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Standard Alternative Dispute Resolution (Arbitration and Mediation) Clauses

I often hear litigators and clients complaining that the process of arbitration is flawed and does not deliver on its aspirations to provide a cheaper, quicker alternative to litigation in court.  My response is that they are not really upset with the process of arbitration or mediation, but with the person who drafted the Alternative Dispute Resolution clause in their contract.  The Arbitrator must administer the arbitration proceed pursuant to how the parties wrote the agreement.  Therefore, as I wrote in this post, if you want a better process, write a better contract.  I have endeavored to provide both my preferred standard ADR clause (with explanations), but also some alternative model arbitration, mediation, and ADR clauses from other trusted sources.  The drafter should determine the process which will best benefit each client and draft the clause accordingly.

The italicized language below explains the rationale behind clauses and why one might choose that clause over another alternative.[1]

General ADR Clause

Some practitioners prefer to create a single paragraph containing all of the ADR provisions. While I am of the opinion that more control creates a better opportunity for a desired process, below are some examples of such all-inclusive clauses.  You may prefer one or a portion of one or another of these paragraphs. 

My Preferred General ADR Clause.

Except as specifically provided herein, the parties further agree that any Dispute that is not resolved through mediation shall be settled by mandatory binding arbitration administered by [American Arbitration Association, JAMS, etc.] in accordance with its then-current [Name of the organization’s rules] (“_______ Rules”).  Dispute is defined as any and all disagreements, controversies, or claims of any sort between the parties hereto which arise out of, or in any way relating to, this Agreement any of the parties’ respective rights and obligations arising out of this Agreement, or the making, performance, breach, interpretation, or termination of this Agreement, including any claims based in tort.  The arbitration demand and counterclaim(s) must contain a clear and concise statement of the Dispute. The respondent’s answer and any counterclaims must be filed within 20 calendar days of service of the demand.  In connection with any arbitration proceeding, each party must submit any dispute or claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) in the arbitration. Any such claim which is not submitted or filed as described hereinabove will be forever barred and must be considered waived. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

Alternative Very Broad Option 1. Any dispute, controversy or claim arising out of, relating to or in connection with this contract, including the breach, termination, or validity thereof, shall be resolved by final and binding arbitration. The arbitral tribunal shall have the sole power to rule on any challenge to its own jurisdiction and all issues regarding arbitrability shall be decided solely by the arbitral tribunal.±

Alternative Very Broad Option 2.  Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its then-current Commercial Arbitration Rules [including the Optional Rules for Emergency Measures of Protection]. The arbitration hearing shall take place in _________________, ______ before a single arbitrator. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

Alternative Very Broad Option 3.  Any dispute, claim or controversy arising out of or relating to this Agreement or the breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in [insert the desired place of arbitration] before [one/three] arbitrator(s). The arbitration shall be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures [and in accordance with the Expedited Procedures in those Rules] [or pursuant to JAMS’ Streamlined Arbitration Rules and Procedures]. Judgment on the Award may be entered in any court having jurisdiction. This clause shall not preclude parties from seeking provisional remedies in aid of arbitration from a court of appropriate jurisdiction.

Alternative Very Broad Option 4.  Any dispute, controversy or claim arising out of or relating to this contract, including the formation, interpretation, breach or termination thereof, including whether the claims asserted are arbitrable, will be referred to and finally determined by arbitration in accordance with the JAMS International Arbitration Rules.

Alternative Very Broad Option 5.  Any dispute, controversy, or claim relating to, connected with, or arising out of this Agreement, including any question regarding its existence, validity, or termination, as well as any challenge to the tribunal’s jurisdiction shall be resolved by final and binding arbitration.

Alternative Narrow Option 1. All disputes arising under this Agreement… [precludes arbitration of matters that, while related to the agreement, do not arise out of it].

Alternative Narrow Option 2. Any dispute, controversy, or claim relating to, connected with, or arising out of this Agreement, including any question regarding its existence, validity, or termination, but with the exception of claims arising under Article ___ of this Agreement….” [precludes specific claims, even if they arise out of the agreement] “Except for those matters which are specifically excluded from arbitration hereunder as set forth below (‘Exempted Matters’), any dispute, controversy, or claim connected with, relating to, or arising out of this Agreement … The following Exempted Matters shall be specifically excluded from arbitration: “[May be combined with forum selection clause, e.g. “The courts of [Country X/State Y] shall have exclusive jurisdiction over all Exempted Matters.” or With respect to any matter not subject to arbitration under this Agreement, each party hereby irrevocably (i) submits to the non-exclusive jurisdiction of the courts of [Country X / State Y], (ii) waives any objection it may have at any time to the laying of venue of any such proceedings brought in such courts, (iii) waives any claim as to forum non conveniens, and (iv) waives the right to object with respect to such proceedings that any such court does not have jurisdiction over such party.]

Alternative Complex Arbitration Option. Any controversy or claim arising from or relating to this contract or the breach thereof shall be settled by arbitration administered by the American Arbitration Association under its applicable Procedures for Large, Complex Commercial Disputes, and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall take place before a panel of three arbitrators in [City, State].

Alternative Ad Hoc Provision for Arbitration Administered Privately But Adopting the Procedural Rules of a Tribunal. Parties may choose this option when they perceive that they can save money by engaging the arbitrator directly without paying the administrative fees associated with an arbitrator at a given organization.

Except as specifically provided herein, the parties further agree that any Dispute that is not resolved through mediation shall be settled by mandatory binding arbitration in accordance with [Name of the organization] then-current [Name of the organization’s rules] (“_____________ Rules”).  Dispute is defined as any and all disagreements, controversies, or claims of any sort between the parties hereto which arise out of, or in any way relating to, this Agreement any of the parties’ respective rights and obligations arising out of this Agreement, or the making, performance, breach, interpretation, or termination of this Agreement, including any claims based in tort.

Within ___ calendar days after the arbitration demand is served on the respondent, the parties must jointly select an arbitrator with the qualifications required herein. If the parties do not agree on an arbitrator within ___ calendar days, a party may petition [the agency whose rules govern the arbitration to request a list of arbitrators and select one under the agency’s rules] [or a court having jurisdiction to appoint an arbitrator]. The arbitration shall administered by the arbitrator, and the parties do not agree to have the matter administered by any private arbitration company such as the American Arbitration Association, or JAMS, etc.

Mediation

Consider whether you want to require mediation ever, before filing a demand for arbitration, or before the arbitration.  Mediation with the right mediator and with motivated parties can save time and money.  Some advocates do not like mandatory mediation prior to filing an arbitration demand because parties tend to believe they have little or no exposure and have not been educated regarding their risk by the discovery process.  Others believe it is the perfect opportunity to resolve the matter quickly and before the parties have spent so much money in attorney fees that they have a hard time justifying a settlement.  Still others believe that a requirement that the parties mediate at least 60 days prior to the final arbitration hearing allows the parties to mediate at any time, but requires that they mediate before engaging in the final hearing, after the parties should understand their relative risks and opportunities.

My Mandatory Mediation-Before-Arbitration Provision.

