December 13, 2000

The Committee that acted for the National Conference of Commissioners on Uniform State Laws in preparing the Revised Uniform Arbitration Act is as follows:

FRANCIS J. PAVETTI, 83 Huntington Street, New London, CT 06320, Chair

FRANCISCO L. ACEVEDO, P.O. Box 190998, 16th Floor, Banco Popular Center, Hato Rey, PR 00919

RICHARD T. CASSIDY, 100 Main Street, P.O. Box 1124, Burlington, VT 05402

M. MICHAEL CRAMER, 216 N. Adams Street, Rockville, MD 20850

BARRY C. HAWKINS, One Landmark Square, 17th Floor, Stamford, CT 06901

TIMOTHY J. HEINSZ, University of Missouri-Columbia, School of Law, 203 Hulston Hall, Columbia,

MO 65211, National Conference Reporter

ROGER C. HENDERSON, University of Arizona, James E. Rogers College of Law, Mountain and

Speedway Streets, Tucson, AZ 85721, Committee on Style Liaison

JEREMIAH MARSH, Suite 4300, Three First National Plaza, Chicago, IL 60602

RODNEY W. SATTERWHITE, P.O. Box 1540, Midland, TX 79702

JAMES A. WYNN, JR., Court of Appeals, One W. Morgan Street, P.O. Box 888, Raleigh, NC 27602

JOAN ZELDON, Superior Court, 500 Indiana Avenue, N.W., Room 1640, Washington, DC 20001

JOHN L. McCLAUGHERTY, P.O. Box 553, Charleston, WV 25322, President

STANLEY M. FISHER, 1100 Huntington Building, 925 Euclid Avenue, Cleveland, OH 44115-1475,

Division Chair

RICHARD CHERNICK, 3055 Wilshire Boulevard, 7th Floor, Los Angeles, CA 90010-1108, Co-Advisor

JAMES L. KNOLL, 1500 S.W. Taylor Street, Portland, OR 97205, Tort and Insurance Practice Section

Advisor

JOHN K. NOTZ, JR., 3300 Quaker Tower, 321 N. Clark Street, Chicago, IL 60610-4795, Senior Lawyers

Division Advisor

YARKO SOCHYNSKY, 350 The Embarcadero, 6th Floor, San Francisco, CA 94105-1250, Real

Property, Probate and Trust Law Section Advisor

RONALD M. STURTZ, 27 Badger Drive, Livingston, NJ 07039, Co-Advisor

MAX ZIMNY, Floor 3, 1710 Broadway, New York, NY 10019-5254, Labor and Employment Law Section

Advisor

FRED H. MILLER, University of Oklahoma, College of Law, 300 Timberdell Road, Norman, OK 73019,

Executive Director

WILLIAM J. PIERCE, 1505 Roxbury Road, Ann Arbor, MI 48104, Executive Director Emeritus

SECTION 1. DEFINITIONS 8

SECTION 2. NOTICE 9

SECTION 3. WHEN [ACT] APPLIES 11

SECTION 4. EFFECT OF AGREEMENT TO ARBITRATE; NONWAIVABLE PROVISIONS 13

SECTION 5. [APPLICATION] FOR JUDICIAL RELIEF 17

SECTION 6. VALIDITY OF AGREEMENT TO ARBITRATE 18

SECTION 7. [MOTION] TO COMPEL OR STAY ARBITRATION 26

SECTION 8. PROVISIONAL REMEDIES 27

SECTION 9. INITIATION OF ARBITRATION 32

SECTION 10. CONSOLIDATION OF SEPARATE ARBITRATION PROCEEDINGS 35

SECTION 11. APPOINTMENT OF ARBITRATOR; SERVICE AS A NEUTRAL ARBITRATOR 40

SECTION 12. DISCLOSURE BY ARBITRATOR 41

SECTION 13. ACTION BY MAJORITY 49

SECTION 14. IMMUNITY OF ARBITRATOR; COMPETENCY TO TESTIFY; ATTORNEY'S

FEES AND COSTS 49

SECTION 15. ARBITRATION PROCESS 54

SECTION 16. REPRESENTATION BY LAWYER 57

SECTION 17. WITNESSES; SUBPOENAS; DEPOSITIONS; DISCOVERY 58

SECTION 18. JUDICIAL ENFORCEMENT OF PREAWARD RULING BY ARBITRATOR 64

SECTION 19. AWARD 67

SECTION 20. CHANGE OF AWARD BY ARBITRATOR 68

SECTION 21. REMEDIES; FEES AND EXPENSES OF ARBITRATION PROCEEDING 70

SECTION 22. CONFIRMATION OF AWARD 74

SECTION 23. VACATING AWARD 75

SECTION 24. MODIFICATION OR CORRECTION OF AWARD 87

SECTION 25. JUDGMENT ON AWARD; ATTORNEY'S FEES AND LITIGATION EXPENSES 88

SECTION 26. JURISDICTION 90

SECTION 27. VENUE 91

SECTION 28. APPEALS 92

SECTION 29. UNIFORMITY OF APPLICATION AND CONSTRUCTION 92

SECTION 30. RELATIONSHIP TO ELECTRONIC SIGNATURES IN GLOBAL AND

NATIONAL COMMERCE ACT 93

SECTION 31. EFFECTIVE DATE 93

SECTION 32. REPEAL 93

SECTION 33. SAVINGS CLAUSE 94

The Uniform Arbitration Act (UAA), promulgated in 1955, has been one of the most successful Acts of the National Conference of Commissioners on Uniform State Laws. Forty-nine jurisdictions have arbitration statutes; 35 of these have adopted the UAA and 14 have adopted substantially similar legislation. A primary purpose of the 1955 Act was to insure the enforceability of agreements to arbitrate in the face of oftentimes hostile state law. That goal has been accomplished. Today arbitration is a primary mechanism favored by courts and parties to resolve disputes in many areas of the law. This growth in arbitration caused the Conference to appoint a Drafting Committee to consider revising the Act in light of the increasing use of arbitration, the greater complexity of many disputes resolved by arbitration, and the developments of the law in this area.

The UAA did not address many issues which arise in modern arbitration cases. The statute provided no guidance as to (1) who decides the arbitrability of a dispute and by what criteria; (2) whether a court or arbitrators may issue provisional remedies; (3) how a party can initiate an arbitration proceeding; (4) whether arbitration proceedings may be consolidated; (5) whether arbitrators are required to disclose facts reasonably likely to affect impartiality; (6) what extent arbitrators or an arbitration organization are immune from civil actions; (7) whether arbitrators or representatives of arbitration organizations may be required to testify in another proceeding; (8) whether arbitrators have the discretion to order discovery, issue protective orders, decide motions for summary dispositions, hold prehearing conferences and otherwise manage the arbitration process; (9) when a court may enforce a preaward ruling by an arbitrator; (10) what remedies an arbitrator may award, especially in regard to attorney's fees, punitive damages or other exemplary relief; (11) when a court can award attorney's fees and costs to arbitrators and arbitration organizations; (12) when a court can award attorney's fees and costs to a prevailing party in an appeal of an arbitrator's award; and (13) which sections of the UAA would not be waivable, an important matter to insure fundamental fairness to the parties will be preserved, particularly in those instances where one party may have significantly less bargaining power than another; and (14) the use of electronic information and other modern means of technology in the arbitration process. The Revised Uniform Arbitration Act (RUAA) examines all of these issues and provides state legislatures with a more up-to-date statute to resolve disputes through arbitration.

There are a number of principles that the Drafting Committee agreed upon at the outset of its consideration of a revision to the UAA. First, arbitration is a consensual process in which autonomy of the parties who enter into arbitration agreements should be given primary consideration, so long as their agreements conform to notions of fundamental fairness. This approach provides parties with the opportunity in most instances to shape the arbitration process to their own particular needs. In most instances the RUAA provides a default mechanism if the parties do not have a specific agreement on a particular issue. Second, the underlying reason many parties choose arbitration is the relative speed, lower cost, and greater efficiency of the process. The law should take these factors, where applicable, into account. For example, Section 10 allows consolidation of issues involving multiple parties. Such a provision can be of special importance in adhesion situations where there are numerous persons with essentially the same claims against a party to the arbitration agreement. Finally, in most cases parties intend the decisions of arbitrators to be final with minimal court involvement unless there is clear unfairness or a denial of justice. This contractual nature of arbitration means that the provision to vacate awards in Section 23 is limited. This is so even where an arbitrator may award attorney's fees, punitive damages or other exemplary relief under Section 21. Section 14 insulates arbitrators from unwarranted litigation to insure their independence by providing them with immunity.

Other new provisions are intended to reflect developments in arbitration law and to insure that the process is a fair one. Section 12 requires arbitrators to make important disclosures to the parties. Section 8 allows courts to grant provisional remedies in certain circumstances to protect the integrity of the arbitration process. Section 17 includes limited rights to discovery while recognizing the importance of expeditious arbitration proceedings.

In light of a number of decisions by the United States Supreme Court concerning the Federal Arbitration Act (FAA), any revision of the UAA must take into account the doctrine of preemption. The rule of preemption, whereby FAA standards and the emphatically pro-arbitration perspective of the FAA control, applies in both the federal courts and the state courts. To date, the preemption-related opinions of the Supreme Court have centered in large part on the two key issues that arise at the front end of the arbitration process - enforcement of the agreement to arbitrate and issues of substantive arbitrability. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 35 (1967); Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983); Southland Corp. v. Keating, 465 U.S. 2 (1984); Perry v. Thomas, 482 U.S. 483 (1987); Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265 (1995); Doctor's Assocs. v. Cassarotto, 517 U.S. 681 (1996). That body of case law establishes that state law of any ilk, including adaptations of the RUAA, mooting or limiting contractual agreements to arbitrate must yield to the pro-arbitration public policy voiced in Sections 2, 3, and 4 of the FAA.

The other issues to which the FAA speaks definitively lie at the back end of the arbitration process. The standards and procedure for vacatur, confirmation and modification of arbitration awards are the subject of Sections 9, 10, 11, and 12 of the FAA. In contrast to the "front end" issues of enforceability and substantive arbitrability, there is no definitive Supreme Court case law speaking to the preemptive effect, if any, of the FAA with regard to these "back end" issues. This dimension of FAA preemption of state arbitration law is further complicated by the strong majority view among the United States Circuit Courts of Appeals that the Section 10(a) standards are not the exclusive grounds for vacatur.

Nevertheless, the Supreme Court's unequivocal stand to date as to the preemptive effect of the FAA provides strong reason to believe that a similar result will obtain with regard to Section 10(a) grounds for vacatur. If it does, and if the Supreme Court eventually determines that the Section 10(a) standards are the sole grounds for vacatur of commercial arbitration awards, FAA preemption of conflicting state law with regard to the "back end" issues of vacatur (and confirmation and modification) would be certain. If the Court takes the opposite tack and holds that the Section 10(a) grounds are not the exclusive criteria for vacatur, the preemptive effect of Section 10(a) would most likely be limited to the rule that state arbitration acts cannot eliminate, limit or modify any of the four grounds of party and arbitrator misconduct set out in Section 10(a). Any definitive federal "common law," pertaining to the nonstatutory grounds for vacatur other than those set out in Section 10(a), articulated by the Supreme Court or established as a clear majority rule by the United States Courts of Appeals, likely would preempt contrary state law. A holding by the Supreme Court that the Section 10(a) grounds are not exclusive would also free the States to codify other grounds for vacatur beyond those set out in Section 10(a). These various, currently nonstatutory grounds for vacatur are discussed at length in the Section C to the Comment to Section 23.

