A Valuable Reference Work on Commercial Arbitration
Jason, Peter D., Dispute Resolution Journal
A Valuable Reference Work on Commercial Commercial Arbitration. Third edition by Thomas H. Oehmke Published by: West Group (www.westgroup.com)
Commercial Arbitration was originally published in 1987. Now in its third edition, it has grown into a fourvolume set. This edition has 15 parts with 159 chapters and 16 appendices.
Part One provides an overview of alternate dispute resolution, including fact finding and the appraisal process, as well as mediation and arbitration. It also explains the Federal Arbitration Act.
Part Two concerns the process of arbitration. It emphasizes that arbitration is the product of the parties' agreement, not a process imposed upon them. It also contains helpful examples and check lists for the parties to consider before they decide to include an arbitration clause in their agreement. Then, it discusses the need to establish the rules governing the arbitration after the parties have agreed to arbitrate. Considerations of procedural rules, such as those governing arbitrator qualifications, appointment, and selecting the locale, are thoroughly covered.
Thomas Oehmke explains that a contract to arbitrate is subject to the same defenses as any other contract. In one example, an employee filed a grievance alleging that he was terminated for refusing to drive a track. His grievance, which included the defense that he was discharged because of a disability, was arbitrated but his claim was denied. The employee filed a Title VII complaint in federal court seeking to vacate the award and litigate his claim. The employer argued that the employee's claim was barred by the doctrine of resjudicata. But the court found that since the collective bargaining agreement did not grant the arbitrator authority to decide disability discrimination claims, the arbitrator had no authority to decide the employee's grievance. Accordingly, the employee was given a second "bite of the apple" in federal court.
How the contract is drafted will determine some of the defenses to arbitration. In Oehmke's example, the arbitration clause was not drafted broadly enough to constitute a waiver of the employee's right to sue under Title VII.
Oehmke covers a plethora of contract problems, including challenges to the validity of the contract and to the arbitrator's authority under the agreement. Typically, arbitration rules give the arbitrator authority to decide the validity of the contract, but this issue could end up in court. Courts generally are called on to decide whether the arbitrator exceeded the authority granted under the arbitration clause. It is important to draft documents carefully to make sure that the arbitrator's authority is specifically delineated. Otherwise, costly and time consuming disputes may arise.
Once the arbitration award has been issued, the losing party may challenge the enforceability of the award on various grounds, among them unconscionability and fraud. These defenses to enforcement of the award are fully explained.
Part Three addresses arbitrability in general and in specific contexts, such as construction and securities disputes, addressing these topics in separate chapters. Arbitrability is based on the premise that arbitration is a creature of contract, so before a matter can be arbitrated, there must be an agreement to arbitrate and the subject matter has to be within its scope. …