Except as specifically provided herein, if any Dispute cannot be settled through direct discussions, the parties agree to submit the Dispute to mediation administered by the [Mediation Company] under its then-current Mediation Procedures (“Mediation Rules”) before resorting to arbitration. The Dispute must be mediated before a mediator selected pursuant to the Mediation Rules.

Deadline for Mediation. The party requesting mediation must provide written notice of the request for mediation to the other party in the manner prescribed in the Mediation Rules.  The request must specify with reasonable particularity the matters for which mediation is sought. Any mediation shall be held within ___ calendar days of the written request for mediation made in accordance with requirements of the Mediation Rules, or such longer period as the parties may agree upon in writing.

Place of Mediation. The mediation shall be held in [City, State].

Cost of Mediation and Consequences of Failure to Comply. The parties shall equally share the cost of the mediation, including administrative costs and mediator fees.  Should a party refuse to pay its share of the costs of mediation, that party shall be in default of this Agreement, and the Dispute may proceed directly to arbitration without mediation.  Any costs or fees, including attorney fees, incurred by the non-defaulting party in pursuing mediation may be sought as damages in arbitration.

Requests for Emergency or Equitable Relief. Requests for Emergency or Equitable Relief, including injunctive relief, are not subject the mandatory mediation.

Confidentiality. Except as may be required by law, neither a party nor any arbitrator or mediator appointed regarding any Dispute may disclose the existence, content, or results of any arbitration or mediation hereunder without the prior written consent of all parties to the Dispute.

Alternative Confidentiality Clause. All communications during the mediation are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence and any additional confidentiality and professional secrecy protections provided by applicable law.

Alternative Mediation Clauses

Alternative Negotiation as First Step Option 1. The parties shall endeavor to resolve amicably by negotiation all disputes arising out of, relating to, or in connection with this Agreement, including any question regarding its existence, validity, or termination. Any such dispute which remains unresolved [30] days after either party requests in writing negotiation under this clause, or within such other period as the parties may agree in writing, shall be finally resolved by binding arbitration under the . . .

Alternative Negotiation as First Step Option 2. If any dispute arises in connection with this agreement, a director [or other senior representatives of the parties with authority to settle the dispute] will, within ___ days of a written request from one party to the other, meet in a good faith effort to resolve the dispute.  If the dispute is not wholly resolved at that meeting, the parties agree to enter into mediation in good faith to settle such a dispute and will do so in accordance with the CEDR Model Mediation Procedure. Unless otherwise agreed between the parties within 14 days of notice of the dispute, the mediator will be nominated by CEDR. To initiate the mediation a party must give notice in writing (‘ADR notice’) to the other party[ies] to the dispute, referring the dispute to mediation. A copy of the request should be sent to CEDR. Unless otherwise agreed, the mediation will start not later than ___ days after the date of the ADR notice.

Alternative Negotiation as First Step Option 3. If the matter is not resolved by negotiation, then the matter will proceed to mediation as set forth below.

The parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiation between executives who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for administration of this Agreement. Any party may give the other party written notice of any dispute not resolved in the normal course of business. Within ___ days after delivery of the notice, the receiving party shall submit to the other a written response. The notice and response shall include with reasonable particularity (a) a statement of each party’s position and a summary of arguments supporting that position, and (b) the name and title of the executive who will represent that party and of any other person who will accompany the executive. Within ___ days after delivery of the notice, the executives of both parties shall meet at a mutually acceptable time and place.

Unless otherwise agreed in writing by the negotiating parties, the above-described negotiation shall end at the close of the first meeting of executives described above (“First Meeting”). Such closure shall not preclude continuing or later negotiations, if desired.  All offers, promises, conduct and statements, whether oral or written, made in the course of the negotiation by any of the parties, their agents, employees, experts and attorneys are confidential, privileged and inadmissible for any purpose, including impeachment, in arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the negotiation.

Alternative Alternative Mandatory Mediation as First Step Clauses Option 1. Any controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by mediation under the [mediation procedures rules] of the [Mediation Company]. If a party fails to respond to a written request for mediation within ___ days after service or fails to participate in any scheduled mediation conference, that party shall be deemed to have waived its right to mediate the issues in dispute.  If the mediation does not result in settlement of the dispute within __ days after the initial mediation conference, or if a party has waived its right to mediate any issues in dispute, then any unresolved controversy or claim arising out of or relating to this Agreement, or breach thereof, shall be settled by binding arbitration administered by the [Mediation Company] in accordance with its [mediation procedures rules], and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

Alternative Mandatory Mediation as First Step Clauses Option 2. The parties shall endeavor to resolve by mediation under the [designated set of mediation rules] (the “Mediation Rules”) all disputes arising out of, relating to, or in connection with this Agreement, including any question regarding its existence, validity, or termination. Any such dispute not settled pursuant to the Mediation Rules within ___ days after appointment of the mediator or within such other period as the parties may agree in writing, shall be finally settled under the…

Alternative Mandatory Mediation as First Step Clauses Option 3. No party may commence any court proceedings/arbitration in relation to any dispute arising out of this agreement until it has attempted to settle the dispute by mediation and either the mediation has terminated or the other party has failed to participate in the mediation, provided that the right to issue proceedings is not prejudiced by a delay.

Alternative Mandatory Mediation as First Step Clauses Option 4. The parties hereby submit the following dispute to mediation administered by the American Arbitration Association under its Commercial Mediation Procedures [the clause may also provide for the qualifications of the mediator(s), the method for allocating fees and expenses, the locale of meetings, time limits, or any other item of concern to the parties.±

The Parties May Negotiate But Are Not Required To Do So. The parties agree that any and all disputes, claims or controversies arising out of or relating to this Agreement shall be submitted to JAMS, or its successor, for mediation, and if the matter is not resolved through mediation, then it shall be submitted to JAMS, or its successor, for final and binding arbitration pursuant to the clause set forth in Paragraph {X} below.

Either party may commence mediation by providing to JAMS and the other party a written request for mediation, setting forth the subject of the dispute and the relief requested.

The parties will cooperate with JAMS and with one another in selecting a mediator from the JAMS panel of neutrals and in scheduling the mediation proceedings. The parties agree that they will participate in the mediation in good faith and that they will share equally in its costs.

All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the parties, their agents, employees, experts and attorneys, and by the mediator or any JAMS employees, are confidential, privileged and inadmissible for any purpose, including impeachment, in any arbitration or other proceeding involving the parties, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or non-discoverable as a result of its use in the mediation.

Either party may initiate arbitration with respect to the matters submitted to mediation by filing a written demand for arbitration at any time following the initial mediation session or at any time following 45 days from the date of filing the written request for mediation, whichever occurs first (“Earliest Initiation Date”). The mediation may continue after the commencement of arbitration if the parties so desire.

At no time prior to the Earliest Initiation Date shall either side initiate an arbitration or litigation related to this Agreement except to pursue a provisional remedy that is authorized by law or by JAMS Rules or by agreement of the parties. However, this limitation is inapplicable to a party if the other party refuses to comply with the requirements of Paragraph __ above.

Alternative Mandatory Negotiation And Mediation Before Arbitration Option 1. All disputes arising out of, relating to, or in connection with this Agreement, including any question regarding its existence, validity, or termination (a “Dispute”), shall be resolved in accordance with the procedures specified below, which shall be the sole and exclusive procedures for the resolution of any such Dispute.

