When No Written Contract Exists Who Chooses an Arbitrator to Resolve Disputes
When No Written Contract Exists: Who Chooses an Arbitrator to Resolve Disputes
Arbitration is a form of dispute resolution that has become increasingly popular in the business world. It is a private and less formal alternative to traditional litigation where parties can resolve their disputes without going to court. But what happens when no written contract exists, and parties have not agreed on who will choose the arbitrator?
In the absence of a written agreement, the first step is to look to any oral agreements or conversations the parties may have had regarding their intent to arbitrate disputes. If there is no clear agreement, then the default rules of the arbitration provider or state law will apply.
Most arbitration providers, such as the American Arbitration Association (AAA) and JAMS, have their own rules that address the selection of arbitrators. If the parties have not agreed on a method for selecting an arbitrator, the provider`s rules will typically govern. For example, AAA`s Commercial Arbitration Rules state that if the parties cannot agree on an arbitrator, the AAA will appoint one.
If the parties have not selected an arbitration provider, and state law governs the arbitration, the laws of the state where the arbitration is taking place will dictate the process for selecting an arbitrator. In some states, the courts will have jurisdiction over selecting an arbitrator. In other states, the arbitration provider`s default rules may apply.
It is important to note that if the parties have not agreed on a method for selecting an arbitrator, they may still have the ability to object to an arbitrator selected by an arbitration provider or court. This can occur if a party believes the arbitrator has a conflict of interest, bias, or is not qualified to hear the dispute.
In conclusion, while it is always best to have a written agreement that clearly outlines the process for selecting an arbitrator, there are still options available when no written contract or agreement exists. It is important to understand the applicable rules and laws governing the selection of arbitrators and to work with experienced legal counsel to navigate the arbitration process.