismay, the court, abiding by precedent established in the First and Eleventh Circuits in HIM Portland v. DeVito Builders and Kemiron Atlantic v. Aguakem International, holds that the arbitration clause was never triggered due to the parties’ failure to request mediation.3 Thus, even though both parties were reluctant to initiate mediation, the court would not allow them to waive the voluntary mediation condition. In effect, their multi-step alternative dispute resolution clause was invalidated. As a result, the parties wind up in litigation.4