 (A) Negotiation. The parties shall endeavor to resolve any Dispute by negotiation between executives who have authority to settle the Dispute and who are at a higher level of management than the persons with direct responsibility for administration or performance of this Agreement.

(B) Mediation. Any Dispute not resolved by negotiation in accordance with paragraph (A) within [30] days after either party requested in writing negotiation under paragraph (A), or within such other period as the parties may agree in writing, shall be settled by mediation under the [designated set of mediation rules].

(C) Arbitration. Any Dispute not resolved by mediation in accordance with paragraph (B) within [45] days after appointment of the mediator, or within such other period as the parties may agree in writing, shall be finally settled under the [designated set of arbitration rules] (the “Arbitration Rules”) by [one or three] arbitrator[s] appointed in accordance with the Arbitration Rules. The place of arbitration shall be […]. The language of arbitration shall be […]. [All communications during the negotiation and mediation pursuant to paragraphs (A) and (B) are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence and any additional confidentiality and professional secrecy protections provided by applicable law.

Alternative Mandatory Negotiation And Mediation Before Arbitration Option 2. If a dispute arises out of or relates to this contract, or the breach thereof, and if the dispute cannot be settled through negotiation, the parties agree first to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration, litigation, or some other dispute resolution procedure.±

Alternative Mandatory Negotiation And Mediation Before Arbitration Option 3.   If a dispute arises from or relates to this contract or the breach thereof, and if the dispute cannot be settled through direct discussions, the parties agree to endeavor first to settle the dispute by mediation administered by the American Arbitration Association under its Commercial Mediation Procedures before resorting to arbitration. The parties further agree that any unresolved controversy or claim arising out of or relating to this contract, or breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.±

Tolling of Statute of Limitations During Negotiations/Mediation.

Alternative Tolling Option 1. All applicable statutes of limitation and defenses based upon the passage of time shall be tolled while the procedures specified in Paragraphs 1 and 2 above are pending and for 15 calendar days thereafter. The parties will take such action, if any, required to effectuate such tolling.

Alternative Tolling Option 2. Any applicable statutes of limitations and defenses based upon the passage of time shall be tolled upon the filing of the request for [negotiation or mediation or] arbitration, as provided in this Agreement, and until [30 days] after the designated mediator or one of the parties has declared an impasse with no request for arbitration having been made, or where a request for arbitration has been made, until 60 days after the issuance of the final award.

Mediation Prior to Final Arbitration Hearing But Not Before Filing Arbitration Demand.

Any Dispute submitted to arbitration which remains unresolved shall be mediated no later than ___ days prior to the date first set for the arbitration hearing.  The parties shall certify to the Arbitrator(s) in writing no later than ___ days prior to the date first set for the arbitration hearing that they have mediated the matter and the result thereof.

Mandatory Binding Arbitration

My Mandatory Binding Arbitration Clause.

Except as specifically provided herein, the parties further agree that any Dispute that is not resolved through mediation shall be settled by mandatory binding arbitration administered by the [arbitration tribunal] in accordance with its then-current __________________ Rules (“Arbitration Rules”).  In connection with any arbitration proceeding, each party must submit any Dispute or claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) in the arbitration. Any such claim which is not submitted or filed as described hereinabove will be forever barred and must be considered waived. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof

Nevada’s Statutorily-REQUIRED Paragraph.

Nevada Revised Statute 597.995 requires a specific authorization and affirmative agreement signed by any party to be bound by an arbitration agreement.  Unreported cases suggest that a signature at the end of the contract is not sufficient, and that even initials at the bottom of every page is not sufficient to satisfy the statutory requirement. One case cited approvingly of the practice of reciting the requirement followed by a signature and the address of the person signing the document.  I would recommend having the typeface at least as big as the largest typeface in the agreement and bolded.

“Nevada Revised Statute 597.995 requires specific authorization and an affirmative agreement to have Disputes between the parties heard by arbitration. By signing below, I therefore declare and acknowledge on the date of execution of this Agreement that I (or the entity on whose behalf I sign) have read the mandatory arbitration provision in the Agreement and its related clauses.  I do affirmatively agree to and give this specific authorization to submit to arbitration any Dispute arising between the parties to this Agreement, and that I (or any entity on whose behalf I am signing) am bound to the same, desire to have any Dispute decided by binding arbitration, and agree that this binding arbitration agreement is effective and binding against me/it.

Signed:______________________  Address:____________________________________”

Filing the Claim.

The claimant shall commence the arbitration by delivering a notice of arbitration to the respondent setting out the nature of the claim(s) and the relief requested. Within [30] days of the receipt of the notice of arbitration, the respondent shall deliver to the claimant its answer and any counterclaim(s), setting out the nature of such counterclaims(s) and the relief requested.

The arbitration demand and any counterclaim(s) must be a clear and concise statement of the claim or dispute. The respondent’s answer and any counterclaims must be filed within 20 calendar days of service of the demand.

The arbitration demand must contain a clear and concise statement of the claim or dispute.  The respondent’s answer and any counterclaims must be filed within 20 calendar days of service of the demand.  In connection with any arbitration proceeding, each party must submit any dispute or claim which would constitute a compulsory counterclaim (as defined by Rule 13 of the Federal Rules of Civil Procedure) in the arbitration. Any such claim which is not submitted or filed as described hereinabove will be forever barred and must be considered waived.  Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

Rules.

All disputes arising out of or in connection with the present contract shall be finally settled under the [INSERT NAME OF RULES] by one or more arbitrators appointed in accordance with the said Rules.

My Standard Clause regarding the selection of and number of arbitrators.

The Dispute shall be heard by a single arbitrator, unless the Amount in Controversy exceeds $____________, in which case the Dispute shall be heard by a panel of three arbitrators.  All arbitrators shall be chosen in accordance with the Commercial Rules, and no arbitrator shall be appointed by either party.  The Arbitrator(s), and not any court, shall have the sole authority to decide the Dispute, as well as to determine arbitrability of any Dispute.

Alternative Arbitrator Selection Option 1. There shall be [one or three] arbitrator[s].

Alternative Arbitrator Selection Option 2. Claims shall be heard by a single arbitrator.±

Alternative Arbitrator Selection Option 3. Claims shall be heard by a panel of three arbitrators.±

Alternative Arbitrator Selection Option 4.  Within 15 days after the commencement of arbitration, each party shall select one person to act as arbitrator and the two selected shall select a third arbitrator within ten days of their appointment. If the arbitrators selected by the parties are unable or fail to agree upon the third arbitrator, the third arbitrator shall be selected by the American Arbitration Association.±

Alternative Arbitrator Selection Option 5. Claims shall be heard by a single arbitrator, unless the claim amount exceeds [dollar amount], in which case the dispute shall be heard by a panel of three arbitrators.±

Alternative Arbitrator Selection Option 6. Within ten calendar days after the arbitration demand is served on the respondent, the parties must jointly select an arbitrator with at least five years’ experience in that capacity. If the parties do not agree on an arbitrator within ten calendar days, a party may petition [the agency whose rules govern the arbitration to request a list of arbitrators and select one under the agency’s rules] [or a court having jurisdiction to appoint an arbitrator].

