Parties to commercial and business disputes frequently encounter and litigate the threshold question whether their dispute must be arbitrated rather than litigated in court. But, before this question can be answered, there is an even more fundamental question that must be resolved: who decides whether a dispute is subject to arbitration – the court or the arbitrator? Courts have struggled with this question for years and continue to do so today. Generally, whether a claim is

Investing in the stock market can be challenging. Understanding investment vehicles like stocks, bonds, limited partnerships, annuities, hedge funds, derivatives and mutual funds can be overwhelming for investors. For that reason, many investors rely on stockbrokers and financial advisors to provide suitable investment advice to protect their hard-earned money. While most brokers and financial advisors act in their customer’s best interest, some do not. When that happens,

It has long been the policy in New York to favor and encourage arbitration as a means of expediting the resolution of disputes and conserving judicial resources. Rio Algom Inc. v. Sammi Steel Co., Ltd. , 168 A.D.2d 250, 251 (1st Dept. 1990). For this reason, when parties have chosen arbitration as their forum for dispute resolution, they are precluded “from using the courts as a vehicle to protract litigation.” Matter of Weinrott (Carp) , 32 N.Y.2d 190, 199 (1973). Notwithst

Under Section 10 of the Federal Arbitration Act (“FAA”), a party can vacate or modify an arbitral award under four narrow circumstances: “(1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption…; (3) where the arbitrators were guilty of misconduct … or of any other misbehavior by which the rights of any party have been prejudiced; or (4) where the arbitrators exceeded their powers ….” 9 U.S.C. §10(a). These

By: Jeffrey M. Haber Is it a breach of contract to bypass an agreed-upon, independent alternative dispute resolution (“ADR”) process and commence an arbitration proceeding elsewhere? When two companies enter into a contract, it’s common to include language wherein both parties consent to having any disputes related to the contract decided by an agreed-upon, neutral third party, rather than by a judge in a lengthy, formal court proceeding. The process of ADR-- which may be by

Do mandatory arbitration clauses prevent class action lawsuits? The Consumer Financial Protection Bureau recently proposed a rule that would scale back mandatory arbitration clauses used by banks and other financial firms to limit their exposure to legal liabilities. While the new rule continues to allow arbitration in cases pursued by individual consumers, class actions would no longer be prevented. “Many banks and financial companies avoid accountability by putting arbitra