DOCSLIB.ORG

Arbitration, Unconscionability, and Equilibrium: the Return of Unconscionability Analysis As a Counterweight to Arbitration Formalism

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Arbitration, Unconscionability, and Equilibrium: the Return of Unconscionability Analysis As a Counterweight to Arbitration Formalism OHIO STATE JOURNAL ON DISPUTE RESOLUTION VOLUME 19 2004 NUMBER 3 Arbitration, Unconscionability, and Equilibrium: The Return of Unconscionability Analysis as a Counterweight to Arbitration Formalism JEFFREY W. STEMPEL* I. INTRODUCTION The legal Zeitgeist of the past 20 years-with the United States Supreme Court providing most of the tail wind-has strongly favored enforcement of arbitration agreements,1 largely without regard to the quality of consent attending those agreements 2 and arguably in direct contravention of statutory * William S. Boyd Professor of Law, William S. Boyd School of Law, University of Nevada Las Vegas. Special thanks to Jennifer Brown, Ian Ayres, and participants at the Yale-Quinnipiac Dispute Resolution Workshop discussing this Article. Thanks also to Jean Braucher, Ann McGinley, Jean Sternlight, Elizabeth Thornburg, Dean Richard Morgan, and especially to Russell Korobkin, who provided many helpful comments although we continue to disagree about the market's production (or nonproduction) of beneficial arbitration terms and the proper extent of the judicial role in regulating arbitration clauses. Preparation of this Article was supported by a grant from the James E. Rogers Research Fund. 1 See CHRISTOPHER R. DRAHOZAL, COMMERCIAL ARBITRATION: CASES AND PROBLEMS, Chs. 2 & 3 (2002); Thomas E. Carbonneau, The Reception of Arbitration in United States Law, 40 ME. L. REv. 263, 263-66 (1988) (describing historical development and growth of arbitration); Jean R. Sternlight, Mandatory Binding Arbitration and the Demise of the Seventh Amendment Right to a Jury Trial, 16 OQuo ST. J. ON DIsP. RESOL. 669 (2001) (criticizing the Court's enthusiasm for compelling arbitration and arguing that the Court has overlooked serious Seventh Amendment and due process concerns); see also Jeffrey W. Stempel, Pitfalls of Public Policy: The Case of Arbitration Agreements, 22 ST. MARY'S L.J. 259, 334-54 (1990) [hereinafter Stempel, Public Policy] (criticizing perceived zeal of some courts in striking down arbitration agreements on grounds of public policy); Jeffrey W. Stempel, Bootstrapping and Slouching Toward Gomorrah: Arbitral Infatuation and the Decline of Consent, 62 BROOK. L. REv. 1381, 1412-28 (1996) [hereinafter Stempel, Consent] (arguing that the Court has uncritically embraced arbitration as an unalloyed social benefit). 2 See Richard E. Speidel, Contract Theory and Securities Arbitration: Whither Consent?, 62 BROOK. L. REv. 1335, 1339-45 (1996); Stempel, Consent, supra note 1, at OHIO STATE JOURNAL ON DISPUTE RESOLUTION [Vol. 19:3 2004] language that seemingly removes employment agreements from the reach of the Federal Arbitration Act (FAA).3 This sometimes uncritical embrace of arbitration by Justices quite removed from the actual operation of arbitration has attracted considerable academic criticism as well as protests from those who see themselves as forced into mandatory arbitration. 4 In addition, many 1389-1412; Stephen J. Ware, Arbitration and Unconscionability After Doctor's Associates, Inc. v. Casarotto, 31 WAKE FOREST L. REV. 1001, 1032-34 (1996). 3 See Federal Arbitration Act of 1925, 9 U.S.C. § 1 (2000); Samuel Estreicher, Predispute Agreements to Arbitrate Statutory Employment Claims, 72 N.Y.U. L. REV. 1344, 1363-72 (1997) (criticizing the Court for supporting the enforcement of mandatory arbitration agreements required of workers in view of the language of 9 U.S.C. § 1, which states that the Act's power of specific enforcement of predispute arbitration agreement does not extend to a "contract of employment"); Matthew W. Finkin, "Workers' Contracts" Under the United States ArbitrationAct: An Essay in HistoricalClarification, 17 BERKELEY J. OF EMP. & LAB. L. 282 (1996) (same); Jeffrey W. Stempel, Reconsidering the Employment Contract Exclusion in Section 1 of the Federal Arbitration Act: Correcting the Judiciary's Failure of Statutory Vision, 1991 J. DISP. REOL. 259, 263-79 (same); Jeremy Kennedy, Comment, The Supreme Court Swallows a Legal Fly: Consequences for Employees as the Scope of the Federal Arbitration Act Expands, 33 TEX. TECH L. REV. 1137, 1153-64 (2002) (same); see also Richard C. Reuben, ConstitutionalGravity: A Unitary Theory of Alternative Dispute Resolution and Public Civil Justice, 47 UCLA L. REV. 949, 1019-46 (2000); Richard C. Reuben, Public Justice: Toward a State Action Theory of Alternative Dispute Resolution, 85 CAL. L. REV. 577, 607-12 (1997) (contending that courts should not enforce arbitration provisions in a manner inconsistent with statutory rights). 