An important caveat to the general rule of FAA preemption is found in Volt Information Sciences, Inc. v. Stanford Univiversity, 489 U.S. 468 (1989) and Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995). The focus in these cases is on the effect of FAA preemption on choice-of-law provisions routinely included in commercial contracts. Volt and Mastrobuono establish that a clearly expressed contractual agreement by the parties to an arbitration contract to conduct their arbitration under state law rules effectively trumps the preemptive effect of the FAA. If the parties elect to govern their contractual arbitration mechanism by the law of a particular State and thereby limit the issues that they will arbitrate or the procedures under which the arbitration will be conducted, their bargain will be honored - as long as the state law principles invoked by the choice-of-law provision do not conflict with the FAA's prime directive that agreements to arbitrate be enforced. See, e.g., ASW Allstate Painting & Constr. Co. v. Lexington Ins. Co., 188 F.3d 307 (5th Cir. 1999); Russ Berrie & Co. v. Gantt, 988 S.W.2d 713 (Tex. Ct. App. 1999). It is in these situations that the RUAA will have most impact. Section 4(a) of the RUAA also explicitly provides that the parties to an arbitration agreement may waive or vary the terms of the Act to the extent otherwise permitted by law. Thus, when parties choose to contractually specify the procedures to be followed under their arbitration agreement, the RUAA contemplates that the contractually-established procedures will control over contrary state law, except with regard to issues designated as "nonwaivable" in Section 4(b) and (c) of the RUAA.

The contractual election to proceed under state law instead of the FAA will be honored presuming that the state law is not antithetical to the pro-arbitration public policy of the FAA. Southland and Terminix leave no doubt that anti-arbitration state law provisions will be struck down because preempted by the federal arbitration statute.

Besides arbitration contracts where the parties choose to be governed by state law, there are other areas of arbitration law where the FAA does not preempt state law, in the absence of definitive federal law set out in the FAA or determined by the federal courts. First, the Supreme Court has made clear its belief that ascertaining when a particular contractual agreement to arbitrate is enforceable is a matter to be decided under the general contract law principles of each State. The sole limitation on state law in that regard is the Court's assertion that the enforceability of arbitration agreements must be determined by the same standards as are used for all other contracts. Terminix, 513 U.S. at 281 (1995) (quoting Volt, 489 U.S. at 474 (1989)) and quoted in Cassarotto, 517 U.S. 681, 685 (1996); and Cassarotto, 517 U.S. at 688 (quoting Scherk v. Alberto-Culver Co., 417 U.S. 506, 511 (1974)). Arbitration agreements may not be invalidated under state laws applicable only to arbitration provisions. Id. The FAA will preempt state law that does not place arbitration agreements on an "equal footing" with other contracts.

During the course of its deliberations the Drafting Committee considered at length another issue with strong preemption undertones - the question of whether the RUAA should explicitly sanction contractual provisions for "opt-in" review of challenged arbitration awards beyond that presently contemplated by the FAA and current state arbitration acts. "Opt-in" provisions of two types are in limited use today. The first variant permits a party who is dissatisfied with the arbitral result to petition directly to a designated state court and stipulates that the court may vacate challenged awards, typically for errors of law or fact. The second type of "opt-in" contractual provision establishes an appellate arbitral mechanism to which challenged arbitration awards can be submitted for review, again most typically for errors of law or fact.

As explained in detail in Section B of the Comment to Section 23, there were a number of reasons that resulted in the decision not to include statutory sanction of the "opt-in" device for expanded judicial review in the RUAA: (1) the current uncertainty as to the legality of a state statutory sanction of the "opt-in" device, (2) the "disconnect" between the Act's purpose of fostering the use of arbitration as a final and binding alternative to traditional litigation in a court of law, and (3) the inclusion of a statutory provision that would permit the parties to contractually render arbitration decidedly non-final and non-binding. Simply stated, the potential gain to be realized by codifying a right to opt-into expanded judicial review that has not yet been definitively confirmed to exist does not outweigh the potential threat that adoption of an opt-in statutory provision would create for the integrity and viability of the RUAA as a template for state arbitration acts.

Unlike the "opt-in" judicial review mechanism, there are few, if any, legal concerns raised by statutory sanction of "opt-in" provisions for appellate arbitral review. Nevertheless, as explained in the Section B of the Comments to Section 23, because the current, contract-based view of arbitration establishes that the parties are free to design the inner workings of their arbitration procedures in any manner they see fit, the Drafting Committee determined that codification of that right in the RUAA would add nothing of substance to the existing law of arbitration.

The decision not to statutorily sanction either form of the "opt-in" device in the RUAA leaves the issue of the legal propriety of this means for securing review of awards to the developing case law under the FAA and state arbitration statutes. Parties remain free, within the constraints imposed by the existing and developing law, to agree to contractual provisions for arbitral or judicial review of challenged awards.

It is likely that matters not addressed in the FAA are also open to regulation by the States. State law provisions regulating purely procedural dimensions of the arbitration process (e.g., discovery [RUAA Section 17], consolidation of claims [RUAA Section 10], and arbitrator immunity [RUAA Section 14]) likely will not be subject to preemption. Less certain is the effect of FAA preemption with regard to substantive issues like the authority of arbitrators to award punitive damages (RUAA Section 21) and the standards for arbitrator disclosure of potential conflicts of interest (RUAA Section 12) that have a significant impact on the integrity and/or the adequacy of the arbitration process. These "borderline" issues are not purely procedural in nature but unlike the "front end" and "back end" issues they do not go to the essence of the agreement to arbitrate or effectuation of the arbitral result. Although there is no concrete guidance in the case law, preemption of state law dealing with such matters seems unlikely as long as it cannot be characterized as anti-arbitration or as intended to limit the enforceability or viability of agreements to arbitrate.

The subject of international arbitration is not specifically addressed in the RUAA. Twelve States have passed arbitration statutes directed to international arbitration. Seven States have based their statutes on the Model Arbitration Law proposed in 1985 by the United Nations Commission on International Trade Law (UNCITRAL). Other States have approached international arbitration in a variety of ways, such as adopting parts of the UNCITRAL Model Law together with provisions taken directly from the 1958 United Nations Convention on Recognition and Enforcement of Foreign Arbitral Awards (commonly referred to as the New York Convention) or by devising their own international arbitration provisions.

Any provisions of these state international arbitration statutes that are inconsistent with the New York Convention, to which the United States adhered in 1970 (terms of the New York Convention can be found at 9 U.S.C. § 201), or with the federal legislation in Chapter 2 of Title 9 of the United States Code are preempted. Chapter 2 creates federal-question jurisdiction in the federal district courts for any case "falling under the [New York] Convention" and permits removal of any such case from a state court to the federal court "at any time prior to trial." 9 U.S.C. §§ 203, 205. The statute covers any commercial agreement to arbitrate and the resultant arbitration award unless the matter involves only American citizens and has no reasonable relationship to any foreign country and the courts have broadly applied the statute. Therefore, it is unlikely that state arbitration law will have major application to an international case. There are two instances where state arbitration law might apply in the international context: (1) where the parties designate a specific state arbitration law to govern the international arbitration and (2) where all parties to an arbitration proceeding involving an international transaction decide to proceed on a matter in state court and do not exercise their rights of removal under Chapter 2 of Title 9 and the relevant provision of state arbitration law is not preempted by federal arbitration law or the New York Convention. In these relatively rare cases, the state courts will refer to the RUAA unless the State has enacted a special international arbitration law.

Because few international cases are likely to be dealt with in state courts and because of the diversity of state law already enacted for international cases, the Drafting Committee decided not to address international arbitration as a specific subject in the revision of the UAA; however, the Committee utilized provisions of the UNCITRAL Model Law, the New York Convention, and the 1996 English Arbitration Act as sources of statutory language for the RUAA.

The members of the Drafting Committee to revise the Uniform Arbitration Act wish to acknowledge our deep indebtedness and appreciation to Professor Stephen Hayford and Professor Thomas Stipanowich who devoted extensive amounts of time by providing invaluable advice throughout the entire drafting process.

SECTION 1. DEFINITIONS. In this [Act]:

(1) "Arbitration organization" means an association, agency, board, commission, or other entity that is neutral and initiates, sponsors, or administers an arbitration proceeding or is involved in the appointment of an arbitrator.

(2) "Arbitrator" means an individual appointed to render an award, alone or with others, in a controversy that is subject to an agreement to arbitrate.

(3) "Court" means [a court of competent jurisdiction in this State].

(4) "Knowledge" means actual knowledge.

(5) "Person" means an individual, corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, government; governmental subdivision, agency, or instrumentality; public corporation; or any other legal or commercial entity.

(6) "Record" means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in perceivable form.

1. The term "arbitration organization" is similar to the one used in section 74 of the 1996 English Arbitration Act and describes well the functions of agencies such as the American Arbitration Association (AAA), the CPR, JAMS, the National Arbitration Forum, NASD Regulation, Inc., the American Stock Exchange, the New York Stock Exchange, and the International Chamber of Commerce. Arbitration organizations under their specific administrative rules oversee and administer all aspects of the arbitration process. The important hallmarks of such agencies are that they are neutral and unbiased. See, e.g., Engalla v. Permanente Med. Group, Inc., 15 Cal. 4th 951, 938 P.2d 903, 64 Cal. Rptr. 2d 843 (1997) (stating that defendants' self-administered arbitration program between insurer and customers that did not impartially administer arbitration system and made representations about timeliness of the proceedings contrary to what defendant knew would occur was improper). The term "arbitration organization" is used in Section 12 concerning arbitrator disclosure and Section 14 concerning arbitrator immunity.

2. In defining "arbitrator" in Section 1(2), the term "individual" rather than "person" is used because business entities or organizations do not function as "arbitrators."

3. The definition of "court" is presently found in Section 17 of the UAA. The court must have appropriate subject matter and personal jurisdiction. Different States determine which court in its system has jurisdiction over arbitration matters in the first instance. Most give authority to the court of general jurisdiction.

4. The term "knowledge" is used in Section 2 regarding notice under the RUAA and is referenced in Section 12(a) concerning disclosure. It is based on the definition used in Article 1-201 of the Uniform Commercial Code. "Actual knowledge" as used in this Act is not intended to include imputed or constructive knowledge.

5. Section 1(6) is based on the definition of "record" in Sec. 5-102(a)(14) of the Uniform Commercial Code and in proposed revised Article 2 of the Uniform Commercial Code and is intended to carry forward established policy of the Conference to accommodate the use of electronic evidence in business and governmental transactions. It is not intended to mean that a document must be filed in a governmental office nor is it meant to imply that the term "written" or like phrases in other statutes of an enacting State may not be given equally broad interpretation as the term "record."

SECTION 2. NOTICE.

(a) Except as otherwise provided in this [Act], a person gives notice to another person by taking action that is reasonably necessary to inform the other person in ordinary course, whether or not the other person acquires knowledge of the notice.

(b) A person has notice if the person has knowledge of the notice or has received notice.

(c) A person receives notice when it comes to the person's attention or the notice is delivered at the person's place of residence or place of business, or at another location held out by the person as a place of delivery of such communications.

1. The conditions of giving and receiving notice are based on terminology used in Article 1-201(25) of the Uniform Commercial Code. Section 2 spells out standards for when notice is given and received rather than requiring any particular means of notice. This allows parties to use systems of notice that become technologically feasible and acceptable, such as fax or electronic mail.

2. The concept of giving, having, or receiving notice is in Section 15(b) and (c) concerning parties giving notice of a request for summary disposition and arbitrators giving notice of an arbitration hearing; Section 19(a) regarding an arbitrator or an arbitration organization giving notice of an award and Section 19(b) concerning a party notifying an arbitrator of untimely delivery of an award; Section 20(b) concerning a party's notice of requesting a change in the award by arbitrators; Section 22 concerning a party applying to a court to confirm an award after receiving notice of it; Section 23(b) concerning a party filing a motion to vacate an award; and Section 24(a) concerning a party applying to modify or correct an award after receiving notice of it.

3. "Notice" is also used in Section 9 regarding initiation of an arbitration proceeding; Section 9(a) requires that unless the parties otherwise agree as per Section 4, notice must be given either by certified or registered, return receipt requested and obtained, or by service as authorized by law for the initiation of a civil action. Because of the language in Section 2 "except as otherwise provided by this [Act]," the manner of notice provided in Section 9(a) takes precedence as to notice of initiation of an arbitration proceeding.

SECTION 3. WHEN [ACT] APPLIES.

(a) This [Act] governs an agreement to arbitrate made on or after [the effective date of this [Act]].