Alternative Arbitrator Selection Option 7. There shall be one arbitrator agreed to by the parties within twenty (20) days of receipt by respondent of the request for arbitration or in default thereof appointed by the [arbitral institution] in accordance with its [institution’s rules to apply].

Alternative Arbitrator Selection Option 8. There shall be three arbitrators. The parties agree that one arbitrator shall be appointed by each party, and the third presiding arbitrator shall be appointed by agreement of the two party-appointed arbitrators within fourteen (14) days of the appointment of the second arbitrator or in default of such agreement, by the [arbitral institution].

Alternative Arbitrator Selection Option 9. There shall be three arbitrators, one selected by the initiating party in the request for arbitration, the second selected by the other party within [30] days of receipt of the request for arbitration, and the third, who shall act as [chairperson or presiding arbitrator], selected by the two party-appointed arbitrators within [30] days of the selection of the second arbitrator. Any arbitrator(s) not selected within these time periods shall be selected by the [institution].

Qualifications of the Arbitrator(s).

The arbitrator(s) shall be _____________ [insert qualifications –number of years of practice, judicial experience, peer ratings, licensed in a jurisdiction, etc.].

Qualifications of the Arbitrator(s) Option 1. The presiding arbitrator shall be a practicing attorney admitted in [jurisdiction X] specializing in construction law.

Qualifications of the Arbitrator(s) Option 2. The arbitrator shall be a certified public accountant.

Qualifications of the Arbitrator(s) Option 3. The arbitrator shall be a lawyer having at least __ years of experience in _____ law.

Qualifications of the Arbitrator(s) Option 4. The arbitration panel shall consist of a lawyer having at least ___ years of experience dealing with complex contracts, an accountant having experience in calculating lost profits, and a panel chair experienced in conducting complex arbitrations Form of decision.

Qualifications of the Arbitrator(s) Option 5. If the arbitration is to be conducted by a sole arbitrator, the contract clause might provide that the arbitrator must be:

A retired judge from a particular court;

A lawyer with 10 years of active practice in a specified area, such as construction or computer technology;

If the arbitration is to be handled by a three-arbitrator panel, the contract clause might provide;

That the Chair be an attorney with at least 20 years of active litigation experience;

That the Chair be a retired judge from a particular court;

That one of the wing arbitrators be an expert in an area such as construction or be an accountant or a particular type of engineer; or

That the Chair must previously have served as Chair or sole arbitrator in at least 10 arbitrations where an award was rendered following a hearing on the merits.

Payment of Arbitrator Fees, Administrative Fees, and Attorney Fees and Costs.

This clause is designed to avoid one party being able to stall an arbitration forever by refusing to pay either the arbitrator or the administrative fees. 

The parties shall bear administrative fees and arbitrator costs in accordance with Commercial Arbitration Rules.  The parties agree that failure or refusal of a party to pay its required share of the deposits for arbitrator compensation or administrative charges shall constitute a waiver by that party to present any evidence or cross-examine witnesses, and a waiver of that party’s claims in the Dispute.  In such event, the other party shall be required to present such evidence and legal argument as the arbitrator(s) may require for the making of an award.  Such waiver shall not allow for a default judgment against the non-paying party in the absence of evidence presented as provided for above.

Location or Seat of Arbitration.

The arbitration shall be held in [City, State].

Language of the Arbitration.

The arbitration shall be held, and the award shall be rendered, in the [Language of Arbitration] language.

Time of Final Arbitration Hearing.

The final arbitration hearing for any matter where the Amount in Controversy is less than $_______ shall be held no later than __________ months from the date of the arbitration demand or such longer period as the parties may agree upon in writing.  For matters where the Amount in Controversy exceeds $____________, the final arbitration hearing shall be held at a date and time that is proportional to the claims.  Except as otherwise noted hereinafter, hearings will take place pursuant to the standard procedures of the Commercial Rules that contemplate in-person hearings.

Discovery.

My Mandatory Exchange of Information Clause. Your client may benefit from not having any discovery at all.  If so, this clause is not for you.  If you think discovery will benefit, this requires a baseline mandatory disclosure of the type that most jurisdictions require and to which most litigators are familiar. 

In all matters, regardless of Amount in Controversy, the parties shall exchange the following information within 20 days of the appointment of the Arbitrator(s) without further order form the Arbitrator(s).  The parties shall exchange the name and, if known, the address and telephone number of each individual likely to have information regarding any matter not privileged which is relevant to the subject matter involved in this Dispute, regardless of whether it relates to the claim or defense of the party or that of another party to the Dispute.  The mandatory exchange shall include any witness anticipated for impeachment or rebuttal.  The identifying party shall identify the subject(s) on which the witness will provide testimony.  The parties shall also disclose and provide a copy of all documents, data compilations, and tangible things that are in the possession, custody, or control of the party regarding any matter not privileged which is relevant to the subject matter involved in this Dispute, regardless of whether it relates to the claim or defense of the party or that of another party to the Dispute.  The Arbitrator(s) may entertain a request to compel the exchange of information not provided by a party in possession of the same.

Alternative Mandatory Exchange Option 1. The arbitrator(s) shall require disclosure of non-privileged materials, including electronic information, relevant to any parties’ claim or defense, subject to limitations imposed by the arbitrator based on reasonable expense, duplication and undue burden.

Alternative Mandatory Exchange Option 2. (A) Required Disclosures. Except for impeachment-only information, each party must voluntarily disclose: (1) the names and addresses of persons who have discoverable information that the party may use to support its claims or defenses; (2) a copy of the documents that the party may use to support its claims or defenses; and (3) a computation showing each element of damages. (B) Depositions. Each party may have no more than eight hours, total, for depositions. (C) Expert-Witness Reports. Each testifying expert must provide: (1) a written report stating all opinions that he or she will express at the hearing; (2) the basis and reasons for the opinions; (3) the facts and data considered in forming the opinions; (4) all exhibits that will be used to summarize or support the opinions; and (5) his or her résumé. (D) Other Discovery. No other discovery is allowed except by the arbitrator and for good cause. (E) Discovery Disputes. The parties must confer in good faith to resolve all discovery disputes. If they cannot resolve these themselves, the parties must attempt to do so in conference with the arbitrator. If the dispute is not resolved in conference, the arbitrator must promptly rule on the issues.

My Emergency and Equitable Relief Determined by the Arbitrator Only.

Many practitioners are not aware that arbitrators can order injunctive relief.  Including a clause allowing the arbitrator to grant injunctive or other emergency relief will save the parties from having to file suit AND an arbitration in the same controversy.  If it is to your client’s benefit that the emergency relief be sought by a court, see Section 3.11.3 below.

 The parties agree that any and all interim or equitable relief, including requests for injunctive or other emergency relief shall be heard exclusively by the Arbitrator and not by a court.  All such requests shall be heard in accordance with the Commercial Rules.

