UNIFORM ARBITRATION ACT

1 UNIFORMARBITRATIONACT(LastRevisionsCompl etedYear2000) ,FLORIDAJULY28 AUGUST4,2000 WITHPREFATORYNOTEANDCOMMENTSC opyright 2000 ByNATIONALCONFERENCEOFCOMMISSIONERSONUNI FORMSTATELAWSD ecember13,2000 ,83 HuntingtonStreet,NewLondon,CT06320, , ,16thFloor,BancoPopularCenter,HatoRey, ,100 MainStreet, ,Burlington, , ,Rockville, ,OneLandmarkSquare,17thFloor,Stamford, ,UniversityofMissouri-Columbia,SchoolofL aw,203 HulstonHall,Columbia,MO65211, ,UniversityofArizona, ,MountainandSpeedwayStreets,Tucson,AZ857 21,CommitteeonStyleLiaisonJEREMIAHMARSH, Suite4300,ThreeFirstNationalPlaza,Chicag o, , ,Midland, ,JR.

2 ,CourtofAppeals, , ,Raleigh,NC27602 JOANZELDON,SuperiorCourt,500 IndianaAvenue, ,Room1640,Washington, , ,Charleston,WV25322, ,1100 HuntingtonBuilding,925 EuclidAvenue,Cleveland,OH44115-1475,Divi sionChairAMERICANBARASSOCIATIONADVISORSR ICHARDCHERNICK,3055 WilshireBoulevard,7thFloor,LosAngeles,CA 90010-1108, , ,Portland,OR97205, ,JR.,3300 QuakerTower, ,Chicago,IL60610-4795,SeniorLawyersDivis ionAdvisorYARKOSOCHYNSKY,350 TheEmbarcadero,6thFloor,SanFrancisco,CA9 4105-1250,RealProperty, ,27 BadgerDrive,Livingston,NJ07039,Co-Adviso rMAXZIMNY,Floor3,1710 Broadway,NewYork,NY10019-5254, ,UniversityofOklahoma,CollegeofLaw,300 TimberdellRoad,Norman,OK73019, ,1505 RoxburyRoad,AnnArbor,MI48104, ,Suite1300 Chicago,Illinois60611312 [ACT] ; [APPLICATION] [MOTION] ; ;COMPETENCYTOTESTIFY;ATTORNEY ;SUBPOENAS;DEPOSITIONS; ; ;ATTORNEY (UAA),promulgatedin1955.

3 ,thegreatercomplexityofmanydisputesresol vedbyarbitration, (1)whodecidesthearbitrabilityofadisputea ndbywhatcriteria;(2)whetheracourtorarbit ratorsmayissueprovisionalremedies;(3)how apartycaninitiateanarbitrationproceeding ;(4)whetherarbitrationproceedingsmaybeco nsolidated;(5)whetherarbitratorsarerequi redtodisclosefactsreasonablylikelytoaffe ctimpartiality;(6)whatextentarbitratorso ranarbitrationorganizationareimmunefromc ivilactions;(7)whetherarbitratorsorrepre sentativesofarbitrationorganizationsmayb erequiredtotestifyinanotherproceeding;(8 )whetherarbitratorshavethediscretiontoor derdiscovery,issueprotectiveorders,decid emotionsforsummarydispositions,holdprehe aringconferencesandotherwisemanagethearb itrationprocess;(9)whenacourtmayenforcea preawardrulingbyanarbitrator;(10)whatrem ediesanarbitratormayaward,especiallyinre gardtoattorney sfees,punitivedamagesorotherexemplaryrel ief;(11)whenacourtcanawardattorney sfeesandcoststoarbitratorsandarbitration organizations;(12)whenacourtcanawardatto rney sfeesandcoststoaprevailingpartyinanappea lofanarbitrator saward.

4 And(13)whichsectionsoftheUAAwouldnotbewa ivable,animportantmattertoinsurefundamen talfairnesstothepartieswillbepreserved,p articularlyinthoseinstanceswhereoneparty mayhavesignificantlylessbargainingpowert hananother;and(14) (RUAA) ,arbitrationisa2consensualprocessinwhich autonomyofthepartieswhoenterintoarbitrat ionagreementsshouldbegivenprimaryconside ration, ,theunderlyingreasonmanypartieschoosearb itrationistherelativespeed,lowercost, ,whereapplicable, , , sfees, (FAA), ,wherebyFAAstandardsandtheemphaticallypr o-arbitrationperspectiveoftheFAAcontrol, ,thepreemption-relatedopinionsoftheSupre meCourthavecenteredinlargepartonthetwoke yissuesthatariseatthefrontendofthearbitr ationprocess , (1967); , (1983); , (1984); , (1987); , (1995);Doctor , (1996).