(b) This [Act] governs an agreement to arbitrate made before [the effective date of this [Act]] if all the parties to the agreement or to the arbitration proceeding so agree in a record.

(c) On or after [a delayed date], this [Act] governs an agreement to arbitrate whenever made.

1. Section 3 is based upon the effective-date provisions in the Revised Uniform Partnership Act (Section 1206) and 1996 Amendments constituting the Uniform Limited Liability Partnership Act of 1994 (Section 1210). Section 3(b) allows parties who have entered into arbitration agreements under the UAA the option to elect coverage under the RUAA if they do so in a record. Section 3(c) establishes a certain date when all arbitration agreements, whether entered into before or after the effective date of the RUAA, will be governed by the RUAA rather than the UAA.

2. Section 20 of the UAA provided that the law was applicable only to agreements entered into after the effective date of the Act. The Drafting Committee rejected this approach in the RUAA. If it were followed, such a section would cause two sets of rules to develop for arbitration agreements under state arbitration law: one for agreements under the UAA and one for agreements under the RUAA. This is especially troublesome in situations where parties have a continuing relationship that is governed by a contract with an arbitration clause. There would be no mechanism, such as Section 3(b) for these parties to opt into the provisions of the RUAA without rescinding their initial agreement. Section 3(c) also sets a time certain when all arbitration agreements will be governed by the RUAA. The time between when parties may opt into coverage under the RUAA and when parties' agreements must be governed by the RUAA will give parties a reasonable amount of time in which to learn of and adapt their arbitration agreements to the changes made by the RUAA.

3. Section 3 operates in conjunction with Section 31, the effective date of the Act; Section 32, that repeals the UAA or present arbitration statute in a State as of the delayed date which is the same delayed date as in Section 3(c), and Section 33, a savings clause that preserves actions or proceedings accruing before the RUAA takes effect and provides that, subject to Section 3, an arbitration agreement made prior to the effective date of the RUAA is governed by the UAA.

The approach taken in Sections 3, 31, 32, and 33 may cause a problem in some States that do not allow one statute, the RUAA, to amend another statute, the UAA. Some States may have to amend its current UAA so that it will not apply to arbitration agreements made after the effective date of the RUAA but before the delayed date of repeal of the UAA. Another possibility that a State with such a problem may consider is to incorporate the repealed UAA into the RUAA.

4. The following is an illustration of how Sections 3, 31, 32, and 33 operate. Assume that a state legislature passes the RUAA and, in accordance with Section 31, makes the RUAA effective on January 1, 2005, and, in accordance with Sections 3(c) and 32, chooses a date of January 1, 2007, [referred to as the "delayed date" in Sections 3(c) and 32] by which all arbitration agreements in the State must conform to the RUAA and on which the UAA will be repealed. Under Sections 3(a) and 31 any agreements entered into after January 1, 2005, would be covered by the RUAA. Under Sections 3(b) and 33 for the period between January 1, 2005, and December 31, 2006, the UAA would apply to arbitration agreements entered into before January 1, 2005, unless all parties to the arbitration agreement or proceedings agree in a record that the RUAA would govern. Under Sections 3(c) and 32 on January 1, 2007, the RUAA would apply to all arbitration agreements, i.e., those entered into both before and after January 1, 2005, the effective date of the RUAA.

5. By adopting Section 3(c) a legislature will express a specific intent that the RUAA, on the date which the legislature selects, will have retroactive application as to arbitration agreements entered into prior to the effective date of the legislation and where the parties have not opted into coverage under the RUAA during the interim period under Section 3(a)(2). Courts generally require legislatures to express such an intent as to retroactive application. Millenium Solutions, Inc. v. Davis, 258 Neb. 293, 603 N.W.2d 406 (1999) (holding that because legislature did not clearly express an intention that Uniform Arbitration Act was to be applied retroactively, it only applies prospectively); see also Koch v. S.E.C., 177 F.3d 784 (9th Cir. 1999); Phillips v. Curiale, 128 N.J. 608, 608 A.2d 895 (1992). Retroactive application of statutes to preexisting contracts is acceptable when the legislation has a legitimate purpose and the measures are reasonable and appropriate to that end. 2 Sutherland Stat. Const. § 41.07 (5th ed. 1993). The need for uniform application of arbitration laws and to avoid two sets of rules for arbitration agreements that are of a long-term duration are legitimate rationales for retroactive application, especially because parties will be given a time period in which to determine whether to opt for coverage under the UAA or the RUAA and during which to adjust any provisions in their arbitration agreements for eventual application of the RUAA. These same rationales were used for similar provisions in the Revised Uniform Partnership Act and the Uniform Limited Liability Partnership Act.

SECTION 4. EFFECT OF AGREEMENT TO ARBITRATE; NONWAIVABLE PROVISIONS.

(a) Except as otherwise provided in subsections (b) and (c), a party to an agreement to arbitrate or to an arbitration proceeding may waive or, the parties may vary the effect of, the requirements of this [Act] to the extent permitted by law.

(b) Before a controversy arises that is subject to an agreement to arbitrate, a party to the agreement may not:

(1) waive or agree to vary the effect of the requirements of Section 5(a), 6(a), 8, 17(a), 17(b), 26, or 28;

(2) agree to unreasonably restrict the right under Section 9 to notice of the initiation of an arbitration proceeding;

(3) agree to unreasonably restrict the right under Section 12 to disclosure of any facts by a neutral arbitrator; or

(4) waive the right under Section 16 of a party to an agreement to arbitrate to be represented by a lawyer at any proceeding or hearing under this [Act], but an employer and a labor organization may waive the right to representation by a lawyer in a labor arbitration.

(c) A party to an agreement to arbitrate or arbitration proceeding may not waive, or the parties may not vary the effect of, the requirements of this section or Section 3(a) or (c), 7, 14, 18, 20(d) or (e), 22, 23, 24, 25(a) or (b), 29, 30, 31, or 32.

1. Section 4 is similar to provisions in the Uniform Partnership Act (Section 103) and in the proposed Revised Uniform Limited Partnership Act (Section 101B). The intent of Section 4 is to indicate that, although the RUAA is primarily a default statute and the parties' autonomy as expressed in their agreements concerning an arbitration normally should control the arbitration, there are provisions that parties cannot waive prior to a dispute arising under an arbitration agreement or cannot waive at all.

2. Section 4(a) embodies the notion of party autonomy in shaping their arbitration agreement or arbitration process. It should be noted that, subject to Section 4(b) and (c) and in accordance with Comment 1 to Section 6, although the parties' arbitration agreement must be in a record, they subsequently may vary that agreement orally, for instance, during the arbitration proceeding.

3. The phrase "to the extent permitted by law" is included in Section 4(a) to inform the parties that they cannot vary the terms of an arbitration agreement from the RUAA if the result would violate applicable law. This situation occurs most often when a party includes unconscionable provisions in an arbitration agreement. See Comment 7 to Section 6. The law in some circumstances may disallow parties from limiting certain remedies, such as attorney's fees and punitive or other exemplary damages. For example, although parties might limit remedies, such as recovery of attorney's fees or punitive damages in Section 21, a court might deem such a limitation inapplicable where an arbitration involves statutory rights that would require these remedies. See Comment 2 to Section 21.

4. Section 4(b) is a listing of those provisions that cannot be waived in a predispute context. After a dispute subject to arbitration arises, the parties should have more autonomy to agree to provisions different from those required under the RUAA; in that circumstance the sections noted in 4(b) are waivable.

Special mention should be made of the following sections:

a. Section 9 allows the parties to shape what goes into a notice to initiate an arbitration proceeding as well as the means of giving the notice but Section 4(b)(2) insures that reasonable notice must be given.

b. Section 4(b)(3) recognizes that many parties are governed by disclosure requirements through an arbitration organization or a professional association. Such requirements would be controlling instead of those in Section 12 so long as they are reasonable in what they require a neutral arbitrator to disclose. Also, parties can waive the requirement that non-neutral arbitrators appointed by the parties make any disclosures under Section 12. See, e.g., AAA, Commercial Disp. Resolution Pro. R-12(b), 19 (disclosure requirements do not apply to party-appointed arbitrator, unless parties agree to the contrary).

c. Section 16, which provides that a party can be represented by an attorney and which cannot be waived prior to the initiation of an arbitration proceeding under Section 9, is an important right, especially in the context of an arbitration agreement between parties of unequal bargaining power. However, in labor-management arbitration many parties agree to expedited provisions where, prior to any hearing on a particular matter, they knowingly waive the right to have attorneys present their cases (and also prohibit transcripts and briefs) in order to have a quick, informal, and inexpensive arbitration mechanism. Because of this longstanding practice and because the parties are of relatively equal bargaining power, Section 4(b)(4) makes an exception for labor-management arbitration.

d. Although prior to an arbitration dispute, parties should not be able to waive Section 26 concerning jurisdiction and Section 28 regarding appeals because these provisions deal with courts' authority to hear cases, after the dispute arises if parties wish to limit the jurisdictional provisions of Section 26 or the provisions regarding appeals in Section 28 to decide that there will be no appeal from lower court rulings, they should be free to do so.

5. Section 4(c) includes those provisions such as those that involve the judicial process, the waivability of the RUAA, the effective date of the RUAA, or the inherent rights of an arbitrator. The provisions in Section 4(c) should not be within the control of the parties either before or after the arbitration dispute arises.

a. Section 7 concerns the court's authority either to compel or stay arbitration proceedings. Parties should not be able to interfere with this power of the court to initiate or deny the right to arbitrate.

b. Section 14 provides arbitrators and arbitration organizations with immunity for acting in their respective capacities. Similarly, arbitrators and representatives of arbitration organizations are protected from being required to testify in certain instances and if arbitrators or arbitration organizations are the subject of unwarranted litigation, they can recover attorney fees. This section is intended to protect the integrity of the arbitration process and is not waivable by the parties.

c. Likewise, Section 18, dealing with judicial enforcement of preaward rulings, is an inherent right; otherwise parties would be unable to insure a fair hearing and there would be no mechanism to carry out preaward orders.

d. Subsections (a), (b), and (c) of Section 20 give the parties the right to apply to the arbitrators to correct or clarify an award; this right is waivable. But the right of a court in Section 20(d) to order an arbitrator to correct or clarify an award and the applicability of Sections 22, 23, and 24 to Section 20 as provided in Section 20(e) are not waivable.

e. The judicial confirmation, vacatur, and modification provisions of Sections 22, 23, and 24 are not waivable. Special note should be made in regard to Section 23 concerning vacatur. Parties cannot waive or vary the statutory grounds for vacatur such as that a court can vacate an arbitration award procured by fraud or corruption. However, parties can add appropriate grounds that are not in the statute. For instance, as described in Comment C to Section 23, courts have developed nonstatutory grounds of manifest disregard of the law and violation of public policy that will void an arbitration award. Parties could include such standards as grounds for vacatur in their arbitration agreement. Similarly, as discussed in Comment B to Section 23, at this time there is a split of authority whether courts will recognize the validity of arbitration agreements by parties to "opt in" to judicial review of an award for errors of fact or law. See, e.g., Moncarsh v. Heiley, & Blas, 3 Cal. 4th 1, 2, 832 P. 2d 899, 912 ("[I]n the absence of some limiting clause in the arbitration agreement, the merits of the award, either on questions of fact or of law, may not be reviewed except as provided in the statute.") (1992); Tretina Printing, Inc. v. Fitzpatrick & Associates, Inc., 135 N.J. 349, 357-58, 640 A. 2d. 788 (1994) ("[T]he parties are free to expand the scope of judicial review by providing for such expansion in their contract"). By including Section 23 as one of the referenced sections in Section 4(c), the Drafting Committee did not intend that an opt-in clause would "vary a requirement" of Section 23. If authoritative case law recognizes an opt-in standard of review, Section 4(c) is not intended to prohibit such a clause in an arbitration agreement.

f. Section 25(a) and (b) provides the mechanisms for a court to enter judgment and to award costs. Because these powers are within the province of a court they are not waivable. Section 25(c) concerns remedies of attorney's fees and litigation expenses that, similar to other remedies in Section 21, parties can determine by agreement.

g. Parties cannot vary the nonwaivability provision of this section, the uniformity of interpretation in Section 29, the applicability of the Electronic Signatures in Global and National Commerce Act of Section 30, the effective date in Section 31, the application of the Act in Section 3(a) and (c), Section 32 regarding repeal of the UAA or the savings clause in Section 33.

