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Friday, September 26, 2014

When Can Courts Substitute Arbitration Organizations?



The Abstract:      

Section Five of the Federal Arbitration Act (“FAA”) allows courts to appoint a replacement arbitration forum when the designated arbitration forum is unavailable. However, it is unclear how far the power to replace extends, with the Seventh Circuit in 2013 deepening a current circuit split involving the Section Five replacement power. The Third, Fifth, and Eleventh Circuits recognize the integral part rule, which does not allow a court to appoint a replacement arbitration forum if the designation of the forum in the contract is considered integral. The Seventh Circuit is the lone circuit that has rejected the integral part rule in its entirety, and allows the appointment of a replacement arbitration forum no matter the contract. Furthermore, of the circuits that recognize the integral part rule, only the Fifth Circuit has applied the rule in a way that recognizes an arbitration forum designation as integral. This Note recommends that the Supreme Court adopt the integral part rule, and the application of the rule that finds arbitration forum designations integral to a contract. Such action by the Supreme Court would be justified by traditional contract principles and the congressional intent of the FAA.

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