In July, a federal court in North Carolina held that an arbitration provision which required the arbitration panel to reach a decision within thirty days of their selection was not unconscionable. Arising out of a dispute regarding a construction contract, the court said that the defendant’s argument failed to consider the thirty day limitation in the full context of the arbitration provision. While acknowledging that “allowing an arbitration panel only 30 days to sort out the liability for the post-construction, partial collapse of two parking garages would be a Herculean feat, if not utterly impossible,” the court noted that “during any significant construction project, billing claims and disputes often arise which require immediate attention and resolution lest the project grind to a halt.” Thus, the court pointed to the panel’s power to extend the date for final disposition under the Commercial Arbitration Rules of the AAA, to find that the thirty day limitation was not unconscionable.
In late September, the same court compelled a second lawsuit between the parties to arbitration, over the objection of a defendant that the thirty day limitation was absolute and jurisdictional, depriving the panel of continued jurisdiction over the first lawsuit. The court held that such a challenge would constitute an argument that the panel “exceeded its powers,” which was not ripe nor before the court at the time.
Tribal Casino Gaming Enter. v. W.G. Yates & Sons Const. Co., Case No. 1:16-cv-00030-MR (W.D.N.C. July 1, 2016) and Case No. 1:16-cv-00132-MR (W.D.N.C. Sept. 26, 2016).
This post written by Zach Ludens.
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