SECTION 5. [APPLICATION] FOR JUDICIAL RELIEF.

(a) Except as otherwise provided in Section 28, an [application] for judicial relief under this [Act] must be made by [motion] to the court and heard in the manner provided by law or rule of court for making and hearing [motions].

(b) Unless a civil action involving the agreement to arbitrate is pending, notice of an initial [motion] to the court under this [Act] must be served in the manner provided by law for the service of a summons in a civil action. Otherwise, notice of the motion must be given in the manner provided by law or rule of court for serving [motions] in pending cases.

1. Section 5, subsections (a) and (b) are based on Section 16 of the UAA. Its purpose is twofold: (1) that legal actions to a court involving an arbitration matter under the RUAA will be by motion and not by trial and (2) unless the parties otherwise agree, the initial motion filed with a court will be served in the same manner as the initiation of a civil action.

2. The UAA uses the term "application" throughout the statute. Legal actions under both the UAA and the FAA generally are conducted by motion practice and are not subject to the delays of a civil trial. This system has worked well and the intent of Section 5 is to retain it. However, in some States there may be different means of initiating arbitration actions, such as filing a petition or a complaint, instead of or along with a motion or an application. This section is not intended to alter established practice in any particular State and the terms "application" and "motion" have been bracketed throughout the RUAA for substitution by States where appropriate.

SECTION 6. VALIDITY OF AGREEMENT TO ARBITRATE.

(a) An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable, and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract.

(b) The court shall decide whether an agreement to arbitrate exists or a controversy is subject to an agreement to arbitrate.

(c) An arbitrator shall decide whether a condition precedent to arbitrability has been fulfilled and whether a contract containing a valid agreement to arbitrate is enforceable.

(d) If a party to a judicial proceeding challenges the existence of, or claims that a controversy is not subject to, an agreement to arbitrate, the arbitration proceeding may continue pending final resolution of the issue by the court, unless the court otherwise orders.

1. The language in Section 6(a) as to the validity of arbitration agreements is the same as UAA Section 1 and almost the same as the language of FAA Section 2 which states that arbitration agreements "shall be valid irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." Because of the significant body of case law that has developed over the interpretation of this language in both the UAA and the FAA, this section, for the most part, is intact.

Section 6(a) provides that any terms in the arbitration agreement must be in a "record." This too follows both the UAA and FAA requirements that arbitration agreements be in writing. However, a subsequent, oral agreement about terms of an arbitration contract is valid. This position is in accord with the unanimous holding of courts that a written contract can be modified by a subsequent, oral arrangement provided that the latter is supported by valid consideration. Premier Technical Sales, Inc. v. Digital Equip. Corp., 11 F. Supp. 2d 1156 (N.D. Cal. 1998); Cambridgeport Savings Bank v. Boersner, 413 Mass. 432, 597 N.E.2d 1017 (1992); Pellegrene v. Luther, 403 Pa. 212, 169 A.2d 298 (1961); Pacific Dev., L.C. v. Orton, 982 P.2d 94 (Utah App. 1999). Indeed it is typical in the arbitration context, for many parties to have only a short statement in their contracts concerning the resolution of disputes by arbitration, and perhaps a reference to the rules of an arbitration organization. It is oftentimes only after the initial arbitration agreement is written and when a dispute arises that the parties enter into more detailed agreements as to how their arbitration process will work. Such subsequent understandings, whether oral or written, are part of the arbitration agreement.

Subsection (a), being the same as Section 1 of the Uniform Arbitration Act ("UAA"), is intended to include arbitration provisions contained in the bylaws of corporate or other associations as valid and enforceable arbitration agreements. Courts that have addressed whether arbitration provisions contained in the bylaws of corporate or other associations are enforceable under the UAA have unanimously held that they are. See Elbadramany v. Stanley, 490 So.2d 964, 964-65 (Fla. Dist. Ct. App. 1986); Wigod v. Chicago Mercantile Exchange, 490 N.E.2d 39 (Ill. App. Ct. 1986); Van C. Argiris & Co. v. May, 398 N.E.2d 1239, 1240 (Ill. App. Ct. 1979); Maine Cent. R. Co. v. Bangor & Aroostook R. Co., 395 A.2d 1107, 1119-1121 (Me. 1978). See also Keith Adams & Associates, Inc. v. Edwards, 477 P.2d 36, 38 (Wash. Ct. App. 1970); Willard Alexander, Inc. v. Glasser, 290 N.E.2d 813, 814 (N.Y. 1972).

This result, that corporate bylaws are contracts between the corporation and its shareholders and among its shareholders, is consistent with the rule in the majority of jurisdictions, including Delaware, New York, Illinois, Massachusetts, and California. See ER Holdings, Inc. v. Norton Co., 735 F. Supp. 1094, 1097 (D. Mass. 1990); Kidsco Inc. v. Dinsmore, 674 A.2d 483, 492 (Del. Ch. 1995) (citing Centaur Partners, IV v. National Intergroup, Inc., 582 A.2d 923, 926 (Del. 1990)); Black v. Glass, 438 So.2d 1359, 1367 (Ala. 1983); Norris v. S. Shore Chamber of Commerce, 424 N.E.2d 76, 77 (Ill. App. Ct. 1981); Procopio v. Fisher, 443 N.Y.S.2d 492, 495 (N.Y. App. Div. 1981); Jessie v. Boynton, 361 N.E.2d 1267, 1273 (Mass. 1977); O'leary v. Board of Directors, Howard Young Medical Center, Inc., 278 N.W.2d 217, 222 (Wis. Ct. App. 1979); Casady v. Modern Metal Spinning & Mfg. Co., 10 Cal. Rptr. 790, 793 (Cal. Ct. App. 1961). See also Brenner v. Powers, 584 N.E.2d 569, 574 (Ind. Ct. App. 1992) (holding that the bylaws of Indiana not-for-profit corporation are generally "a form of contract between the corporation and its members and among the members themselves"). Moreover, a number of additional jurisdictions that have not specifically held corporate bylaws to be contracts have determined that such bylaws should be construed and interpreted as though they were contracts. See Unigroup, Inc. v. O'Rourke Storage & Transfer Co., 980 F.2d 1217, 1220 (8th Cir. 1992) (applying Missouri law); Phillips v. National Trappers Ass'n, 407 N.W.2d 609, 611 (Iowa Ct. App. 1987); Storrs v. Lutheran Hosps. and Homes Soc. of Am., Inc., 609 P.2d 24, 30 (Alaska 1980); Blue Ridge Property Owners Assoc. v. Miller, 221 S.E.2d 163, 166 (Va. 1976); Toler v. Clark Rural Elec. Co-op. Corp., 512 S.W.2d 25, 26 (Ky. 1974); Schroeder v. Meridian Imp. Club., 221 P.2d 544, 548 (Wash. 1950).

This result is further supported by the general rule that the bylaws of voluntary associations are a contract between the association and its members, and among its members. See Robinson v. Kansas State High School Activities Ass'n, Inc., 917 P.2d 836, 844 (Kan. 1996); Loigman v. Trombadore, 550 A.2d 154, 161 (N.J. Super. App. Div. 1988); Hebert v. Ventetuolo, 480 A.2d 403, 407 (R.I. 1984); Maine Cent. R. Co. v. Bangor & Aroostook R. Co., 395 A.2d 1107, 1119 (Me. 1978); Attoe v. Madison Professional Policemen's Ass'n, 255 N.W.2d 489, 492 (Wis. 1977); Stoica v. International Alliance of Theatrical Stage Emp. and Moving Picture Mach. Operators of U.S. and Canada, 178 P.2d 21, 22-23 (Cal. Ct. App. 1947).

2. Subsections (b) and (c) of Section 6 are intended to incorporate the holdings of the vast majority of state courts and the law that has developed under the FAA that, in the absence of an agreement to the contrary, issues of substantive arbitrability, i.e., whether a dispute is encompassed by an agreement to arbitrate, are for a court to decide and issues of procedural arbitrability, i.e., whether prerequisites such as time limits, notice, laches, estoppel, and other conditions precedent to an obligation to arbitrate have been met, are for the arbitrators to decide. City of Cottonwood v. James L. Fann Contracting, Inc., 179 Ariz. 185, 877 P.2d 284, 292 (1994); Thomas v. Farmers Ins. Exchange, 857 P.2d 532, 534 (Colo. Ct. App. 1993); Executive Life Ins. Co. v. John Hammer & Assoc., Inc., 569 So. 2d 855, 857 (Fla. Dist Ct. App. 1990); Amalgamated Transit Union Local 900 v. Suburban Bus Div., 262 Ill. App. 3d 334, 199 Ill. Dec. 630, 635, 634 N.E.2d 469, 474(1994); Des Moines Asphalt & Paving Co. v. Colcon Industries Corp., 500 N.W.2d 70, 72 (Iowa 1993); City of Lenexa v. C.L. Fairley Const. Co., 15 Kan.App. 2d 207, 805 P.2d 507, 510 (1991); The Beyt, Rish, Robbins Group v. Appalachian Reg. Healthcare, Inc., 854 S.W.2d 784, 786 (Ky. Ct. App. 1993); City of Dearborn v. Freeman-Darling, Inc., 119 Mich.App. 439, 326 N.W.2d 831 (1982); City of Morris v. Duininck Bros. Inc., 531 N.W.2d 208, 210 (Minn. Ct. App. 1995); Gaines v. Fin. Planning Consultants, Inc., 857 S.W.2d 430, 433 (Mo.Ct.App. 1993); Exber v. Sletten, 92 Nev. 721, 558 P.2d 517 (1976); State v. Stremick Const. Co., 370 N.W.2d 730, 735 (N.D. 1985); Messa v. State Farm Ins. Co., 433 Pa.Super. 594, 641 A.2d 1167, 1170 (1994); Smith v. H.E. Butt Grocery Co., 18 S.W.3d 910 (Tex. Ct. App. 2000); Valero Energy Corp. v. Teco Pipeline Co., 2 S.W.3d 576 (Tex. Ct. App. 1999); City of Lubbock v. Hancock, 940 S.W.2d 123 (Tex. Ct. App. 1996); but see Smith Barney, Harris Upham & Co. v. Luckie, 58 N.Y.2d 193, 647 N.E.2d 1308, 623 N.Y.S.2d 800 (1995) (stating that a court rather than an arbitrator under New York arbitration law should decide whether a statute of limitations time bars an arbitration).

In particular it should be noted that Section 6(b), which provides for courts to decide substantive arbitrability, is subject to waiver under Section 4(a). This approach is not only the law in most States but also follows Supreme Court precedent under the FAA that if there is no agreement to the contrary, questions of substantive arbitrability are for the courts to decide. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995). Some arbitration organizations, such as the American Arbitration Association in its rules on commercial arbitration disputes, provide that arbitrators, rather than courts, make the initial determination as to substantive arbitrability. AAA, Commercial Disp. Resolution Pro. R-8(b); see also Apollo Computer, Inc. v. Berg, 886 F.2d 469 (1st Cir. 1989) (finding that when parties agreed that all disputes arising out of or in connection with distributorship agreement would be settled by binding arbitration in accordance with the rules of arbitration of the International Chamber of Commerce, they agreed to submit issues of arbitrability to arbitrator); Daiei v. United States Shoe Corp., 755 F. Supp. 299 (D. Haw. 1991) (noting that parties agreed to submit issues of arbitrability to arbitrator, when they incorporated by reference in their arbitration agreement the rules of the International Chamber of Commerce providing that "any decision as to the arbitrator's jurisdiction shall lie with the arbitrator").

Sections 6(c) and (d) are also waivable under Section 4(a).

