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Waiver of the Contractual Right to Arbitrate - Chapter 49 - AAA Handbook on Commercial Arbitration - 2nd Edition

Author(s): 
Terry L. Trantina
Page Count: 
10 pages
Media Description: 
PDF from "AAA Handbook on Commercial Arbitration - 2nd Edition"
Published: 
September, 2010
Jurisdictions: 
United States
Practice Areas: 
Contractual or Consensual Basis of Arbitration,
Waivers
Author Detail: 

Terry L. Trantina is a partner in Blank Rome Tenzer Greenblatt, in the New York office and is an adjunct professor of ADR at Seton Hall University Law School. He also serves as vice chair of the ABA Dispute Resolution Section Arbitration Committee and is also vice chair of the Dispute Resolution Committee of the ABA Business Law Section. He holds a B.A. from Notre Dame and a J.D. from the University of Santa Clara School of Law. Trantina is the author of Consumer Arbitration in the U.S., LONDON COURT OF INTERNATIONAL ARBITRATION (London, March 1999).

 

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Description: 
I. Introduction
When faced with a failure to arbitrate a dispute covered by a written agreement requiring binding arbitration, you have choices. A contractual obligation to arbitrate a dispute will, under either applicable federal or state arbitration law, be rigorously enforced at the request of any party1 and even by third-party beneficiaries of that contract2 with a very limited inquiry.3 However, the right to arbitrate is not absolute and both state and federal courts have held that the contractual right to arbitrate disputes can be waived like any other contractual right.
Unlike many other obligations in a contract, a provision requiring arbitration of a dispute is by statute specifically enforceable and an agreement to arbitrate disputes carries a presumption of validity not extended to any other contractual provision.5 This statutory right to enforce agreements to arbitrate and the presumptive validity of such provisions creates a corollary burden for the party seeking to enforce a waiver of that obligation.6 As a result, the courts have uniformly held that there is a very strong presumption against the waiver of the right to arbitrate a dispute.
Although state and federal courts have no litmus test for determining when there has been a waiver, they have held that a contractual right to arbitrate may be waived either by (1) a significant delay or failure to invoke that right, or (2) taking steps in another forum in connection with the dispute that are inconsistent with the intent and right to arbitrate that dispute.
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