4 See Sen. Russell D. Feingold, Mandatory Arbitration: What Process is Due?, 39 HARV. J. ON LEGIS. 281, 283-84 (2002) (criticizing Court's preference for arbitration); Larry J. Pittman, The FederalArbitration Act: The Supreme Court's ErroneousStatutory Interpretation,Stare Decisis, and a Proposalfor Change, 53 ALA. L. REV. 789, 811-20 (2002) (same); Linda Alle-Murphy, Comment, Are Compulsory Arbitration Clauses in Consumer Contracts Enforceable? A ContractualAnalysis, 75 TEMP. L. REV. 125, 129- 37 (2002) (same); Cameron L. Sabin, Note, The Adjudicatory Boat Without a Keel: Private Arbitration and the Need for Public Oversight of Arbitrators, 87 IOWA L. REV. 1337, 1341-46 (2002) (same); see also Kenneth S. Abraham & J.W. Montgomery, I, The Lawlessness of Arbitration, 9 CONN. INs. L.J. 355, 357 (2003) (observing the disadvantages of arbitration as a method of dispute resolution: "the legal system should reconsider the highly favorable stance that it takes toward mandatory, binding arbitration in general, so as to take account of the negative effects of arbitration lawlessness. A neutral legal and judicial stance toward binding arbitration would be more appropriate."); Michelle Andrews, For Patients, Unpleasant Surprises in Arbitration, N.Y. TIMES, Mar. 16, 2003, § 3, at B8 (describing the increasing use of arbitration agreements in medical services agreements, suggesting that the manner of contracting leaves prospective patients little choice so that the significance of the arbitration provision frequently is not appreciated by the patient); Scott Atlas, Have You Ever Tried to Make Up Your Mind- About Arbitration?, 29 L1TIG., Fall 2002, at 1, 1 (describing the change in the opinion of the Chair of the ABA Litigation Section, initially an enthusiast for arbitration as means of ARBITRATION UNCONSCIONABILITY have come to question the fulcrum on which much of modem arbitration leverage rests-the Supreme Court's view that the FAA creates substantive federal law that ousts any contrary state law that targets arbitration.5 Only general state contract law applies to construction and enforcement of arbitration agreements. As long as the requisite nexus exists with interstate commerce, state legislation aimed specifically at perceived problems of 6 arbitration is preempted by the FAA. alternative dispute resolution, who now expresses mixed feelings about the efficacy of arbitration); Mary P. Gallagher, AAA's Impartiality Challenged by Lawyer Seeking Alternate Forum, N.J. L.J., Oct. 22, 2002, at 1; Joanne Gordon, Here Come Da Judge: Usually It's Plaintiffs' Attorneys Whining About Mandatory Arbitration. Now It's the Corporate Lawyers, FORBES, Dec. 9, 2002, at 60 (noting increasing business dissatisfaction with arbitration, finding it slower, less decisive, and less substantively favorable than anticipated); Jackson Williams, Mandatory Arbitration: Ganging up on Little Guys, NAT'L L.J., Jul. 22, 2002, at A24. The Supreme Court's strong support of arbitration has been met with both praise and scorn. Compare Bruce M. Selya, Arbitration Unbound?: The Legacy of McMahon, 62 BROOK. L. REV. 1433, 1454-57 (1996) (approving of arbitration generally and expressing concern over the tendency to require arbitration to mimic the judicial process once arbitration has become widespread) and Marc I. Steinberg, Securities Arbitration:Better for Investors than the Courts?, 62 BROOK. L. REV. 1503, 1505-06 (1996) (approving of arbitration in general and finding its outcomes more pro-consumer than many court decisions) with Paul D. Carrington, Self-Deregulation, the "National Policy" of the Supreme Court, 3 NEV. L.J. 259, 284-86 (2002/2003) (comparing the Court's rush toward arbitration as jurisprudential equivalent of tulip bulb craze of 17th century Holland) and Jean R. Sternlight, Rethinking the Constitutionality of the Supreme Court's Preference for Binding Arbitration: A Fresh Assessment of Jury Trial, Separation of Powers, and Due Process Concerns, 72 TUL. L. REV. 1, 7-14 (1997). 