3. In deciding the validity of arbitration agreements in the insurance industry under Sections 6(a) and (b), courts should note that such arbitration clauses trigger the need for analyses under the McCarran-Ferguson Act, 15 U.S.C. § 1012, the FAA, and applicable, relevant state law.

4. The language in Section 6(c), "whether a contract containing a valid agreement to arbitrate is enforceable," is intended to follow the "separability" doctrine outlined in Prima Paint Corp. v. Flood & Conklin Manufacturing Co., 388 U.S. 395 (1967). There the plaintiff filed a diversity suit in federal court to rescind an agreement for fraud in the inducement and to enjoin arbitration. The alleged fraud was in inducing assent to the underlying agreement and not to the arbitration clause itself. The Supreme Court, applying the FAA to the case, determined that the arbitration clause was separable from the contract in which it was made. So long as no party claimed that only the arbitration clause was induced by fraud, a broad arbitration clause encompassed arbitration of a claim alleging that the underlying contract was induced by fraud. Thus, if a disputed issue is within the scope of the arbitration clause, challenges to the enforceability of the underlying contract on grounds such as fraud, illegality, mutual mistake, duress, unconscionability, ultra vires and the like are to be decided by the arbitrator and not the court. See II Ian Macneil, Richard Speidel, and Thomas Stipanowich, Federal Arbitration Law §§15.2-15.3 (1995) [hereinafter "Macneil Treatise"]. A majority of States recognize some form of the separability doctrine under their state arbitration laws. Old Republic Ins. Co. v. Lanier, 644 So. 2d 1258 (Ala. 1994); U.S. Insulation, Inc. v. Hilro Constr. Co., 705 P.2d 490 (Ariz. Ct. App. 1985); Erickson, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street, 35 Cal. 3d 312, 197 Cal.Rptr. 581, 673 P.2d 251 (1983); Hercules & Co. v. Shama Rest. Corp., 613 A.2d 916 (D.C. Ct. App. 1992); Brown v. KFC Nat'l Mgmt. Co., 82 Hawaii 226, 921 P.2d 146 (1996); Quirk v. Data Terminal Systems, Inc., 739 Mass. 762, 400 N.E.2d 858 (Mass. 1980); Weinrott v. Carp, 32 N.Y.2d 190, 298 N.E.2d 42, 344 N.Y.S.2d 848 (1973); Weiss v. Voice/Fax Corp., 94 Ohio App. 3d 309, 640 N.E.2d 875 (Ohio 1994); Jackson Mills, Inc. v. BT Capital Corp., 440 S.E.2d 877 (S.C. 1994); South Carolina Pub. Serv. Auth. v. Great Western Coal, 437 S.E.2d 22 (S.C. 1993); Gerwell v. Moran, 10 S.W.3d 28 (Tex. Ct. App. 1999); Schneider, Inc. v. Research-Cottrell, Inc., 474 F. Supp 1179 (W.D. Pa. 1979) (applying Pennsylvania law); New Process Steel Corp. v. Titan Indus. Corp., 555 F. Supp. 1018 (S.D. Tex. 1983) (applying Texas law); Pinkis v. Network Cinema Corp., 512 P.2d 751 (Wash. 1973).

Other States have either limited or declined to follow the Prima Paint doctrine on separability. Rosenthal v. Great W. Fin. Sec. Corp., 14 Cal. 4th 394, 58 Cal.Rptr. 2d 875, 926 P.2d 1061 (1996); Goebel v. Blocks and Marbles Brand Toys, Inc., 568 N.E.2d 552 (Ind. 1991); City of Wamego v. L.R. Foy Constr. Co, 675 P.2d 912 (Kan. Ct. App. 1984); George Engine Co. v. Southern Shipbuilding Corp., 376 So. 2d 1040 (La. Ct. App. 1977); Holmes v. Coverall N. Am., Inc., 633 A.2d 932 (Md. 1993); Atcas v. Credit Clearing Corp. of Am., 197 N.W.2d 448 (Minn. 1972); Shaw v. Kuhnel & Assocs., 698 P.2d 880 (N.M. 1985); Shaffer v. Jeffery, 915 P.2d 910 (Okla. 1996) (recognizing that majority of States apply the doctrine of separability but declining to follow the doctrine); Frizzell Const. Co. v. Gatlinburg L.L.C., 9 S.W.3d 79 (Tenn. 1999).

5. Waiver is one area where courts, rather than arbitrators, often make the decision as to enforceability of an arbitration clause. However, because of the public policy favoring arbitration, a court normally will only find a waiver of a right to arbitrate where a party claiming waiver meets the burden of proving that the waiver has caused prejudice. Sedillo v. Campbell, 5 S.W.3d 824 (Tex. Ct. App. 1999). For instance, where a plaintiff brings an action against a defendant in court, engages in extensive discovery and then attempts to dismiss the lawsuit on the grounds of an arbitration clause, a defendant might challenge the dismissal on the grounds that the plaintiff has waived any right to use of the arbitration clause. S&R Co. of Kingston v. Latona Trucking, Inc., 159 F.3d 80 (2d Cir. 1998). Allowing the court to decide this issue of arbitrability comports with the separability doctrine because in most instances waiver concerns only the arbitration clause itself and not an attack on the underlying contract. It is also a matter of judicial economy to require that a party, who pursues an action in a court proceeding but later claims arbitrability, be held to a decision of the court on waiver.

6. Section 6(d) follows the practice of the American Arbitration Association and most other arbitration organizations that if a party challenges the arbitrability of a dispute in a court proceeding, the arbitration organization or arbitrators in their discretion may continue with the arbitration unless a court issues an order to stay the arbitration or makes a final determination that the matter is not arbitrable.

7. Contracts of adhesion and unconscionability: Unequal bargaining power often affects contracts containing arbitration provisions involving employers and employees, sellers and consumers, health maintenance organizations and patients, franchisors and franchisees, and others.

Despite some recent developments to the contrary, courts do not often find contracts unenforceable for unconscionability. To determine whether to void a contract on this ground, courts examine a number of factors. These factors include: unequal bargaining power, whether the weaker party may opt out of arbitration, the clarity and conspicuousness of the arbitration clause, whether an unfair advantage is obtained, whether the arbitration clause is negotiable, whether the arbitration provision is boilerplate, whether the aggrieved party had a meaningful choice or was compelled to accept arbitration, whether the arbitration agreement is within the reasonable expectations of the weaker party, and whether the stronger party used deceptive tactics. See, e.g., We Care Hair Dev., Inc. v. Engen, 180 F.3d 838 (7th Cir. 1999); Harris v. Green Tree Fin. Corp., 183 F.3d 173 (3d Cir. 1999); Broemmer v. Abortion Serv. of Phoenix, Ltd., 173 Ariz. 148, 840 P.2d 1013 (1992); Chor v. Piper, Jaffray & Hopwood, Inc., 261 Mont. 143, 862 P.2d 26 (1993); Buraczynski v. Eyring, 919 S.W.2d 314 (Tenn. 1996); Sosa v. Paulos, 924 P.2d 357 (Utah 1996); Powers v. Dickson, Carlson & Campillo, 54 Cal. App. 4th 1102, 63 Cal. Rptr. 2d 261 (1997); Beldon Roofing & Remodeling Co. v. Tanner, 1997 WL 280482 (Tex. Ct. App. May 28, 1997).

Despite these many factors, courts have been reluctant to find arbitration agreements unconscionable. II Macneil Treatise § 19.3; David S. Schwartz, Enforcing Small Print to Protect Big Business: Employee and Consumer Rights Claims in an Age of Compelled Arbitration, 1997 Wis. L. Rev. 33 (1997); Stephen J. Ware, Arbitration and Unconscionability After Doctor's Associates, Inc. v. Cassarotto, 31 Wake Forest L. Rev. 1001 (1996). However, in the last few years, some cases have gone the other way and courts have begun to scrutinize more closely the enforceability of arbitration agreements. Hooters of Am., Inc. v. Phillips, 173 F.3d 933 (4th Cir. 1999) (stating that one-sided arbitration agreement that takes away numerous substantive rights and remedies of employee under Title VII is so egregious as to constitute a complete default of employer's contractual obligation to draft arbitration rules in good faith); Shankle v. B-G Maint. Mgt., Inc., 163 F.3d 1230 (10th Cir. 1999) (finding that an arbitration clause does not apply to employee's discrimination claims where employee is required to pay portion of arbitrator's fee that is a prohibitive cost for him so as to substantially limit his use of arbitral forum); Randolph v. Green Tree Fin. Corp., 178 F.3d 1149 (11th Cir. 1999), cert. granted, 120 S.Ct. 1552, 146 L.Ed. 2d 458 (2000) (holding that consumer not required to arbitrate where arbitration clause is silent on subject of arbitration fees and costs due to risk that imposition of large fees and costs on consumer may defeat remedial purposes of Truth in Lending Act) [but cf. Dobbins v. Hawk's Enter., 198 F.3d 715 (8th Cir. 1999) (finding that before court can determine if administrative costs make arbitration clause unconscionable, purchasers must explore whether arbitration organization will waive or diminish its fees or whether seller will offer to pay the fees)]; Paladino v. Avnet Computer Tech., Inc., 134 F.3d 1054 (11th Cir. 1998) (employee not required to arbitrate Title VII claim where the contract limits damages below that allowed by the statute); Broemmer v. Abortion Serv. of Phoenix, Ltd., supra (stating that arbitration agreement unenforceable because it required a patient to arbitrate a malpractice claim and to waive the right to jury trial and was beyond the patient's reasonable expectations where drafter inserted potentially advantageous term requiring arbitrator of malpractice claims to be a licensed medical doctor); Armendariz v. Foundation Health Psychcare Serv. Inc., 24 Cal. 4th 83, 6 P.3d 669, 99 Cal. Rptr. 2d 745 (2000) (concluding that clause in arbitration agreement limiting employee's remedies in state anti-discrimination claims is cause to void arbitration agreement on grounds of unconscionability); Broughton v. Cigna Healthplans of California, 21 Cal. 4th 1066, 988 P.2d 67, 90 Cal. Rptr. 2d 334 (1999); (finding although consumer's claim for damages under consumer protection statute is arbitrable, claim for injunctive relief is not because of the public benefit for the injunctive remedy and the advantages of a judicial forum for such relief); Engalla v. Permanente Med. Grp., 15 Cal. 4th 951, 938 P.2d 903, 64 Cal. Rptr. 2d 843 (1997) (stating that health maintenance organization may not compel arbitration where it fraudulently induced participant to agree to the arbitration of disputes, fraudulently misrepresented speed of arbitration selection process and forced delays so as to waive the right of arbitration); Gonzalez v. Hughes Aircraft Employees Fed. Credit Union, 70 Cal. App.4th 468, 82 Cal. Rptr. 2d 526 (1999) (holding that arbitration agreement which has unfair time limits for employees to file claims, requires employees to arbitrate virtually all claims but allows employer to obtain judicial relief in virtually all employment matters, and severely limits employees' discovery rights is both procedurally and substantively unconscionable); Stirlen v. Supercuts, Inc., 51 Cal. App. 4th 1519, 60 Cal. Rptr. 2d 138 (1997) (ruling that one-sided compulsory arbitration clause which reserved litigation rights to the employer only and denied employees rights to exemplary damages, equitable relief, attorney fees, costs, and a shorter statute of limitations unconscionable); Rembert v. Ryan's Family Steak House, 235 Mich.App. 118, 596 N.W.2d 208 (1999) (concluding that a predispute agreement to arbitrate statutory employment discrimination claims was valid only as long as employee did not waive any rights or remedies under the statute and arbitral process was fair); Alamo Rent A Car, Inc. v. Galarza, 306 N.J. Super. 384, 703 A.2d 961 (1997) (finding that an arbitration clause that does not clearly and unmistakably include claims of employment discrimination fails to waive employee's statutory rights and remedies); Arnold v. United Co. Lending Corp., 511 S.E.2d 854 (W. Va. 1998) (holding that an arbitration clause in consumer loan transaction that contained waiver of the consumer's rights to access to the courts, while reserving practically all of the lender's right to a judicial forum found unconscionable).

