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Whether an Agreement to Arbitrate Disputes is Illusory and Thus Unenforceable When One Party Has the Power to Terminate Its Obligation At Any Time, Effective Immediately Without Advance Notice of Termination

Nelson v. Watch House Int’l, L.L.C., 815 F.3d 190 (5th Cir. 2016)

Compelling Arbitration—Whether a Court Should Mandate Arbitration Pursuant to an Agreement When the Movant Challenges the Formation of That Agreement

S.C. Maxwell Family P’ship v. Kent, 472 S.W.3d 341 (Tex. App.—Houston [1st Dist.] 2015, no pet.)

Arbitration Clauses: Are Arbitration Clauses in Engagement Letters Binding When the Client Doesn’t Sign and the Party Suing is Doing So Derivatively?

Cedillo v. Immobiliere Jeuness Establissement, 476 S.W.3d 557 (Tex. App.—Houston [14th Dist.] 2015, pet. denied)

A Court’s Authority to Determine Arbitrability by Looking at the Relevance of an Underlying Contract to a Claim

Douglas v. Regions Bank, 757 F.3d 460 (5th Cir. 2014)

Why Can't We Be Friends? Protecting Investors While Also Protecting Legitimate Public Interests

International investment law was born in a day and age when investors located in powerful and wealthy developed countries were looking for protection against expropriation and other arbitrary interference with their investments by undemocratic and unaccountable governments in developing countries. Bilateral and multilateral investment protection treaties were drafted by the developed countries to give rights and remedies to their investors.

The Pathological Arbitration Clause

Arbitration is here to stay. Driven by what parties perceive as deficiencies of the formal judicial system, including expense, protracted length, gamesmanship, belligerency and wastefulness, arbitration has grown exponentially in the last ten years. Because of its confidentiality, empirical statistics are difficult to come by. Nonetheless, the American Arbitration Association, the largest administrator in the world, notes a 46% increase in total case filings 2007 to 2012. Courts, both federal and state, continue wholeheartedly to sanction this trend. It is bedrock principal that arbitration is a consensual process. Its authority is derived from the arbitration clause itself. No matter how favored it may be, arbitration is, at its heart, the product of an agreement. Because the arbitration clause is the “DNA” of the whole process, it is critical that the clause be drafted properly.

Pros and Cons of Arbitration

The continuing decline in the number of jury trials, coupled with the public policy in favor of arbitration, may suggest that arbitration is the fastest and most cost efficient forum for dispute resolution. For the right case with the right parties, arbitration can be an efficient forum to resolve a dispute. But while that might be true in some cases, it is not true for all cases. Jury trials still offer many advantages over arbitration, and the 7th Amendment still needs to be preserved. When deciding on a dispute resolution forum, the practitioner should advise the client of the pros and cons of each process, so that the client can make an informed decision—and not just a knee jerk reaction.

The (Surprisingly Complex) Art of Drafting Arbitration Clauses

Parties often view arbitration as a concept distinct from litigation. For commercial disputes, however, arbitration and litigation have several similarities. Each is a form of dispute resolution; each employs a neutral person to resolve differences, whether factual or legal; each depends upon rules that are (generally) developed before the dispute arises. And when all is said and done, at least one party is going to be unhappy with the result because, like litigation, arbitration is a zero-sum game: at the end of the day someone loses.

Litigation v. Arbitration: The Case for Litigation (or Against Arbitration)

Arbitration provisions have become the rule rather than the exception in virtually all commercial agreements. Lauded for its flexibility, informality, and confidentiality, arbitration rose in popularity in the late 1980s and early 1990s. Arbitration became increasingly popular for defendants facing high-volume litigation, and looking to avoid the perceived risks in a traditional court setting.

How to Write a Bad Arbitration Clause

Arbitration is here to stay. Driven by what parties perceive as deficiencies of the formal judicial system, including expense, protracted length, gamesmanship, belligerency and wastefulness, arbitration has grown exponentially in the last ten years. Because of its confidentiality, empirical statistics are difficult to come by. Nonetheless, the American Arbitration Association, the largest administrator in the world, notes a 46% increase in total case filings 2007 to 2012 — i.e., from 127,729 to 187,596 cases per year (including commercial, employment, labor, construction and no-fault issues). Courts, both federal and state, continue wholeheartedly to sanction this trend. Hence, arbitration is highly favored under the law. Moses H. Cone Memorial Hospital v. Mercury Constr. Corp.,460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); Safer v. Nelson Financial Group, 422 F.3d. 389, 293 (5th Cir. 2005); Ponderosa Pine Energy, LLC v. Tenaska Energy, Inc., 376 S.W.3d 358, 369 (Tex. App. — Dallas, 2012, no pet. history) (citing Prudential Securities , Inc. v. Marshall, 909 S.W.2d 896, 898 (Tex. 1995).

An Overview of the Arbitration of Employee Disputes In Texas

Arbitration is here to stay. Driven by what parties perceive as deficiencies of the formal judicial system, including expense, protracted length, gamesmanship, belligerency and wastefulness, arbitration has grown exponentially in the last ten years. Because of its confidentiality, empirical statistics are difficult to come by. Nonetheless, the American Arbitration Association, probably the largest administrator in the world, notes a 46% increase in total case filings 2007 to 2012 — i.e., from 127,729 to 187,596 cases per year (including commercial, employment, labor, construction and nofault issues). The Financial Industry Regulatory Authority (“FINRA”), where arbitration is mandated in agreements with securities brokers, notes an average caseload of 6,822 case per year. See www.finra.org/ArbitrationandMediation/FINRADisput eResolution/AdditionalResources/Statistics/index.html. Courts and legislatures, both federal and state, continue to sanction this trend. Given the $200 to $300 billion annual cost of civil litigation, arbitration’s dramatic increase must be viewed as a seismic shift in the notions of justice in this America. Formal studies also confirm general public acceptance of the process. See, e.g., Business-to-Business Arbitration in the United States: Perceptions of Corporate Counsel, Rand Institute for Civil Justice (2011), www.rand.org/content/dam/rand/pubs/technical_report s/2011/RAND_TR781.pdf; Dispute-Wise Management: Improving Economic and Non-Economic Outcomes in Managing Business Conflicts American Arbitration Association (2003)

Developing Alternative Dispute Resolution Programs

This paper will provide an overview of the law of arbitration and identify some considerations for attorneys who counsel clients about whether arbitration might be an appropriate dispute resolution vehicle for their relationship and how to shape their arbitration framework.