Arbitrator Design and Arbitrator Selection to Manage Risk - Chapter 7 - AAA Handbook on Construction Arbitration and ADR - Third Edition

Author(s):

Stephen G. Walker

Page Count:

6 pages

Published:

March, 2016

Author Detail:

Stephen G. Walker - Senior Counsel, Bechtel Global Corporation

PDF557.68 KB

$40.00

Description:

There are myriad ways to craft a disputes resolution process that ends

with arbitration. The thoughtful drafter of the arbitration provisions will

address, at a minimum, each of these key issues: (1) the scope of the

disputes to be arbitrated; (2) the authority of the arbitrator; (3) the

applicable procedural and substantive law; and (4) the venue of the

arbitration. In construction contracts, the arbitration clause may have to

take into account other provisions in the contract, such as those addressing

limitations of liability and waivers of consequential and punitive damages.

I. Deciding the Scope of Arbitration

The scope of disputes subject to the arbitration clause is perhaps the

most fundamental of the issues, since it determines which disputes the

arbitrator has the authority to hear and decide. It is possible to draft a

broad clause that covers “all disputes” or a narrower clause that limits the

scope of the arbitration. Many contracts limit the arbitration clause to

disputes arising under the contract itself that involve interpretation issues

and the performance of the parties. The American Arbitration

Association’s (AAA) suggested arbitration clause is a good example:

Any controversy or claim arising out of or relating to this

contract, or the breach thereof, shall be settled by arbitration

administered by the American Arbitration Association under its

Construction Industry Arbitration Rules, and judgment on the

award rendered by the arbitrator(s) may be entered in any court

having jurisdiction thereof.