As a result of concerns over fairness in arbitration involving those with unequal bargaining power, organizations and individuals involved in employment, consumer, and health-care arbitration have determined common standards for arbitration in these fields. In 1995, a broad-based coalition representing interests of employers, employees, arbitrators and arbitration organizations agreed upon a Due Process Protocol for Mediation and Arbitration of Statutory Disputes Arising Out of the Employment Relationship; see also National Academy of Arbitrators, Guidelines on Arbitration of Statutory Claims under Employer-Promulgated Systems (May 21, 1997). In 1998, a similar group representing the views of consumers, industry, arbitrators, and arbitration organizations formed the National Consumer Disputes Advisory Committee under the auspices of the American Arbitration Association and adopted a Due Process Protocol for Mediation and Arbitration of Consumer Disputes. Also in 1998 the Commission on Health Care Dispute Resolution, comprised of representatives from the American Arbitration Association, the American Bar Association and the American Medical Association endorsed a Due Process Protocol for Mediation and Arbitration of Health Care Disputes. The purpose of these protocols is to ensure both procedural and substantive fairness in arbitrations involving employees, consumers and patients. The arbitration of employment, consumer and health-care disputes in accordance with these standards will be a legitimate and meaningful alternative to litigation. See, e.g., Cole v. Burns Int'l Sec. Serv., 105 F.3d 1465 (D.C. Cir. 1997) (referring specifically to the due process protocol in the employment relationship in a case involving the arbitration of an employee's rights under Title VII).

The Drafting Committee determined to leave the issue of adhesion contracts and unconscionability to developing law because (1) the doctrine of unconscionability reflects so much the substantive law of the States and not just arbitration, (2) the case law, statutes, and arbitration standards are rapidly changing, and (3) treating arbitration clauses differently from other contract provisions would raise significant preemption issues under the Federal Arbitration Act. However, it should be pointed out that a primary purpose of Section 4, which provides that some sections of the RUAA are not waivable, is to address the problem of contracts of adhesion in the statute while taking into account the limitations caused by federal preemption.

Because an arbitration agreement effectively waives a party's right to a jury trial, courts should ensure the fairness of an agreement to arbitrate, particularly in instances involving statutory rights that provide claimants with important remedies. Courts should determine that an arbitration process is adequate to protect important rights. Without these safeguards, arbitration loses credibility as an appropriate alternative to litigation.

SECTION 7. [MOTION] TO COMPEL OR STAY ARBITRATION.

(a) On [motion] of a person showing an agreement to arbitrate and alleging another person's refusal to arbitrate pursuant to the agreement:

(1) if the refusing party does not appear or does not oppose the [motion], the court shall order the parties to arbitrate; and

(2) if the refusing party opposes the [motion], the court shall proceed summarily to decide the issue and order the parties to arbitrate unless it finds that there is no enforceable agreement to arbitrate.

(b) On [motion] of a person alleging that an arbitration proceeding has been initiated or threatened but that there is no agreement to arbitrate, the court shall proceed summarily to decide the issue. If the court finds that there is an enforceable agreement to arbitrate, it shall order the parties to arbitrate.

(c) If the court finds that there is no enforceable agreement, it may not pursuant to subsection (a) or (b) order the parties to arbitrate.

(d) The court may not refuse to order arbitration because the claim subject to arbitration lacks merit or grounds for the claim have not been established.

(e) If a proceeding involving a claim referable to arbitration under an alleged agreement to arbitrate is pending in court, a [motion] under this section must be made in that court. Otherwise a [motion] under this section may be made in any court as provided in Section 27.

(f) If a party makes a [motion] to the court to order arbitration, the court on just terms shall stay any judicial proceeding that involves a claim alleged to be subject to the arbitration until the court renders a final decision under this section.

(g) If the court orders arbitration, the court on just terms shall stay any judicial proceeding that involves a claim subject to the arbitration. If a claim subject to the arbitration is severable, the court may limit the stay to that claim.

The term "summarily" in Section 7(a) and (b) is presently in UAA Section 2(a) and (b). It has been defined to mean that a trial court should act expeditiously and without a jury trial to determine whether a valid arbitration agreement exists. Grad v. Wetherholt Galleries, 660 A.2d 903 (D.C. 1995); Wallace v. Wiedenbeck, 251 A.D.2d 1091, 674 N.Y.S.2d 230, 231 (N.Y. App. Div. 1998); Burke v. Wilkins, 507 S.E.2d 913 (N.C. Ct. App. 1998); In re MHI P'ship, Ltd., 7 S.W.3d 918 (Tex. Ct. App. 1999). The term is also used in Section 4 of the FAA.

SECTION 8. PROVISIONAL REMEDIES.

(a) Before an arbitrator is appointed and is authorized and able to act, the court, upon [motion] of a party to an arbitration proceeding and for good cause shown, may enter an order for provisional remedies to protect the effectiveness of the arbitration proceeding to the same extent and under the same conditions as if the controversy were the subject of a civil action.

(b) After an arbitrator is appointed and is authorized and able to act:

(1) the arbitrator may issue such orders for provisional remedies, including interim awards, as the arbitrator finds necessary to protect the effectiveness of the arbitration proceeding and to promote the fair and expeditious resolution of the controversy, to the same extent and under the same conditions as if the controversy were the subject of a civil action and

(2) a party to an arbitration proceeding may move the court for a provisional remedy only if the matter is urgent and the arbitrator is not able to act timely or the arbitrator cannot provide an adequate remedy.

(c) A party does not waive a right of arbitration by making a [motion] under subsection (a) or (b).

1. The language of Section 8 is similar to that considered by the Drafting Committee of the UAA in 1954 and 1955; the following was included in Section 4 of the 1954 draft but was omitted in the 1955 UAA:

"At any time prior to judgment on the award, the court on application of a party may grant any remedy available for the preservation of property or securing the satisfaction of the judgment to the same extent and under the same conditions as if the dispute were in litigation rather than arbitration."

In Salvucci v. Sheehan, 349 Mass. 659, 212 N.E.2d 243 (1965), the court allowed the issuance of a temporary restraining order to prevent the defendant from conveying or encumbering property that was the subject of a pending arbitration. The Massachusetts Supreme Court noted the 1954 language and determined that it was not adopted by the National Conference because the section would be rarely needed and raised concerns about the possibility of unwarranted labor injunctions. The court concluded that the drafters of the UAA assumed that courts' jurisdiction for granting such provisional remedies was consistent with the purposes and terms of the act. Many States have allowed courts to grant provisional relief for disputes that will ultimately be resolved by arbitration. BancAmerica Commercial Corp. v. Brown, 806 P.2d 897 (Ariz. Ct. App. 1991) (discussing writ of attachment in order to secure a settlement agreement between debtor and creditor); Lambert v. Superior Court, 228 Cal. App. 3d 383, 279 Cal. Rptr. 32 (1991) (discussing mechanic's lien); Ross v. Blanchard, 251 Cal. App. 2d 739, 59 Cal. Rptr. 783 (1967) (discharge of attachment); Hughley v. Rocky Mountain Health Maint. Org., Inc., 927 P.2d 1325 (Colo. 1996) (stating that preliminary injunction to continue status quo that health maintenance organization must provide chemotherapy treatment until arbitration decision); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. District Court, 672 P.2d 1015 (Colo. 1983) (discussing preliminary injunctive relief to preserve status quo); Langston v. National Media Corp., 420 Pa.Super. 611, 617 A.2d 354 (1992) (discussing preliminary injunction requiring party to place money in an escrow account); Cal. Civ. Proc. Code § 1281.8; N.J. Stat. Ann. § 2A:23A-6(b); N.Y. C.P.L.R. § 7502(c).

Most federal courts applying the FAA agree with the Salvucci court. In Merrill Lynch v. Salvano, 999 F.2d 211 (7th Cir. 1993), the Seventh Circuit allowed a temporary restraining order to prevent employees from soliciting clients or disclosing client information in anticipation of a securities arbitration. The court held that the temporary injunctive relief would continue in force until the arbitration panel itself could consider the order. The court noted that "the weight of federal appellate authority recognizes some equitable power on the part of the district court to issue preliminary injunctive relief in disputes that are ultimately to be resolved by an arbitration panel." Id. at 214. The First, Second, Fourth, Seventh and Tenth Circuits have followed this approach. See II Macneil Treatise §25.4.

The exception under the FAA is the Eighth Circuit in Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Hovey, 726 F.2d 1286 (8th Cir. 1984), which concluded that preliminary injunctive relief under the FAA is simply unavailable, because the "judicial inquiry requisite to determine the propriety of injunctive relief necessarily would inject the court into the merits of issues more appropriately left to the arbitrator." Id. at 1292; see also Peabody Coalsales Co. v. Tampa Elec. Co., 36 F.3d 46 (8th Cir. 1994).

2. The Hovey case underscores the difficult conflict raised by interim judicial remedies: they can preempt the arbitrator's authority to decide a case and cause delay, cost, complexity, and formality through intervening litigation process, but without such protection an arbitrator's award may be worthless. See II Macneil Treatise §25.1. Such relief generally takes the form of an injunctive order, e.g., requiring that a discontinued franchise or distributorship remain in effect until an arbitration award, Roso-Lino Beverage Distribs., Inc. v. Coca-Cola Bottling Co., 749 F.2d 124 (2d Cir. 1984); Guinness-Harp Corp. v. Jos. Schlitz Brewing Co., 613 F.2d 468 (2d Cir. 1980), or that a former employee not solicit customers pending arbitration, Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Salvano, 999 F.2d 211 (7th Cir. 1993); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Dutton, 844 F.2d 726 (10th Cir. 1988); or that a party be required to post some form of security by attachment, lien, or bond, The Anaconda v. American Sugar Ref. Co., 322 U.S. 42, 64 S.Ct. 863 (1944) (attachment - see also 9 U.S.C. § 8); Blumenthal v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 910 F.2d 1049 (2d Cir. 1990) (injunction bond); see II Macneil Treatise §25.4.3. In a judicial proceeding for preliminary relief, the court does not have the benefit of the arbitrator's determination of disputed issues or interpretation of the contract. Another problem for a court is that in determining the propriety of an injunction, order, writ for attachment or other security, the court must make an assessment of hardships upon the parties and the probability of success on the merits. Such determinations fly in the face of the underlying philosophy of arbitration that the parties have chosen arbitrators to decide the merits of their disputes.

3. The approach in RUAA Section 8 that limits a court ability to grant preliminary relief to any time "[b]efore an arbitrator is appointed or is authorized or able to act * * * upon motion of a party" and provides that after the appointment the arbitrator initially must decide the propriety of a provisional remedy, avoids the delay of intervening court proceedings, does not cause courts to become involved in the merits of the dispute, defers to the parties' choice of arbitration to resolve their disputes, and allows courts that may have to review an arbitrator's preliminary order the benefit of the arbitrator's judgment on that matter. See II Macneil Treatise §§ 25.1.2, 25.3, 36.1. This language incorporates the notions of the Salvano case that upheld the district court's granting of a temporary restraining order to prevent defendant from soliciting clients or disclosing client information but "only until the arbitration panel is able to address whether the TRO should remain in effect. Once assembled, an arbitration panel can enter whatever temporary injunctive relief it deems necessary to maintain the status quo." 999 F.2d at 215. The Salvano court's preliminary remedy was necessary to prevent actions that could undermine an arbitration award but was accomplished in a fashion that protected the integrity of the arbitration process. See also Ortho Pharm. Corp. v. Amgen, Inc., 882 F.2d 806, 814, appeal after remand, 887 F.2d 460 (3d Cir. 1989) (stating that court order to protect the status quo is necessary "to protect the integrity of the applicable dispute resolution process"); Hughley v. Rocky Mountain Health Maint. Org., Inc., 927 P.2d 1325 (Colo. 1996) (granting preliminary injunction to continue status quo that health maintenance organization must provide chemotherapy treatment when denial of the relief would make the arbitration process a futile endeavor); King County v. Boeing Co., 18 Wash. App. 595, 570 P.2d 712 (1977) (denying request for declaratory judgment because the issue was for determination by the arbitrators rather than the court); N.J. Stat. Ann. § 2A:23A-6(b).