5 See Carrington, supra note 4 at 264-65 (arguing that FAA was intended as a procedural rule for federal courts rather than as statute creating substantive law). But see Christopher R. Drahozal, In Defense of Southland: Reexamining the Legislative History of the Federal ArbitrationAct, 78 NOTRE DAME L. REV. 101, 105-08 (2002) (defending the correctness of Court decisions characterizing the FAA as creating substantive law overriding contrary state law). 6 The Federal Arbitration Act provides that a written agreement to arbitration "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2 (2000). This section has been interpreted to forbid application of any state contract law that singles out arbitration clauses for any special treatment. However, the validity of an arbitration term may be examined according to a state's general contract law regarding formation, enforcement, breach, and rescission.
Load more

Recommended publications
  • Practical Law, Joining Nonsignatories to an Arbitration in the US
    PRACTICE NOTE Joining Nonsignatories to an Arbitration in the US by Practical Law Litigation and Practical Law Arbitration, based on an article authored by Allan Van Fleet, G. Allan Van Fleet, P.C., and Mark A. Correro, Correro & Leisure, P.C. Status: Maintained | Jurisdiction: United States This document is published by Practical Law and can be found at: us.practicallaw.tr.com/w-011-3186 Request a free trial and demonstration at: us.practicallaw.tr.com/about/freetrial This Practice Note examines the circumstances under which a party not signing an arbitration agreement may participate in an arbitration. The Note explains when a nonparty to an arbitration agreement can join a signatory, when a party can join a nonsignatory, whether the issue is decided by courts or arbitrators, and when parties to the arbitration can enforce arbitral awards against third parties not signing or participating in the arbitration. Scope of This Note Judicial Assistance in Joining This Note explains the circumstances under which a Nonsignatories to an Arbitration nonsignatory to an arbitration agreement may participate in an arbitration proceeding. Nonsignatories may be joined, Choice of Law for example, where there are multiple interdependent A US court’s approach to joining a nonsignatory contracts or where not all participants of a commercial to an arbitration depends on the relevant state transaction are parties to the agreement containing law principles on the validity, revocability, and the arbitration clause. This issue often arises where a enforceability of contracts (Perry v. Thomas, 482 U.S. contracting party is a member of a group of companies 483, 493, n.9 (1987)).
    [Show full text]
  • Is Your Arbitration Clause Enforceable?
    Is Your Arbitration Clause Enforceable? Is your agreement to arbitrate disputes ironclad? You may be wrong. A recent Hawaii Court of Appeals decision proposes a modification to the theory to which many have subscribed: ambiguous text renders the arbitration agreement as hollow. In this case, determining whether the arbitration agreement was enforceable Sarah E. Carson Partner hinged on indirect evidence of the parties’ intent to be bound by the Raleigh, North Carolina agreement to arbitrate, not merely the provisions in the contract. Washington, D.C. Atlanta, Georgia T: 919.455.0171 The Arbitration Agreement and Supplemental Conditions E: [email protected] In Safeway, Inc. v. Nordic PCL Constr., Inc., 312 P.3d 1224 (Haw. Ct. App. 2013) the owner, a supermarket chain, sued the general contractor for damages associated with a water leak in the store. In moving to compel arbitration, the general contractor relied on language in the AIA A101 Standard Form of Agreement Between Owner and Contractor (the “Contract”), which required disputes to be arbitrated. The owner responded with a two tiered attack. First, the owner argued that a specific clause in the Supplemental Conditions voided the agreement to arbitrate. Second, the owner reasoned that the present dispute over the text of the contract as a whole demonstrates the arbitration agreement’s ambiguity and thus, it must be voided. Determining the contract was “confusing as heck to me,” the trial court judge adopted the owner’s argument as to the ambiguity of the text: “because there’s more than one reasonable interpretation of the arbitration agreement, the agreement itself is ambiguous.” The contractor appealed that ruling.
