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Arbitration Agreements

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In Arbitrability

USA: Tenth Circuit Finds Arbitration Prohibitively Expensive

by 3 Mins Read

In Nesbitt v. FCNH, Inc., No. 14-1502 (10th Cir. Jan. 5, 2016), the Tenth Circuit upheld the denial of a motion to compel arbitration, finding arbitration prohibitively expensive for Plaintiff under the terms of the arbitration agreement. Plaintiff, a student at a for-profit academic institution offering massage therapy courses, brought a putative class action against the institution under the Fair Labor Standards Act (“FLSA”) and state laws for requiring massage therapy students to perform massages on…

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In Arbitrability

USA: Third Circuit Holds Class Arbitrability is for the Courts

by 5 Mins Read

In its decision in Chesapeake Appalachia, LLC v. Scout Petroleum, LLC, 809 F. 3d 746 (3d Cir. 2016), the Third Circuit held that general reference to arbitration under AAA rules does not constitute clear and unmistakable evidence that the parties delegated the question of class arbitrability to the arbitrators. Chesapeake Appalachia, LLC (“Chesapeake”) entered into various oil and gas leases with landowners in several Pennsylvania counties in 2008. Scout Petroleum, LLC and Scout II, LP…

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In Arbitrability

USA: District Court Compels Arbitration of Arbitrability Based on Vilnius Arbitration Rules

by 5 Mins Read

Terra Holding GmbH and Terra Handels-und Speditionsgesellschaft mbH v. Unitrans International, Inc., No. 14-cv-1788 (E.D. Va. Aug. 19, 2015), the District Court for the Eastern District of Virginia compelled arbitration of the question of arbitrability where the arbitration agreement incorporated Vilnius Court of Commercial Arbitration rules that delegated that decision to the arbitrators. Plaintiffs, Terra Holding GmbH and Terra Handels-und Speditionsgesellschaft mbH (both German entities), sued Defendant, Unitrans International, Inc. (a U.S. corporation), for, inter…

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In Arbitration Agreements

Intended and Unintended Use of Option Clauses in Arbitration: Common Pitfalls and Drafting Tips

by , , , and 7 Mins Read

Parties who choose arbitration as an exclusive dispute resolution mechanism for their contracts usually agree that their disputes “shall” be referred to arbitration. In certain circumstances, however, parties intentionally agree on arbitration as a default dispute resolution mechanism with an option to litigate a dispute, or vice versa. The option can either be held by both parties (bilateral option clauses) or, more commonly, by one party only (unilateral option clauses). In either case, it is…

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