After the arbitrator is appointed and authorized and able to act, the only instance in which a party may seek relief from a court rather than the arbitrator is when the matter is an urgent one and the arbitrator could not act in a timely fashion or could not provide an effective provisional remedy. The notion of "urgency" is from the 1996 English Arbitration Act § 44(1), (3), (4), (6). These circumstances of a party seeking provisional relief from a court rather than an arbitrator after the appointment process should be limited for the policy reasons previously discussed.

4. The case law, commentators, rules of arbitration organizations, and some state statutes are very clear that arbitrators have broad authority to order provisional remedies and interim relief, including interim awards, in order to make a fair determination of an arbitral matter. This authority has included the issuance of measures equivalent to civil remedies of attachment, replevin, and sequestration to preserve assets or to make preliminary rulings ordering parties to undertake certain acts that affect the subject matter of the arbitration proceeding. See, e.g., Island Creek Coal Sales Co. v. City of Gainesville, Fla., 729 F.2d 1046 (6th Cir. 1984) (upholding under FAA arbitrator's interim award requiring city to continue performance of coal purchase contract until further order of arbitration panel); Fraulo v. Gabelli, 37 Conn. App. 708, 657 A.2d 704 (1995) (upholding under UAA arbitrator's issuance of preliminary orders regarding sale and proceeds of property); Fishman v. Streeter, 1992 WL 146830 (Ohio Ct. App., June 25, 1992) (upholding under UAA arbitrator's interim order dissolving partnership); Park City Assoc. v. Total Energy Leasing Corp., 58 A. D.2d 786, 396 N.Y.S.2d 377 (1977) (upholding under New York state arbitration statute a preliminary injunction by an arbitrator); N.J. Stat. Ann. § 2A:23A-6 (allowing provisional remedies such as "attachment, replevin, sequestration and other corresponding or equivalent remedies"); AAA, Commercial Disp. Resolution Pro. R-36, 45 (allowing arbitrator to take "whatever interim measures he or she deems necessary, including injunctive relief and measures for the protection or conservation of property and disposition of perishable goods. Such interim measures may take the form of an interim award, and the arbitrator may require security for costs of such measures."); CPR Rules 12.1, 13.1 (allowing interim measures including those "for preservation of assets, the conservation of goods or the sale of perishable goods," requiring "security for the costs of these measures," and permitting "interim, interlocutory and partial awards"); UNCITRAL Commer. Arb. Rules, Art. 17 (providing that arbitrators can take "such interim measure of protection as the arbitral tribunal may consider necessary in respect of the subject-matter of the dispute," including security for costs); II Macneil Treatise §§ 25.1.2, 25.3, 36.1.

If an arbitrator orders a provisional remedy under Section 8(b), a party can seek court enforcement of that preaward ruling under Section 18.

5. The intent of RUAA Section 8(a) is to grant the court discretion to proceed if a party files a request for a provisional remedy before an arbitrator is appointed but, while the court action is pending an arbitrator is appointed. For example, if a court has issued a temporary restraining order and an order to show cause but before the order to show cause comes to a hearing in the court, an arbitrator is appointed, the court could continue with the show-cause proceeding and issue appropriate relief or could defer the matter to the arbitrator. It is only where a party initiates an action after an arbitrator is appointed that the request for a provisional remedy usually should be made to the arbitrator.

6. If a court makes a ruling under Section 8(a), an arbitrator is allowed to review the ruling in appropriate circumstances under Section 8(b). For example, a court, on the basis of affidavits or other summary material, may grant a temporary restraining order to prohibit a party from transferring property. After an arbitrator is appointed, the arbitrator may decide after a fuller review of the evidence that the party should be allowed to transfer the property. This would be a proper decision because the arbitrator, rather than the court, may have access to more evidence and it is the arbitrator who makes the final decision on the merits.

7. Section 8(c) is intended to insure that so long as a party is pursuing the arbitration process while requesting the court to provide provisional relief under RUAA Section 8(a) or (b), the motion to the court should not act as a waiver of that party's right to arbitrate a matter. See Cal. Civ. Proc. Code § 1281.8(d).

SECTION 9. INITIATION OF ARBITRATION.

(a) A person initiates an arbitration proceeding by giving notice in a record to the other parties to the agreement to arbitrate in the agreed manner between the parties or, in the absence of agreement, by certified or registered mail, return receipt requested and obtained, or by service as authorized for the commencement of a civil action. The notice must describe the nature of the controversy and the remedy sought.

(b) Unless a person objects for lack or insufficiency of notice under Section 15(c) not later than the beginning of the arbitration hearing, the person by appearing at the hearing waives any objection to lack of or insufficiency of notice.

1. Section 9 is a new provision in the RUAA regarding initiation of an arbitration proceeding and is more formal than the notice requirements in Section 2. The language in Section 9 is based upon the Florida arbitration statute and, to some extent, the Indiana arbitration act, both of which include provisions regarding the commencement of an arbitration. Fla. Stat. Ann. § 648.08 (1990); Ind. Code § 34-57-2-2 (1998).

2. Section 9(a) includes both the means of bringing the notice to the attention of the other parties and the contents of the notice of a claim. Both the means of giving the notice and the content of the notice are subject to the parties' agreement under Sections 4(b)(2) and 9(a) so long as any restrictions on the means or content are reasonable. Not only does this approach comport with the concept of party autonomy in arbitration but it also recognizes that many parties utilize arbitration organizations that require greater or lesser specificity of notice and service.

3. The introductory language to Section 9(a) concerns the means of informing other parties of the arbitration proceeding. Many arbitration organizations allow parties to initiate arbitration through the use of regular mail and do not require registered mail or service as in a civil action. See, e.g., American Arb. Ass'n, National Rules for the Resolution of Employment Disputes, R. 4(b)(i)(2); Center for Public Resources, Rules for Non-Administered Arbitration of Business Disputes, R. 2.1; National Arb. Forum Code of Pro. R. 6(B); National Ass'n of Securities Dealers Code of Arb. Procedure, Part I, sec. 25(a); New York Stock Exchange Arb. Rules, R. 612(b). This more informal means of giving notice without evidence of receipt would be allowed under Section 9 because Section 4(b)(2) allows the parties to agree to the means of giving notice so long as there are no unreasonable restrictions.

Likewise, parties, particularly in light of the increase in electronic commerce, may decide to arbitrate disputes arising between them and to provide notice of the initiation or other proceedings of the arbitration process through electronic means. See, e.g., National Arb. Forum Code of Pro. R. 6(B).

However, if the parties do not provide for a reasonable means of notice, then Section 9(a) requires that they utilize either certified or registered mail, with a return-receipt request and that such receipt is obtained, or the same type of service as authorized as in a civil action. The term "obtained" is intended to mean that the receipt was returned regardless of whether the recipient signed it.

4. Section 9(a) explicitly requires that notice of initiation of an arbitration proceeding be given to all parties to the arbitration agreement and not just to the party against whom a person files an arbitration claim. For instance, in a construction contract with a single arbitration agreement between multiple contractors and subcontractors, if one contractor commenced an arbitration proceeding against one subcontractor, Section 9(a) requires that the contractor give notice to all persons signatory to the arbitration agreement. This is appropriate because a different contractor or subcontractor may have an interest in the arbitration proceeding so as to initiate its own arbitration proceeding or to request consolidation under Section 10 or to take other action.

5. Section 9(a) also includes a content requirement that the initiating party inform the other parties of "the nature of the controversy and the remedy sought." Similar requirements are found in the Florida and Indiana statutes and in the arbitration rules of organizations such as the American Arbitration Association, the Center for Public Resources, JAMS, NASD Regulation, Inc., and the New York Stock Exchange (although slightly different language may be used in the organizations' rules). This language in Section 9(a) is intended to insure that parties provide sufficient information in the notice to inform opposing parties of the arbitration claims while recognizing that this notice is not a formal pleading and that persons who are not attorneys often draft such notices.

6. Section 23(a)(6) allows a court to vacate an award if there is not proper notice under Section 9 and the rights of the other party were substantially prejudiced. Section 9(b) requires that the complaining party make a timely objection to the lack or insufficiency of notice of initiation of the arbitration; this requirement is similar to that found in Section 15(c) regarding notice of the arbitration hearing. Section 9(b) requires the party to object "no later than the beginning of the hearing" under Section 15(c), which is a time certain in the arbitration process.

If the appearance at the arbitration hearing is for the purpose of raising the objection as to notice and such objection has not otherwise been waived, the party's appearance for the purpose of raising that objection should not be construed as untimely.

SECTION 10. CONSOLIDATION OF SEPARATE ARBITRATION PROCEEDINGS.

(a) Except as otherwise provided in subsection (c), upon [motion] of a party to an agreement to arbitrate or to an arbitration proceeding, the court may order consolidation of separate arbitration proceedings as to all or some of the claims if:

(1) there are separate agreements to arbitrate or separate arbitration proceedings between the same persons or one of them is a party to a separate agreement to arbitrate or a separate arbitration proceeding with a third person;

(2) the claims subject to the agreements to arbitrate arise in substantial part from the same transaction or series of related transactions;

(3) the existence of a common issue of law or fact creates the possibility of conflicting decisions in the separate arbitration proceedings; and

(4) prejudice resulting from a failure to consolidate is not outweighed by the risk of undue delay or prejudice to the rights of or hardship to parties opposing consolidation.

(b) The court may order consolidation of separate arbitration proceedings as to some claims and allow other claims to be resolved in separate arbitration proceedings.

(c) The court may not order consolidation of the claims of a party to an agreement to arbitrate if the agreement prohibits consolidation.

1. Multiparty disputes have long been a source of controversy in the enforcement of agreements to arbitrate. When conflict erupts in complex transactions involving multiple contracts, it is rare for all parties to be signatories to a single arbitration agreement. In such cases, some parties may be bound to arbitrate while others are not; in other situations, there may be multiple arbitration agreements. Such realities raise the possibility that common issues of law or fact will be resolved in multiple fora, enhancing the overall expense of conflict resolution and leading to potentially inconsistent results. See III Macneil Treatise § 33.3.2. Such scenarios are particularly common in construction, insurance, maritime and sales transactions, but are not limited to those settings. See Thomas J. Stipanowich, Arbitration and the Multiparty Dispute: The Search for Workable Solutions, 72 Iowa L. Rev. 473, 481-82 (1987).

Most state arbitration statutes, the FAA, and most arbitration agreements do not specifically address consolidated arbitration proceedings. In the common case where the parties have failed to address the issue in their arbitration agreements, some courts have ordered consolidated hearings while others have denied consolidation. In the interest of adjudicative efficiency and the avoidance of potentially conflicting results, courts in New York and a number of other States concluded that they have the power to direct consolidated arbitration proceedings involving common legal or factual issues. See County of Sullivan v. Edward L. Nezelek, Inc., 42 N.Y.2d 123, 366 N.E.2d 72, 397 N.Y.S.2d 371 (1977); see also New England Energy v. Keystone Shipping Co., 855 F.2d 1 (1st Cir. 1988), cert denied, 489 U.S. 1077 (1989); Litton Bionetics, Inc. v. Glen Constr. Co., 292 Md. 34, 437 A.2d 208 (1981); Grover-Diamond Assoc. v. American Arbitration Ass'n, 297 Minn. 324, 211 N.W.2d 787 (1973); Polshek v. Bergen Cty. Iron Works, 142 N.J. Super. 516, 362 A.2d 63 (Ch. Div. 1976); Exber v. Sletten Constr. Co., 558 P.2d 517 (Nev. 1976); Plaza Dev. Serv. v. Joe Harden Builder, Inc., 294 S.C. 430, 365 S.E.2d 231 (S.C. Ct. App. 1988).