    [Show full text]
  • UCC “Battle of the Forms” and Arbitrability
    What Arbitrators Need to Know: UCC “Battle of the Forms” and Arbitrability CHARTERED INSTITUTE OF ARBITRATORS | JULY 9, 2020 Speakers • Drafts arbitration agreements and advises on consumer arbitration programs. • Litigated over a dozen motions to compel arbitration. • Litigated hotly contested threshold issues of arbitrability. • E.g., does a judge or an arbitrator decide if an arbitration agreement permits class arbitration? • Decided arbitrability as a neutral many times. • Charles E. Harris, II Rejected the claimant’s procedural unconscionability arguments and found that some of the Partner, Mayer Brown claims in the demand fell within the arbitration agreement and some did not. • Drafts and reviews arbitration agreements. • Represents multinational companies before domestic and international arbitral tribunals, including JAMS, AAA, ICC, ICDR and SIAC. • Obtains and defends against judicial review of arbitration awards. • Fellow of the Chartered Institute of Arbitrators. • Center for Conflict Resolution Trained Mediator. Sarah E. Reynolds Partner, Mayer Brown 2 Agenda • Delegation of Arbitrability • UCC Article 2 Battle of the Forms Provision • COVID-19-Related Supply Chain Scenario • Hypotheticals • Questions and Comments 3 Delegation of Questions of Arbitrability to the Arbitrator • Arbitrability generally raises two questions: 1. whether there is a valid arbitration agreement, and 2. whether the particular dispute falls within the scope of that agreement. • As a general rule, courts, not arbitrators, decide arbitrability. Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). • The parties may delegate arbitrability to the arbitrator as long as they do so by clear and unmistakable evidence. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 942-46 (1995); Rent-A-Center, W., Inc.
    [Show full text]
  • Unconscionability Wars †
    Copyright 2012 by Northwestern University School of Law Printed in U.S.A. Northwestern University Law Review Vol. 106, No. 1 UNCONSCIONABILITY WARS † David Horton ABSTRACT —For decades, courts have invoked the contract defense of unconscionability to invalidate one-sided arbitration clauses. Recently, however, a growing cadre of judges, scholars, and litigants has asserted that this practice is incompatible with the Federal Arbitration Act (FAA). Some claim that the FAA only permits arbitrators—not courts—to find arbitration clauses to be unconscionable. Others, such as Justice Thomas—who provided the decisive vote in the Court’s recent decision in AT&T Mobility LLC v. Concepcion —contend that the statute’s plain language immunizes arbitration clauses from unconscionability in all circumstances. This Essay responds to these arguments. In particular, it challenges the cornerstone of both anti-unconscionability theories: that the FAA’s text only allows courts to strike down arbitration clauses for reasons that relate to the “making” of the agreement to arbitrate. AUTHOR —Acting Professor of Law, University of California, Davis, School of Law (effective July 2012); Associate Professor of Law, Loyola Law School, Los Angeles (through July 2012). Thank you to Hiro Aragaki and Stephen J. Ware for helpful comments. † This Essay was originally published in the orthwestern University Law Review Colloquy on August 22, 2011, 106 NW. U. L. REV . COLLOQUY 13 (2011), http://www.law.northwestern.edu/ lawreview/colloquy/2011/17/LRColl2011n17Horton.pdf. 387 N O R T H W E S T E R N U N I V E R S I T Y L A W R E V I E W INTRODUCTION ............................................................................................................
