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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)
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.
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.
The (Surprising 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. But there are differences. Despite the increasing frequency with which parties contract to arbitrate their potential disputes, rather than litigate them, parties rarely give sufficient consideration to how that arbitration will work. Their image of arbitration as a non-litigation panacea that will save time and money in the event of future disputes is often shattered when they realize that they put too little thought into how to shape resolution of those future disputes. That lack of planning often causes arbitration to cost more than, and take longer than, the default litigation would have required. In arbitration, parties lose many of the procedural safeguards provided by the judicial process. See, e.g. Glazer’s Wholesale Distr. v. Heineken USA, Inc., 95 S.W.3d 286 (Tex. App.—Dallas 2001), judg’t vacated and remanded by agreement (Tex. July 3, 2003). 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. It will also discuss special considerations for the drafter of an arbitration clause when the parties’ transaction is international.
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).
The (Surprisingly Complex) Art of Drafting Arbitration Clauses
Before parties can decide whether arbitration is right for them, they have to understand the general principles behind arbitration.
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.