Alternative Interim Relief Option 1. Except as otherwise specifically limited in this Agreement, the arbitral tribunal shall have the power to grant any remedy or relief that it deems appropriate, whether provisional or final, including conservatory relief and injunctive relief, and any such measures ordered by the arbitral tribunal may, to the extent permitted by applicable law, be deemed to be a final award on the subject matter of the measures and shall be enforceable as such.

Alternative Interim Relief Option 2. The parties also agree that the AAA Optional Rules for Emergency Measures of Protection shall apply to the proceedings.±

Alternative Interim Relief Option 3. JAMS Comprehensive Rules provide for the appointment of an Emergency Arbitrator to address and decide a request for emergency relief. (See Comprehensive Rule 2(c).) If the parties to the Agreement do not wish to have this procedure available, they must opt out in their arbitration agreement or by written agreement later.

My Emergency and Equitable Relief Determined by the Court.

Either party retains the right, consistent with this Agreement, to apply to any court of competent jurisdiction for provisional and/or conservatory relief, including pre-arbitral attachments or injunctions, and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate.

Alternative Interim Relief Determined by the Court. Notwithstanding the foregoing, either party may immediately bring a proceeding seeking preliminary injunctive relief in a court having jurisdiction thereof which shall remain in effect until a final award is made in the arbitration.

My Proportional Discovery Construct. This clause is designed to provided a tiered discovery system.  It limits discovery according to the amount in controversy.  Therefore, the parties determine under what circumstances full-scale discovery is allowed and under what circumstances discovery will be limited.

The parties desire to conduct discovery proportional to the Dispute.  If the Amount in Controversy (defined herein as the claim amount, including any counterclaims, but exclusive of interest, attorney fees and arbitration costs) is between $________________ and $________________, discovery shall consist of no more than _____ depositions not to exceed _______ hours each.  No party may make a speaking objection at a deposition, except to preserve privilege.  No interrogatories or requests to admit may be propounded by either party. If the Amount in Controversy exceeds $________________, any and all discovery allowed pursuant to the then-current Federal Rules of Civil Procedure shall be allowed.

Proportional Discovery Option 1. In any arbitration arising out of or related to this Agreement, requests for documents: (1) Shall be limited to documents which are directly relevant to significant issues in the case or to the case’s outcome; (2) Shall be restricted in terms of time frame, subject matter and persons or entities to which the requests pertain; and (3) Shall not include broad phraseology such as “all documents directly or indirectly related to.” (See JAMS Discovery Protocols; JAMS Arbitration Rule 16.2).

Proportional Discovery Option 2. The parties desire to conduct discovery proportional to the Dispute.  The arbitrator shall require exchange by the parties of documents relevant to the issues raised by any claim, defense or counterclaim or on which the producing party may rely in support of or in opposition to any claim, defense or counterclaim, with due regard for eliminating undue burden and expense and the expedited and lower cost nature of arbitration. At the request of a party, the arbitrator may at his or her discretion order the deposition of witnesses. Depositions shall be limited to a maximum of three depositions per party, each of a maximum of four hours duration, unless the arbitrator otherwise determines.

No Discovery Allowed.

The parties agree that they shall have no right to seek production of documents or any other discovery in the arbitration proceedings. In addition, no party to this Agreement is permitted to make any application pursuant to 28 U.S.C. § 1782.

Alternative No Discovery Allowed Option 1. The parties agree that there shall be no disclosure of documents other than the disclosure, prior to the hearing, of documents that each side will present in support of its case. Electronic disclosure by each party shall be limited to copies of electronic information to be presented in support of that party’s case, in print-out or another reasonably usable form. No party to this Agreement is permitted to make any application pursuant to 28 U.S.C. § 1782.

Alternative No Discovery Allowed Option 2. If the dispute is less than dollar amount there shall be no discovery other than the exchange of documents. If the dispute is over dollar amount, discovery shall consist of no more than number depositions of number or less.±

Narrow Discovery Allowed.

The parties shall be entitled to reasonable production of relevant, non-privileged documents, carried out expeditiously. If the parties are unable to agree upon same, the arbitral tribunal shall have the power, upon application of any party, to make all appropriate orders for production of documents by any party. There shall be no discovery depositions. [or: At the request of any party, the arbitral tribunal shall have the discretion to order the examination by deposition of any witness to the extent the arbitral tribunal deems such examination appropriate [or necessary]. Depositions shall be limited to a maximum of [number] per party]. No party to this Agreement is permitted to make any application pursuant to 28 U.S.C. § 1782.

Narrow Discovery Allowed Option 1. The parties shall confer jointly with the arbitral panel at the earliest convenient date to determine the discovery that shall take place. Each party shall have the right to take no more than [number] depositions of potential witnesses not to exceed an aggregate total of [number] hours of deposition time for a party, and shall have the right to serve no more than [number] sets of interrogatories, none of which shall include more than [number] interrogatories. Additional discovery shall be in the discretion of the arbitrator. All discovery shall be completed within [number] months after the selection of the arbitrators, unless this period of time is extended by the tribunal for good cause. No party to this Agreement is permitted to make any application pursuant to 28 U.S.C. § 1782.

Narrow Discovery Allowed Option 2. The parties agree that they will disclose, prior to the hearing, the documents that each side will present in support of its case, as well as documents essential to a matter of import in the proceeding for which a party has demonstrated a substantial need. Disclosure of electronic information shall include (1) disclosure, in reasonably usable form, by each party of electronic information maintained by no more than [specify number] designated custodians; (2) provision only of information created between the date of the signing of the agreement that is the subject of the dispute and the date of the filing of the request for arbitration; (3) disclosure of information from primary storage facilities only; no information is required to be disclosed from back-up servers or backup tapes; no disclosure of information from cell phones, PDAs, voicemails, etc.; and (4) no disclosure of information other than reasonably accessible active data. The parties agree to meet and confer, prior to an initial scheduling conference with the tribunal, concerning the specific modalities and timetable for electronic information disclosure. No party to this Agreement is permitted to make any application pursuant to 28 U.S.C. § 1782.

Narrow Discovery Allowed Option 3. The IBA Rules on the Taking of Evidence in International Commercial Arbitration (as amended) (the ‘IBA Rules’) shall apply together with [the designated arbitration rules]. Where there is inconsistency, the IBA Rules shall prevail, but solely as regards the taking of evidence. No party to this Agreement is permitted to make any application pursuant to 28 U.S.C. § 1782.

Narrow Discovery Allowed Option 4. The parties may include a section in the “substantive part” of the main agreement establishing a contractual obligation of one party to provide the other party with certain specifically defined documents or categories of documents regarding the project. The arbitral clause can make reference to that provision establishing that there will be no further discovery or document exchange between the parties under any other circumstances (including 28 U.S.C. § 1782).

Narrow Discovery Allowed Option 5. The arbitrator(s) shall only require the parties to disclose documents that they intend to rely on in presentation of their case at the hearing.

Narrow Discovery Allowed Option 6. Depositions shall be limited to a maximum of number per party and shall be held within number days of the making of a request. Additional depositions may be scheduled only with the permission of the arbitrators, and for good cause shown. Each deposition shall be limited to a maximum of number hours duration.±

Narrow Discovery Allowed Option 6. Each party will, upon written request of the other party, promptly provide the other with copies of all relevant documents. There shall be no other discovery allowed.±

Narrow Discovery Allowed Option 7: No Interrogatories or Requests to Admit.  In any arbitration arising out of or related to this Agreement, there shall be no interrogatories or requests to admit.