    [Show full text]
  • United States District Court Northern District of Ohio Eastern Division
    Case: 1:19-cv-02024-CAB Doc #: 14 Filed: 05/26/20 1 of 13. PageID #: <pageID> UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OHIO EASTERN DIVISION ADRIAN VLAD, ET AL., ) CASE NO. 1:19CV2024 ) Plaintiff, ) JUDGE CHRISTOPHER A. BOYKO ) vs. ) ) DGI TRUCKING, INC., ) OPINION AND ORDER ) Defendant. ) CHRISTOPHER A. BOYKO, J: This matter is before the Court on Defendant DGI Trucking, Inc.’s Motion to Stay Proceedings Pending Arbitration. (ECF # 5). For the following reasons, the Court grants, in part, Defendant’s Motion to Stay. The Court will stay the litigation in order to allow the Magistrate Judge assigned to the case to hold an evidentiary hearing on whether the parties clearly and unmistakably agreed to delegate questions or arbitrability to the arbitrator. The Magistrate upon completion of the evidentiary hearing shall provide the Court a Report and Recommendation on the issue for the Court’s approval. According to Plaintiffs’ Complaint, Plaintiffs Adrian Vlad (“Vlad”) Lucian Solomon (“Solomon”), Daniel Varvaruc (“Varvaruc”) and Daniel Tarog (“Tarog”) are owner-operator, independent truck drivers who entered into lease agreements with Defendant DGI Trucking, Case: 1:19-cv-02024-CAB Doc #: 14 Filed: 05/26/20 2 of 13. PageID #: <pageID> Inc. (“DGI”), an authorized carrier. Under federal regulations, authorized carriers like DGI may transport interstate using equipment it does not own so long as the equipment is covered by a written lease that conforms to the requirements of 49 CFR § 376. Each Plaintiff entered into multiple lease agreements with DGI. According to Plaintiffs, DGI failed to include several provisions in the lease agreements required under law.
    [Show full text]
  • Standard Arbitration Clauses for the AAA and ICDR
    DRAFTING NOTES AFRICA STUDIO/Shutterstock.com Standard Arbitration Clauses for the AAA and ICDR This excerpt of Standard Clauses from our website can be used when drafting an arbitration agreement applying the rules of the American Arbitration Association (AAA) or the International Centre for Dispute Resolution (ICDR). These clauses are modeled on the standard recommended arbitration clauses of the AAA and ICDR, and have integrated notes with important explanations and drafting tips. For the complete, continuously maintained version of this resource, which includes the standard recommended clauses of the International Chamber of Commerce (ICC) and the United Nations Commission on International Trade Law (UNCITRAL), visit Practical Law online. LEA HABER KUCK JULIE BÉDARD COLM P. McINERNEY PARTNER PARTNER ASSOCIATE SKADDEN, ARPS, SLATE, SKADDEN, ARPS, SLATE, SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP MEAGHER & FLOM LLP MEAGHER & FLOM LLP Lea concentrates her Julie concentrates her Colm focuses his practice on the resolution practice on international practice on international of complex disputes arising litigation and arbitration. litigation and arbitration. out of international business transactions. She She regularly advises clients on the drafting of He represents US and international clients represents clients in federal and state courts in dispute resolution clauses and has served as in matters involving complex corporate and the US, as well as in international arbitrations counsel in international arbitration proceedings commercial litigation, in both federal and state conducted under UNCITRAL, the ICC, ICDR, held under the auspices of the ICC, AAA, ICDR courts and in international arbitrations. London Court of International Arbitration and and International Centre for Settlement of other arbitration rules.
    [Show full text]
  • The Arbitration Clause As Super Contract
    Washington University Law Review Volume 91 Issue 3 2014 The Arbitration Clause as Super Contract Richard Frankel Drexel University School of Law Follow this and additional works at: https://openscholarship.wustl.edu/law_lawreview Part of the Dispute Resolution and Arbitration Commons Recommended Citation Richard Frankel, The Arbitration Clause as Super Contract, 91 WASH. U. L. REV. 531 (2014). Available at: https://openscholarship.wustl.edu/law_lawreview/vol91/iss3/4 This Article is brought to you for free and open access by the Law School at Washington University Open Scholarship. It has been accepted for inclusion in Washington University Law Review by an authorized administrator of Washington University Open Scholarship. For more information, please contact [email protected]. THE ARBITRATION CLAUSE AS SUPER CONTRACT RICHARD FRANKEL ABSTRACT It is widely acknowledged that the purpose of the Federal Arbitration Act (FAA) was to place arbitration clauses on equal footing with other contracts. Nonetheless, federal and state courts have turned arbitration clauses into “super contracts” by creating special interpretive rules for arbitration clauses that do not apply to other contracts. In doing so, they have relied extensively, and incorrectly, on the Supreme Court’s determination that the FAA embodies a federal policy favoring arbitration. While many scholars have focused attention on the public policy rationales for and against arbitration, few have explored how arbitration clauses should be interpreted. This Article fills that gap and asserts that the judiciary’s inappropriate reliance on the federal policy favoring arbitration distorts state contract law to push cases into arbitration that do not belong there, thereby unfairly depriving litigants of access to the courts.