5 Thatbodyofcaselawestablishesthatstatelaw ofanyilk,includingadaptationsoftheRUAA,m ootingorlimitingcontractualagreementstoa rbitratemustyieldtothepro-arbitrationpub licpolicyvoicedinSections2,3, ,confirmationandmodificationofarbitratio nawardsarethesubjectofSections9,10,11, frontend issuesofenforceabilityandsubstantivearbi trability,thereisnodefinitiveSupremeCour tcaselawspeakingtothepreemptiveeffect,if any,oftheFAAwithregardtothese backend (a) ,theSupremeCourt sunequivocalstandtodateastothepreemptive effectoftheFAAprovidesstrongreasontobeli evethatasimilarresultwillobtainwithregar dtoSection10(a) ,andiftheSupremeCourteventuallydetermine sthattheSection10(a)standardsarethesoleg roundsforvacaturofcommercialarbitrationa wards,FAApreemptionofconflictingstatelaw withregardtothe backend issuesofvacatur(andconfirmationandmodifi cation) (a)groundsarenottheexclusivecriteriaforv acatur,thepreemptiveeffectofSection10(a)

6 Wouldmostlikelybelimitedtotherulethatsta tearbitrationactscannoteliminate,limitor modifyanyofthefourgroundsofpartyandarbit ratormisconductsetoutinSection10(a).Anyd efinitivefederal commonlaw, pertainingtothenonstatutorygroundsforvac aturotherthanthosesetoutinSection10(a),a rticulatedbytheSupremeCourtorestablished asaclearmajorityrulebytheUnitedStatesCou rtsofAppeals, (a)groundsarenotexclusivewouldalsofreeth eStatestocodifyothergroundsforvacaturbey ondthosesetoutinSection10(a).Thesevariou s, , , (1989) ,Inc., (1995). ,theirbargainwillbehonored aslongasthestatelawprinciplesinvokedbyth echoice-of-lawprovisiondonotconflictwith theFAA , ,ASWA llstatePainting& , ( );RussBerrie& , ( ).

7 (a) ,whenpartieschoosetocontractuallyspecify theprocedurestobefollowedundertheirarbit rationagreement,theRUAA contemplatesthatthecontractually-establi shedprocedureswillcontrolovercontrarysta telaw,exceptwithregardtoissuesdesignated as nonwaivable inSection4(b)and(c) ,thereareotherareasofarbitrationlawwhere theFAAdoesnotpreemptstatelaw, , , (1995)(quotingVolt, (1989))andquotedinCassarotto, ,685(1996);andCassarotto, ( , ,511(1974)). equalfooting thequestionofwhethertheRUAA shouldexplicitlysanctioncontractualprovi sionsfor opt-in reviewofchallengedarbitrationawardsbeyon dthatpresentlycontemplatedbytheFAAandcur rentstatearbitrationacts.

8 Opt-in , opt-in contractualprovisionestablishesanappella tearbitralmechanismtowhichchallengedarbi trationawardscanbesubmittedforreview, ,therewereanumberofreasonsthatresultedin thedecisionnottoincludestatutorysanction ofthe opt-in deviceforexpandedjudicialreviewintheRUAA :(1)thecurrentuncertaintyastothelegality ofastatestatutorysanctionofthe opt-in device,(2)the disconnect betweentheAct spurposeoffosteringtheuseofarbitrationas afinalandbindingalternativetotraditional litigationinacourtoflaw,and(3) , opt-in judicialreviewmechanism,therearefew,ifan y,legalconcernsraisedbystatutorysanction of opt-in ,asexplainedintheSectionBoftheCommentsto Section23,becausethecurrent,contract-bas edviewofarbitrationestablishesthatthepar tiesarefreetodesigntheinnerworkingsofthe irarbitrationproceduresinanymannertheyse efit, opt-in ,withintheconstraintsimposedbytheexistin ganddevelopinglaw, ( ,discovery[RUAAS ection17],consolidationofclaims[RUAAS ection10],andarbitratorimmunity[RUAAS ection14]) (RUAAS ection21)andthestandardsforarbitratordis closureofpotentialconflictsofinterest(RU AAS ection12)

9 Borderline issuesarenotpurelyproceduralinnaturebutu nlikethe frontend and backend , (UNCITRAL).OtherStateshaveapproachedinte rnationalarbitrationinavarietyofways,suc hasadoptingpartsoftheUNCITRALM odelLawtogetherwithprovisionstakendirect lyfromthe1958 UnitedNationsConventiononRecognitionandE nforcementofForeignArbitralAwards(common lyreferredtoastheNewYorkConvention) ,towhichtheUnitedStatesadheredin1970( 201), fallingunderthe[NewYork]Convention andpermitsremovalofanysuchcasefromastate courttothefederalcourt atanytimepriortotrial. 203, , :(1)wherethepartiesdesignateaspecificsta tearbitrationlawtogoverntheinternational arbitrationand(2) , ,theDraftingCommitteedecidednottoaddress internationalarbitrationasaspecificsubje ctintherevisionoftheUAA;however,theCommi tteeutilizedprovisionsoftheUNCITRALM odelLaw,theNewYorkConvention, [Act]:(1) Arbitrationorganization meansanassociation,agency,board,commissi on,orotherentitythatisneutralandinitiate s,sponsors,oradministersanarbitrationpro ceedingorisinvolvedintheappointmentofana rbitrator.

10 (2) Arbitrator meansanindividualappointedtorenderanawar d,aloneorwithothers,inacontroversythatis subjecttoanagreementtoarbitrate.(3) Court means[acourtofcompetentjurisdictioninthi sState].(4) Knowledge meansactualknowledge.(5) Person meansanindividual,corporation,businesstr ust,estate,trust,partnership,limitedliab ilitycompany,association,jointventure,go vernment;governmentalsubdivision,agency, orinstrumentality;publiccorporation;oran yotherlegalorcommercialentity.(6) Record arbitrationorganization issimilartotheoneusedinsection74ofthe199 6 EnglishArbitrationActanddescribeswellthe functionsofagenciessuchastheAmericanArbi trationAssociation(AAA),theCPR,JAMS,theN ationalArbitrationForum,NASDR egulation,Inc.