Narrow Discovery Allowed Option 8. In any arbitration arising out of or related to this Agreement, each side may take three (3)* discovery depositions. Each side’s depositions are to consume no more than a total of fifteen (15)* hours. There are to be no speaking objections at the depositions, except to preserve privilege. The total period for the taking of depositions shall not exceed six (6)* weeks.

Broader Discovery Allowed.

Broader Discovery Allowed Option 1. In addition to the authority conferred on the arbitral tribunal by the above arbitration rules, the arbitral tribunal shall have the authority to order such production of documents [and such depositions of party witnesses] as may be reasonably requested by either party or by the arbitral tribunal itself. No party to this Agreement is permitted to make any application pursuant to 28 U.S.C. § 1782.

Broader Discovery Allowed Option 2. The parties agree that they will disclose, prior to the hearing, the documents that each side will present in support of its case, documents essential to a matter of import in the proceeding for which a party has demonstrated a substantial need, and documents relating to issues in the case that are in the possession of persons who are noticed as witnesses by the party requested to provide disclosure. Disclosure of electronic information shall include (1) disclosure, in reasonably usable form, by each party of electronic information maintained by no more than [specify number] designated custodians; (2) provision only of information created [specify amount of time] prior to the date of the signing of the agreement that is the subject of the dispute and the date of the filing of the request for arbitration; (3) disclosure of information from primary storage facilities only; no information is required to be disclosed from back-up servers or back-up tapes; no disclosure of information from cell phones, PDAs, voicemails, etc.; and (4) no disclosure of information other than reasonably accessible active data. Upon a showing of special need and relevance by the requesting party, electronic disclosure shall include deleted, fragmented or other information difficult to obtain other than through forensic means. The parties agree to meet and confer, prior to an initial scheduling conference with the tribunal, concerning the specific modalities and timetable for electronic information disclosure. No party to this Agreement is permitted to make any application pursuant to 28 U.S.C. § 1782.

Full Discovery Allowed.

Full Discovery Allowed Option 1. The parties shall allow and participate in discovery in accordance with the United States Federal Rules of Civil Procedure. Unresolved discovery disputes shall be submitted to the arbitrator(s).

Full Discovery Allowed Option 2. The parties agree that there shall be pre-hearing disclosure of documents, including electronic information, regarding non-privileged matters that are relevant to any party’s claim or defense, subject to limitations of reasonableness, duplication, and undue burden. The parties agree to meet and confer, prior to an initial scheduling conference with the tribunal, concerning the specific modalities and timetable for electronic information disclosure.

E-Discovery.

E-Discovery Option 1. The arbitrator(s) shall require the parties to disclose active electronic information maintained by only [specified number] custodians, from primary storage facilities (excluding backup facilities and tapes).

E-Discovery Option 2. In any arbitration arising out of or related to this Agreement, There shall be production of electronic documents only from sources used in the ordinary course of business. Absent a showing of compelling need, no such documents are required to be produced from backup servers, tapes or other media.  Absent a showing of compelling need, the production of electronic documents shall normally be made on the basis of generally available technology in a searchable format which is usable by the party receiving the e-documents and convenient and economical for the producing party. Absent a showing of compelling need, the parties need not produce metadata, with the exception of header fields for email correspondence.  The description of custodians from whom electronic documents may be collected shall be narrowly tailored to include only those individuals whose electronic documents may reasonably be expected to contain evidence that is material to the dispute.

Where the costs and burdens of e-discovery are disproportionate to the nature of the dispute or to the amount in controversy, or to the relevance of the materials requested, the arbitrator will either deny such requests or order disclosure on condition that the requesting party advance the reasonable cost of production to the other side, subject to the allocation of costs in the final award. (See JAMS Discovery Protocols; JAMS Arbitration Rule 16.2).

Discovery Abuse Sanctions.

The arbitrator may impose reasonable monetary or other sanctions against a party, or the party’s lawyer, as appropriate, for failing to comply with discovery obligations or engaging in other disruptive or dilatory conduct, whether direct or indirect.

Arbitration Submitted by Documents.

If the Amount in Controversy is less than $________________, there shall be no discovery other than the Mandatory Exchange of information.  Further, the Dispute shall be resolved by submission of argument and evidence through a document submission rather than by an in-person hearing.  The Arbitrator has no discretion to allow an in-person hearing in such matters.

Alternative Arbitration Submitted by Documents. The arbitration will be based on the submission of documents and there shall be no in-person or oral hearing.±

Challenge of Claimed Amount In Controversy.

A party claiming that the Amount in Controversy exceeds $________ must include in its arbitration demand a summary of facts which supports the party’s contentions. Upon challenge by the opposing party, which must be filed within 20 days of the appointment of the Arbitrator(s), the Arbitrator(s) must determine whether the party’s claim that the Amount in Controversy exceeds $_______ is reasonably supportable by the contentions, facts and evidence available.

Dispositive Motions.

Notwithstanding any rule or procedure to the contrary, any party wishing to make a dispositive motion shall first submit a brief letter (not exceeding five pages) explaining why the motion has merit and why it would speed the proceeding and make it more cost-effective. The other side shall have a brief period within which to respond.  Based on the letters, the arbitrator will decide whether to proceed with more comprehensive briefing and argument on the proposed motion.  If the arbitrator decides to go forward with the motion, he/she will place page limits on the briefs and set an accelerated schedule for the disposition of the motion.  Under ordinary circumstances, the pendency of such a motion will not serve to stay any aspect of the arbitration or adjourn any pending deadlines.

Alternative Dispositive Motions Option 1. In any arbitration arising out of or related to this Agreement, Any party wishing to make a dispositive motion shall first submit a brief letter (not exceeding five pages) explaining why the motion has merit and why it would speed the proceeding and make it more cost-effective. The other side shall have a brief period within which to respond.  Based on the letters, the arbitrator will decide whether to proceed with more comprehensive briefing and argument on the proposed motion.  If the arbitrator decides to go forward with the motion, he/she will place page limits on the briefs and set an accelerated schedule for the disposition of the motion.   Under ordinary circumstances, the pendency of such a motion will not serve to stay any aspect of the arbitration or adjourn any pending deadlines. ⸙

Alternative Dispositive Motions Option 2. The parties must not file any motions without first conferring with opposing counsel and obtaining leave from the arbitrator.

My Award of Fees and Costs Clause.

The arbitrator(s) shall award to the Prevailing Party, if any, as determined by the arbitrator(s), all of their Fees and Costs.  “Fees and Costs” shall mean all reasonable pre-award expenses of the arbitration, including mediator and arbitrator fees, administrative fees, travel expenses, out-of-pocket expenses such as copying, witness fees, expert witness fees, electronic research, and attorney fees. “Prevailing Party” shall mean the party which has obtained the greatest “net award” in terms of money or money equivalent. The “net award” is determined by subtracting the smallest award of money or money equivalent from the largest award.  If money or money equivalent has not been awarded, then the Prevailing Party will be that party which has prevailed on a majority of the material issues decided.