    [Show full text]
  • Contract Basics for Litigators: Illinois by Diane Cafferata and Allison Huebert, Quinn Emanuel Urquhart & Sullivan, LLP, with Practical Law Commercial Litigation
    STATE Q&A Contract Basics for Litigators: Illinois by Diane Cafferata and Allison Huebert, Quinn Emanuel Urquhart & Sullivan, LLP, with Practical Law Commercial Litigation Status: Law stated as of 01 Jun 2020 | Jurisdiction: Illinois, United States This document is published by Practical Law and can be found at: us.practicallaw.tr.com/w-022-7463 Request a free trial and demonstration at: us.practicallaw.tr.com/about/freetrial A Q&A guide to state law on contract principles and breach of contract issues under Illinois common law. This guide addresses contract formation, types of contracts, general contract construction rules, how to alter and terminate contracts, and how courts interpret and enforce dispute resolution clauses. This guide also addresses the basics of a breach of contract action, including the elements of the claim, the statute of limitations, common defenses, and the types of remedies available to the non-breaching party. Contract Formation to enter into a bargain, made in a manner that justifies another party’s understanding that its assent to that 1. What are the elements of a valid contract bargain is invited and will conclude it” (First 38, LLC v. NM Project Co., 2015 IL App (1st) 142680-U, ¶ 51 (unpublished in your jurisdiction? order under Ill. S. Ct. R. 23) (citing Black’s Law Dictionary 1113 (8th ed.2004) and Restatement (Second) of In Illinois, the elements necessary for a valid contract are: Contracts § 24 (1981))). • An offer. • An acceptance. Acceptance • Consideration. Under Illinois law, an acceptance occurs if the party assented to the essential terms contained in the • Ascertainable Material terms.
    [Show full text]
  • Enforceability of Arbitration Agreements That Restrict Statutorily-Mandated Rights: the Sharpening Split Among the Circuits By: Howard S
    Enforceability of Arbitration Agreements that Restrict Statutorily-Mandated Rights: the Sharpening Split Among the Circuits By: Howard S. Suskin1 and Marek H. Badyna2 Increasingly, many arbitration Eighth Circuits have held that an Subsequently, in PacifiCare agreements include clauses that arbitration clause that is alleged Health Systems, Inc. v. Book,6 attempt to limit substantive rights to impermissibly preclude or limit the Court held that when there is and remedies that are otherwise statutorily authorized remedies is ambiguity about the scope of a afforded to parties by various still a valid agreement to arbitrate, remedies limitation in an arbitration federal and state statutes. For and that the arbitrator should decide agreement, an arbitrator must example, many employment, the availability of remedies along decide the issues of enforceability cable television subscriptions, with the other issues in the case. in the first instance. PacifiCare or residential mortgage loan This article examines the different addressed the question of whether contracts contain arbitration approaches courts have taken with parties could be compelled to clauses purporting to exclude or regard to the enforceability of such arbitrate claims arising under limit punitive or actual damages clauses. the Racketeer Influenced and Corrupt Organizations Act (RICO), otherwise available under Introduction applicable remedial statutes.3 notwithstanding the fact that The current split among the These clauses have been subject to the arbitration agreement’s bar circuits has its genesis in a trilogy varying degrees of judicial scrutiny, of punitive damages could be of U.S. Supreme Court opinions depending on the jurisdiction construed to limit the arbitrator’s that have touched upon, but not authority to award treble damages where the dispute is brought.
    [Show full text]
  • The Arbitration Agreement Iii
    ii Dispute Settlement N O T E The Course on Dispute Settlement in International Trade, Investment and Intellectual Property consists of forty modules. This module has been prepared by Mr. R. Caivano at the request of the United Nations Conference on Trade and Development (UNCTAD). The views and opinions expressed are those of the author and not necessarily those of the United Nations, WTO, WIPO, ICSID, UNCITRAL or the Advisory Centre on WTO Law. The designations employed and the presentation of the material do not imply an expression of any opinion whatsoever on the part of the United Nations concerning the legal status of any country, territory, city or areas or of its authorities, or concerning the delimitations of its frontiers or boundaries. In quotations from the official documents and the jurisprudence of international organizations and tribunals countries are designated as reported. The United Nations holds copyright to this document. The course is also available in electronic format on the UNCTAD website (www.unctad.org). Copies may be downloaded free of charge on the understanding that they will be used for teaching or study and not for a commercial purpose. Appropriate acknowledgement of the source is requested. UNCTAD/EDM/Misc.232/Add.39 Copyright © United Nations, 2005 All rights reserved 5.2 The Arbitration Agreement iii TABLE OF CONTENTS Note ii What You Will Learn 1 1. Concept and Enforcement of Arbitration Agreement 3 Objectives 3 1.1 Definition. Arbitration agreement, arbitration clause and Submission Agreement 3 1.2 Enforcement of an arbitration agreement 3 1.2.1 Negative enforcement: Lack of jurisdiction of courts 4 1.2.2 Positive enforcement: the “submission agreement” 4 1.3 Enforcement of an arbitration agreement under the UNCITRAL Model Law and the New York Convention 5 1.3.1 Competence of the arbitral tribunal to rule on its own Jurisdiction 7 1.4 Summary 9 1.5 Test your understanding 9 2.
