Federal Court Upholds Contractual Language To Arbitrate In 30 Days

Aug 24, 2016

Courts almost never overturn arbitration agreements.

Courts, for many years, have confirmed the sanctity of arbitration agreements.

This was confirmed, once again, in a recent North Carolina case, Tribal Casino Gaming Enterprise v. W.G. Yates & Sons Construction Company et al, Civil Case No. 1:16-cv-0030-MR-DHL, U.S. Dist. Ct., W.D. North Carolina, Asheville Division, July 1, 2016.

An article in The Dispute Resolver, by Brendon Carter, discusses this case.

The Plaintiff, Tribal Casino Gaming, hired W.G. Yates & Sons Construction to build a hotel parking garage at the casino. After completion of the project, “in February of 2015, a ramp located in the hotel parking garage partially collapsed and the plaintiffs filed suit in February 2016 for damages related to breach of contract, breach of warranty, negligence, gross negligence, and unfair and deceptive trade practices.”

The Plaintiff requested an arbitration proceeding, pursuant to the “Commercial Arbitration Rules of the American Arbitration Association, as stipulated in the construction contract.

In May 2016 the plaintiffs chose an arbitrator. “This gave the defendants [according to the terms of the construction contract’s arbitration provision] fifteen days to designate its arbitrator, and then gave those arbitrators fifteen days to select the third member of the panel, with a final decision having to be rendered thirty days later.”

The Defendants filed a motion arguing that the time period stipulated for the proceeding was unreasonable and did not give them time to adequately prepare their defense and did not give the arbitration panel sufficient time to examine all the facts and make a reasoned decision.

(After a preliminary examination the language of the arbitration provision in the construction contract, the Court ruled it did have jurisdiction to rule on this issue.)

The Court, as Mr. Carter points out, agreed “with the defendant that allowing an arbitration panel thirty days to review and assess liability for a partial–collapse of a parking garage years after the project was completed ‘would be a Herculean feat, if not utterly impossible.’”

In spite of this finding, the Court ruled that the arbitration language agreed to by the parties was enforceable.

Contractors often view arbitration provisions as boilerplate that requires little or no attention during contract negotiations. This case demonstrates that the exact wording of arbitration provision is of paramount importance.

Source—

Is 30 Days Enough Time to Fully Arbitrate and Issue an Award for a Claim on a Partial Parking Garage Collapse? Federal Court Says Let the Arbitrator Decide, Brendan Carter, The Dispute Resolver, August 12, 2016.