Alternative Fees and Costs Option 1. Arbitrators have discretion to allocate both costs and fees: “The arbitral tribunal may include in its award an allocation to any party of such costs and expenses, including attorneys’ fees [and costs and expenses of management, in-house counsel, experts, and witnesses], as the arbitral tribunal shall deem reasonable.‡ 

Alternative Fees and Costs Option 2: Fees and Costs to the Prevailing Party.  The arbitral tribunal may award its costs and expenses, including attorneys’ fees, to the prevailing party, if any, and as determined by the arbitral tribunal in its discretion.

Alternative Fees and Costs Option 3: Allocation of costs and fees in proportion to success. The arbitral tribunal may include in their award an allocation to any party of such costs and expenses, including attorneys’ fees [and costs and expenses of management, in-house counsel, experts, and witnesses], as the arbitral tribunal shall deem reasonable. In making such allocation, the arbitral tribunal shall consider the relative success of the parties on their claims, counterclaims, and defenses.

Alternative Fees and Costs Option 4: Parties split costs equally. All costs and expenses of the arbitral tribunal [and of the arbitral institution] shall be borne by the parties equally. Each party shall bear all costs and expenses (including of its own counsel, experts and witnesses) involved in preparing and presenting its case.

Alternative Fees and Costs Option 5. If the arbitrator(s) determine a party to be the prevailing party under circumstances where the prevailing party won on some but not all of the claims and counterclaims, the arbitrator(s) may award the prevailing party an appropriate percentage of the costs and attorneys’ fees reasonably incurred by the prevailing party in connection with the arbitration.

Alternative Fees and Costs Option 6. If the arbitrator determines that a party has generally prevailed in the arbitration proceeding, then the arbitrator shall award to that party its reasonable out-of-pocket expenses related to the arbitration, including filing fees, arbitrator compensation, attorney’s fees and legal costs.

Alternative Fees and Costs Option 7. Each party shall bear its own costs, fees and expenses of arbitration.

Alternative Fees and Costs Option 8. If the arbitrator determines that a party has generally prevailed in the arbitration proceeding, then the arbitrator may award to that party its reasonable out-of-pocket expenses related to the arbitration, including filing fees, arbitrator compensation, attorney’s fees and legal costs. Discovery. If you want to make sure that you have a certain form of discovery, you can specify that. You will want to be careful, however, that you don’t provide for so much discovery that you sacrifice low cost and efficiency, two of the premier virtues of arbitration.

Alternative Fees and Costs Option 9. Unless the arbitrator orders otherwise, the parties must share arbitration costs equally, including the arbitrator’s fees and expenses. Each party must pay its own expenses and attorneys’ fees. A court reporter’s fees must be paid by the party who retains the reporter.

My Timing and Type of Award Clause.

The arbitrator(s) shall agree to comply with this schedule before accepting appointment.  However, this time limit may be extended by the Arbitrator(s) for good cause shown, or by mutual agreement of the parties.  The Arbitrator(s) will have no authority to award punitive or other damages not measured by the prevailing party’s actual damages, except as may be required by statute.  The award of the Arbitrator(s) shall be accompanied by a reasoned opinion.

Alternative Timing and Type of Award Option 1. The award shall be rendered within […] months of the appointment of [the sole arbitrator] [the chairperson], unless the arbitral tribunal determines that the interest of justice or the complexity of the case requires that such limit be extended.

Alternative Timing and Type of Award Option 2. The arbitrator(s) shall issue a reasoned decision.

Alternative Timing and Type of Award Option 3. The arbitrator(s) shall issue findings of facts and conclusions of law.

Alternative Timing and Type of Award Option 4. The arbitrator(s) shall provide a standard form of Award.

Alternative Timing and Type of Award Option 5. The arbitrator must issue a written, reasoned award within 20 calendar days from the date the hearing is formally closed, or as soon after that as is feasible. The sole remedy will be actual damages; no punitive damages are allowed.

Appeal. If you desire to make the decision subject to appeal, consider amending sections above such that the arbitration is not binding.  Further, consider adding language regarding the proper venue for appeal (court, to a panel of 3 arbitrator, etc.), and the standard on appeal.   

An appeal may be taken under the [procedures] from any final award of an arbitral panel in any arbitration arising out of or related to this Agreement that is conducted in accordance with the requirements of such Appeal Procedure. Unless otherwise agreed by the parties and the appeal tribunal, the appeal shall be conducted at the place of the original arbitration.

Alternative Appeal Option 1. That an appeal may be taken to a separate panel of three JAMS arbitrators (or a single arbitrator if the parties so agree).

That the standard of review will be the “same standard…that the first-level appellate court in the jurisdiction would apply to an appeal from the trial court decision.

That a decision will be rendered within 21 days of oral argument or service of final briefs, which will not exceed 25 double-spaced pages.

In order to incorporate the above-described appeal into an arbitration, one need only provide in the dispute resolution clause of a commercial contract that:

The Parties adopt and agree to implement the JAMS Optional Arbitration Appeal Procedure (as it exists on the effective date of this Agreement) with respect to any final award in an arbitration arising out of or related to this Agreement.

Alternative Appeal Option 2. Notwithstanding any language to the contrary in the contract documents, the parties hereby agree: that the Underlying Award may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (“Appellate Rules”); that the Underlying Award rendered by the arbitrator(s) shall, at a minimum, be a reasoned award; and that the Underlying Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired.  Appeals must be initiated within thirty (30) days of receipt of an Underlying Award, as defined by Rule A-3 of the Appellate Rules, by filing a Notice of Appeal with any AAA office.  Following the appeal process the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof. ±

Confirmation of Award.

The award shall be final and binding on the parties and may be entered and enforced in any court having jurisdiction.

Alternate Confirmation of Award Option 1. Judgment on the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof or having jurisdiction over the relevant party or its assets.

Alternate Confirmation of Award Option 2. The arbitrator’s award may be confirmed, modified, or vacated, and judgment entered, by any state or federal court having subject-matter jurisdiction sitting in the state of [state] [or by any other court having jurisdiction]. The arbitrator’s failure to comply with any deadlines specified in this Agreement is not grounds for invalidating any provision of the Agreement.

My Confidentiality Clause.

Except as may be required by law, neither a party nor any arbitrator or mediator appointed regarding any Dispute may disclose the existence, content, or results of any arbitration or mediation hereunder without the prior written consent of all parties to the Dispute.

Alternate Confidentiality Option 1. The existence and content of the arbitral proceedings and any rulings or award shall be kept confidential except (i) to the extent that disclosure may be required of a party to fulfill a legal duty, protect or pursue a legal right, or enforce or challenge an award in bona fide legal proceedings before a state court or other judicial authority, or (ii) with the written consent of all parties. Notwithstanding anything to the contrary, either party may disclose matters relating to the arbitration or the arbitral proceedings where necessary for the preparation or presentation of a claim or defense in such arbitration.

Alternate Confidentiality Option 2. The parties shall be under no confidentiality obligation with respect to arbitration hereunder except as may be imposed by mandatory provisions of law.