    [Show full text]
  • Arbitrability of Mental Capacity Defenses Under the Federal Arbitration Act and C
    PLC - Arbitrability of Mental Capacity Defenses under the Federal Arbitration Act and C... Page 1 of 5 Arbitrability of Mental Capacity Defenses under the Federal Arbitration Act and California Law Resource type: Article Status: Law stated as at 23-Sep-2014 Jurisdictions: California, USA This Article examines whether the Prima Paint rule applies to a mental capacity defense. Prima Paint holds that unless the challenge is to the arbitration clause itself, the arbitrator determines the issue of the contract's validity. While the law is not universally settled, federal and state court decisions have either held or suggested that if a person lacked the mental capacity to enter into an agreement, he should not be assumed to have agreed to arbitrate the issue of his mental capacity, and the mental capacity defense should be considered by the court in the first instance. Fletcher W. Paddison and Erik M. Ideta, Troutman Sanders LLP, with Practical Law Litigation Sources of US Arbitration Law The Federal Arbitration Act (FAA) applies to all arbitrations arising from maritime transactions or to any other contract "involving commerce," which is defined broadly (see Practice Note, Understanding the Federal Arbitration Act). Courts have generally stated that the FAA pre-empts state law that conflicts either with its express provisions or its intent of promoting arbitration. Parties may, however, contemplate enforcement of their arbitration agreement under state procedural statutory or common law (also referred to as arbitration law) (see Hall St. Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576, 590 (2008)). In a California state court, a general choice of law provision will incorporate not only California's substantive law but also its arbitration law (see Cronus Investments, Inc.
    [Show full text]
  • Unconscionability Found: a Look at Pre-Dispute Mandatory Arbitration Agreements 10 Years After Doctor's Associates, Inc
    Cleveland State Law Review Volume 54 Issue 3 Article 3 2006 Unconscionability Found: A Look at Pre-Dispute Mandatory Arbitration Agreements 10 Years after Doctor's Associates, Inc. v. Casarotto Sandra F. Gavin Visiting Associate Professor, Rutgers School of Law, Camden, New Jersey. Follow this and additional works at: https://engagedscholarship.csuohio.edu/clevstlrev Part of the Law Commons How does access to this work benefit ou?y Let us know! Recommended Citation Sandra F. Gavin, Unconscionability Found: A Look at Pre-Dispute Mandatory Arbitration Agreements 10 Years after Doctor's Associates, Inc. v. Casarotto, 54 Clev. St. L. Rev. 249 (2006) available at https://engagedscholarship.csuohio.edu/clevstlrev/vol54/iss3/3 This Article is brought to you for free and open access by the Journals at EngagedScholarship@CSU. It has been accepted for inclusion in Cleveland State Law Review by an authorized editor of EngagedScholarship@CSU. For more information, please contact [email protected]. ARTICLES UNCONSCIONABILITY FOUND: A LOOK AT PRE-DISPUTE MANDATORY ARBITRATION AGREEMENTS 10 YEARS AFTER DOCTOR’S ASSOCIATES, INC. V. CASAROTTO SANDRA F. GAVIN1 I. INTRODUCTION .................................................................... 249 II. ARBITRATION HOSTILITY..................................................... 251 III. THE FAA: BEYOND NEUTRALITY – EVOLUTION OF THE “SUPER ENFORCEABLE CONTRACT” ........................ 252 IV. DOCTOR’S ASSOCIATES, INC. V. CASAROTTO...................... 256 V. UNCONSCIONABILITY FOUND UNDER STATE LAW .............
    [Show full text]