Arbitration

Question 1

What are the two major characteristics of arbitration?

Answer 1

1. Arbitrators are not bound by substantive law or rules of evidence
2. Scope of judicial review is extremely narrow

Question 2

What the threshold issues that must be resolved by the court before case can go to arbitration?

(Public policy: NY favors arbitration)

Answer 2

1. Agreement
2. Scope
3. Validity
4. Express condition precedent
5. Statute of limitations

Question 3

What are the requirements for agreement to arbitrate?

Answer 3

The agreement:

1. Must be in writing;
2. Must be clear, express and unequivocal; AND
3. need not be mutual

Question 4

What are the factors in determining the validity of an arbitration clause?

Answer 4

Arbitration clause will be considered valid UNLESS there was:

1. Fraud
2. Duress, OR
3. Coercion; OR
4. The matter was contrary to public policy.

Question 5

What is the doctrine of severability?

Answer 5

Validity of an arbitration clause is determined separately from the validity of the contract

Question 6

What is the process for bringing a threshold issue to a court?

Answer 6

If pending, D should make a motion to compel arbitration and stay the action

If not pending, proponent serves a notice of intentions to arbitrate

Question 7

What may an opponent do to respond to an intent to arbitrate?

Answer 7

1. Make a special proceeding to stay an arbitration; OR
2. Raise any of the five threshold issues.

(N.B. Time limit: must respond within 20 days within notice of intent to arbitrate)

Question 8

What are the three judicial grounds for vacating an arbitration award?

Answer 8

1. Corruption, fraud or misconduct;
2. Bias of an arbitrator who chosen to be neutral; AND
3. Arbitrator has exceeded his powers

(N.B. If it’s a local NY arbitration: arbitrator cannot award punitive damages)

Question 9

What are the differences between arbitration and ADR?

Answer 9

Resolutions are non-binding

No specific statutory rules for enforcing the outcome