Alternate Confidentiality Option 3. The parties shall maintain the confidential nature of the arbitration proceeding and the Award, including the Hearing, except as may be necessary to prepare for or conduct the arbitration hearing on the merits, or except as may be necessary in connection with a court application for a preliminary remedy, a judicial challenge to an Award or its enforcement, or unless otherwise required by law or judicial decision.

Governing Law.

This Agreement is governed by and must be interpreted in accordance with the laws of the State of Nevada, without reference to conflict of laws principles.

Alternate Governing Law Option 1. This Agreement is governed by, and all disputes arising under, relating to, or in connection with this Agreement shall be resolved in accordance with, the laws of [selected jurisdiction] [to the exclusion of its conflict of laws rules].

Alternate Governing Law Option 2. This Agreement and the rights of the parties hereunder shall be governed by and construed in accordance with the laws of the State of _______, exclusive of conflict or choice of law rules.

Federal Arbitration Act.

The U.S. Supreme Court in Volt Information Sciences, Inc. v. Board of Trustees of the Leland Stanford Junior University, 489 U.S. 468 (1989), held that the FAA did not pre-empt the California Arbitration Action in an act governed by California law regarding an interstate dispute.  Therefore, if the parties desire that the FAA applies regardless of their state arbitration act, the following clause should be added.

Federal Arbitration Act Option 1.  The parties acknowledge that this Agreement evidences a transaction involving interstate commerce, and that any arbitration conducted under this Agreement will be governed by the Federal Arbitration Act (9 U.S.C., Secs. 1-16). The parties intend and agree that any state laws attempting to prohibit arbitration or void out-of-state forums for arbitration are preempted by the Federal Arbitration Act, and that arbitration must be conducted as provided in this Section ____.

Federal Arbitration Act Option 2. The parties acknowledge that this Agreement evidences a transaction involving interstate commerce. Notwithstanding the provision in the preceding paragraph with respect to applicable substantive law, any arbitration conducted pursuant to the terms of this Agreement shall be governed by the Federal Arbitration Act (9 U.S.C., Secs. 1-16).

Waiver of Right to Bring Class, Group, or Collective Action.

Arbitration or litigation of any Dispute must proceed solely on an individual basis. The parties expressly and irrevocably waive the right for any Dispute to be arbitrated or litigated on a class action basis, or on bases involving Disputes arbitrated or litigated in a purported representative capacity on behalf of others. The authority of a court or arbitrators to resolve Disputes and make written awards or judgments is limited to Disputes between you and us alone. Disputes may not be joined or consolidated with any other Dispute(s) unless agreed to in writing by all parties. No arbitration award or court decision will have any preclusive effect as to issues or claims in any Dispute with any person or entity not a named party to the arbitration. No previous course of dealing will be admissible to explain, modify, or contradict the terms of this agreement.

Your Initials:________                      Our Initials:__________

Waiver of Right to Jury Trial.

Each party hereby irrevocably waives its rights to trial by jury regarding any Dispute or proceeding arising out of this agreement or the transactions relating to its subject matter.

Your Initials:________                      Our Initials:__________

My Waiver of Claim for Punitive Damages Clause.

To the extent permitted by applicable law, neither of the parties may assert, and each party waives, any claim against the other party (including their respective Affiliates, partners, stockholders, members, officers, directors, agents, employees and controlling persons), on any theory of liability for special, indirect, consequential, or punitive damages (as opposed to direct or actual damages) for any Dispute. The parties further agree that in the event of a Dispute, each of the parties will be limited to the recovery of any: (a) actual damages sustained by it; (b) liquidated damages as provided for herein; any (c) any statutory damages. If such claims for punitive damages cannot be waived by law, then the parties agree that any recovery will not exceed two (2) times actual damages.

Your Initials:________                      Our Initials:__________

Alternative Waiver of Punitive Damages Option 1. The parties expressly waive and forego any right to punitive, exemplary, or similar damages as result of any dispute, controversy, or claim relating to, connected with, or arising out of this Agreement, or the breach, existence, validity, or termination thereof.

Alternative Waiver of Punitive Damages Option 2. In any arbitration arising out of or related to this Agreement, the arbitrator(s) are not empowered to award punitive or exemplary damages, except where permitted by statute, and the parties waive any right to recover any such damages.

Alternative Waiver of Punitive Damages Option 3. The arbitrator is not authorized to award punitive or other damages not measured by the prevailing party’s actual damages Awards of costs and fees. You can require such an award, forbid it, or leave it to the discretion of the arbitrator(s).

Limitation of Damages.

The arbitrator(s) shall have no authority to directly or indirectly award any form of consequential damages, as such damages have been waived by the parties to this Agreement. Such prohibited damages include lost profits; any form of overhead not directly incurred at the project site, such as home office overhead; wage or salary increases; ripple or delay damages; loss of productivity; increased cost of funds for the project; extended capital costs; lost opportunity to work on other projects; inflation costs of labor, material, or equipment; nonavailability of labor, material or equipment due to delays; increased costs of bonding due to delay; or any other indirect losses arising from the conduct of the parties to this Agreement.

Alternative Limitation of Damages Option 1. The arbitrator(s) shall not be empowered to award any damages as lost rent or revenue; rental payments for temporary offices; increased costs of administration or supervision; costs or delays suffered by others unable to commence work or services as previously scheduled, for which a party to this contract may be liable; increased costs of borrowing funds devoted to the project; delays in selling all or part of the project upon completion; termination of agreements to lease or buy all or part of the project, whether or not suffered before completion of services or work; forfeited bonds, deposits, or other monetary costs or penalties due to delay of the project; lost tax credits or deductions due to delay of the project; lost tax credits or deductions due to delay; impairment of security; or any other indirect loss arising from the conduct of the parties to this Agreement.

Alternative Limitation of Damages Option 2. In any arbitration arising out of or related to this Agreement, the arbitrator(s) may not award any incidental, indirect or consequential damages, including damages for lost profits.

See Our Disclaimer Regarding the Use of Information in this Article

[1] indicates that this sample clause was taken from Drafting Arbitration Clauses, Thomas N. Peiper (ABA –NYSBA International Practice Boot Camp 2014).
± indicates an American Arbitration Association standard clause.
indicates a Centre for Effective Dispute Resolution standard clause.
indicates a JAMS standard clause.
indicates that this sample clause was taken from Sample Arbitration Clauses with Comments, David Allgeyer http://www.acc.com/_cs_upload/vl/membersonly/SampleFormPolicy/409703_1.pdf.
indicates this sample clause was taken from Standard Arbitration Clauses for the AAA, ICDR and ICC, Lea Haber Kuck, Julie Bedard, https://files.skadden.com/sites%2Fdefault%2Ffiles%2Fpublications%2FPublications2153_0.pdf.
indicates this sample clause was taken from Sample Arbitration Clause, Cary Cooper, http://centerforplainlanguage.org/wp-content/uploads/2012/05/Cooper-and-Kowalski_Sample-Arbitration-Clause.pdf

About the Author

Jay Young is a Las Vegas, Nevada attorney. His practice focuses on business law, business litigation, and acting as an Arbitrator and Mediator.

Mr. Young can be reached at 702.667.4868 or at jay@h2law.com.