A number of other courts have held that in the absence of an agreement by all parties to multiparty arbitration they do not have the power to order consolidation of arbitrations despite the presence of common legal or factual issues. See, e.g., Stop & Shop Co. v. Gilbane Bldg. Co., 364 Mass. 325, 304 N.E.2d 429 (1973); J. Brodie & Son, Inc. v. George A. Fuller Co., 16 Mich. App. 137, 167 N.W.2d 886 (1969); Balfour, Guthrie & Co. v. Commercial Metals Co., 93 Wash. 2d 199, 607 P.2d 856 (1980).

The split of authority regarding the power of courts to consolidate arbitration proceedings in the absence of contractual consolidation provisions extends to the federal sphere. In the absence of clear direction in the FAA, courts have reached conflicting holdings. The current trend under the FAA disfavors court-ordered consolidation absent express agreement. See generally III Macneil Treatise §33.3; Glencore, Ltd. v. Schnitzer Steel Prod. Co., 189 F.3d 264 (2nd Cir. 1999). However, a recent California appellate decision held that state law regarding consolidated arbitration was not preempted by federal arbitration law under the FAA. Blue Cross of Calif. v. Superior Ct., 67 Cal. App. 4th 42, 78 Cal. Rptr. 2d 779 (1998).

2. A growing number of jurisdictions have enacted statutes empowering courts to address multiparty conflict through consolidation of proceedings or joinder of parties even in the absence of specific contractual provisions authorizing such procedures. See Cal. Civ. Proc. Code §1281.3 (West 1997) (consolidation); Ga. Code Ann. § 9-9-6 (1996) (consolidation); Mass. Gen. Laws Ann. ch. 251, § 2A (West 1997) (consolidation); N.J. Stat. Ann. § 2A-23A-3 (West 1997) (consolidation); S.C. Code Ann. § 15-48-60 (1996) (joinder); Utah Code Ann. § 78-31a-9 (1996) (joinder).

Some empirical studies also support court-ordered consolidation. In a survey of arbitrators in construction cases, 83% favored consolidated arbitrations involving all affected parties. See Dean B. Thomson, Arbitration Theory and Practice: A Survey of Construction Arbitrators, 23 Hofstra L. Rev. 137, 165-67 (1994). A similar survey of members of the ABA Forum on the Construction Industry found that 83% of nearly 1,000 responding practitioners also favored consolidation of arbitrations involving multiparty disputes. See Dean B. Thomson, The Forum's Survey on the Current and Proposed AIA A201 Dispute Resolution Provisions, 16 Constr. Law. 3, 5 (No. 3, 1996).

3. A provision in the RUAA specifically empowering courts to order consolidation in appropriate cases makes sense for several reasons. As in the judicial forum, consolidation effectuates efficiency in conflict resolution and avoidance of conflicting results. By agreeing to include an arbitration clause, parties have indicated that they wish their disputes to be resolved in such a manner. In many cases, moreover, a court may be the only practical forum within which to effect consolidation. See Schenectady v. Schenectady Patrolmen's Benev. Ass'n, 138 A. D.2d 882, 883, 526 N.Y.S.2d 259, 260 (1988). Furthermore, it is likely that in many cases one or more parties, often non-drafting parties, will not have considered the impact of the arbitration clause on multiparty disputes. By establishing a default provision which permits consolidation (subject to various limitations) in the absence of a specific contractual provision, Section 10 encourages drafters to address the issue expressly and enhances the possibility that all parties will be on notice regarding the issue.

Section 10 is an adaptation of consolidation provisions in the California and Georgia statutes. Cal. Civ. Proc. Code § 1281.3 (West 1997); Ga. Code Ann. § 9-9-6 (1996). It gives courts discretion to consolidate separate arbitration proceedings in the presence of multiparty disputes involving common issues of fact or law.

Like other sections of the RUAA, however, the provision also embodies the fundamental principle of judicial respect for the preservation and enforcement of the terms of agreements to arbitrate. Thus, Section 10(c) recognizes that consolidation of a party's claims should not be ordered in contravention of provisions of arbitration agreements prohibiting consolidation. See also Section 4(a). However, Section 10 is not intended to address the issue as to the validity of arbitration clauses in the context of class-wide disputes. For cases concerning this issue, see, e.g., Lozada v. Dale Baker Oldsmobile, Inc., 91 F.Supp. 2d 1087 (W.D.Mich. 2000) (finding an arbitration provision is unconscionable in part because it waives class remedies allowable under Truth in Lending Act ("TILA"), as well as certain declaratory and injunctive relief under federal and state consumer protection laws), on appeal to Sixth Circuit; Ramirez v. Circuit City Stores, 90 Cal. Rptr. 2d 916 (Cal. Ct. App. 1999) (finding arbitration clause in contract of employment voided as unconscionable, in part, because it would deprive arbitrator of authority to hear classwide claim), review granted and opinion superseded, 995 P.2d 137 (Cal. 2000); Powertel v. Bexley, 743 So. 2d 570 (Fla. Ct. App. 1999) (refusing to enforce arbitration clause as unconscionable in part because of its retroactive application to preexisting lawsuit and because one factor as to its substantive unconscionability was that it precluded the possibility of classwide relief); Jean R. Sternlight, As Mandatory Arbitration Meets the Class Action, Will the Class Action Survive?, 42 Wm. & Mary L. Rev. 1 (October, 2000); but cf. Johnson v. West Suburban Bank, 225 F.3d 366, (3rd Cir. 2000) (holding that neither the text nor the legislative history of TILA or the Electronic Funds Transfer Act ("EFTA") indicate an inherent conflict between TILA or EFTA and the right to arbitrate even though plaintiffs cannot proceed under the class action provisions of these statutes); Thompson v. Illinois Title Loans, Inc., 2000 WL 45493 (N.D., Jan. 11, 2000) (same as to TILA claim); Sagal v. First USA Bank, N.A., 69 F.Supp. 2d 627 (D. Del. 1999) (same), on appeal to Third Circuit; Zawikowski v. Beneficial Nat'l Bank, 1999 WL 35304 (N.D. Ill., Jan. 11, 1999) (same); Randolph v. Green Tree Fin. Corp., 991 F.Supp. 1410 (M.D. Ala. 1997), rev'd on other grounds, 178 F.2d 1149 (11th Cir. 1999), cert. granted, 120 S.Ct. 1552 (2000) (same); Lopez v. Plaza Fin. Co., 1996 WL 210073 (N.D. Ill. April 25, 1996) (same); Brown v. Surety Finance Service, Inc., 2000 U.S. Dist. LEXIS 5734 (N.D. Ill. Mar. 23, 2000) (same); Meyers v. Univest Home Loan, Inc., 1993 WL 307747 (N.D. Cal., Aug. 4, 1993) (holding that claims of named-plaintiff asserted in class action under TILA and state consumer protection act must be arbitrated); Howard v. Klynveld Peat Marwick Goerderler, 977 F.Supp. 654, 665, n.7 (S.D.N.Y. 1997) ("A plaintiff *** who has agreed to arbitrate all claims arising out of her employment may not avoid arbitration by pursuing class claims. Such claims must be pursued in non-class arbitration."); Doctor's Assoc., Inc. v. Hollingsworth, 949 F.Supp. 77, 80-81 (D. Conn. 1996) (holding that class action contract claims brought by franchisees were subject to arbitration provision of franchising agreement requiring individual arbitrations); Erickson v. Painewebber, Inc., 1990 WL 104152 (N.D. Ill., July 13, 1990) (holding that fraud claims of named-plaintiff asserted in class action must be arbitrated).

Even in the absence of express prohibitions on consolidation, the legitimate expectations of contracting parties may limit the ability of courts to consolidate arbitration proceedings. Thus, a number of decisions have recognized the right of parties opposing consolidation to prove that consolidation would undermine their stated expectations, especially regarding arbitrator selection procedures. See Continental Energy Assoc. v. Asea Brown Boveri, Inc., 192 A. D.2d 467, 596 N.Y.S.2d 416 (1993) (holding that denial of consolidation not an abuse of discretion where parties' two arbitration agreements differed substantially with respect to procedures for selecting arbitrators and manner in which award was to be rendered); Stewart Tenants Corp. v. Diesel Constr. Co., 16 A. D.2d 895, 229 N.Y.S.2d 204 (1962) (refusing to consolidate arbitrations where one agreement required AAA tribunal, other called for arbitrator to be appointee of president of real estate board); but see Connecticut Gen'l Life Ins. Co. v. Sun Life Assurance Co. of Canada, 210 F.3d 771 (7th Cir. 2000) (noting that court deciding whether to consolidate arbitration proceedings should not insist that it be clear, rather than merely more likely than not, that the parties intended consolidation). Therefore, Section 10(a)(4) requires courts to consider proof that the potential prejudice resulting from a failure to consolidate is not outweighed by prejudice to the rights of parties to the arbitration proceeding opposing consolidation. Such rights would normally be deemed to include arbitrator selection procedures, standards for the admission of evidence and rendition of the award, and other express terms of the arbitration agreement. In some circumstances, however, the imposition on contractual expectations will be slight, and no impediment to consolidation: for example, if one agreement provides for arbitration in St. Paul and the other in adjoining Minneapolis, consolidated hearings in either city should not normally be deemed to violate a substantial right of a party.

Section 10(a)(4) also requires courts to consider whether the potential prejudice resulting from a failure to consolidate is outweighed by "undue delay" or "hardship to the parties opposing consolidation." Such undue delay or hardship might result where, for example, one or more separate arbitration proceedings have already progressed to the hearing stage by the time the motion for consolidation is made.

As the cases reveal, the mere desire to have one's dispute heard in a separate proceeding is not in and of itself the kind of proof sufficient to prevent consolidation. Vigo S.S. Corp. v. Marship Corp. of Monrovia, 26 N.Y.2d 157, 162, 257 N.E.2d 624, 626, 309 N.Y.S.2d 165, 168 (1970), remittitur denied 27 N.Y.2d 535, 261 N.E.2d 112, 312 N.Y.S.2d 1003, cert. denied 400 U.S. 819 (1970); see also III Macneil Treatise § 33.3.2 (citing cases in which consolidation was ordered despite allegations that arbitrators might be confused because of the increased complexity of consolidated arbitration or that consolidation would impose additional economic burdens on the party opposing it).

4. The language in Section 10(a)(1) regarding "separate agreement to arbitrate" and "separate arbitration proceedings" are intended to cover arbitration among both principals and third-party beneficiaries of either the same agreement to arbitrate or separate agreements, such as guarantees, which incorporate by reference the arbitration provisions in the underlying contract. See, e.g., Compania Espanola de Petroleos v. Nereus Shipping Co., 527 F.2d 966 (2d Cir. 1975), cert. denied, 426 U.S. 936 (1976); but see United Kingdom v. Boeing Co., 988 F.2d 68 (2d Cir. 1993).

5. A party cannot appeal a lower court decision of an order granting or denying consolidation under Section 28, regarding appeals, because the policy behind Section 28(a)(1) and (2) is not to allow appeals of orders that result in delaying arbitration. Whether consolidation is ordered or denied, the arbitrations likely will continue - either separately or in a consolidated proceeding - and to allow appeals would delay the arbitration process.

SECTION 11. APPOINTMENT OF ARBITRATOR; SERVICE AS A NEUTRAL ARBITRATOR.

(a) If the parties to an agreement to arbitrate agree on a method for appointing an arbitrator, that method must be followed, unless the method fails. If the parties have not agreed on a method, the agreed method fails, or an arbitrator appointed fails or is unable to act and a successor has not been appointed, the court, on [motion] of a party to the arbitration proceeding, shall appoint the arbitrator. An arbitrator so appointed has all the powers of an arbitrator designated in the agreement to arbitrate or appointed pursuant to the agreed method.

(b) An individual who has a known, direct, and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party may not serve as an arbitrator required by an agreement to be neutral.

1. Because Section 11 is a waivable provision under Section 4(a), parties may choose their own method of selecting an arbitrator under Section 11(a). Parties oftentimes choose an arbitrator because of that person's knowledge or experience or relationship to the parties. This is particularly the case with non-neutral arbitrators who are sometimes chosen because of their relationship to a party and may have a direct interest in the outcome. Section 11(b) does not apply to non-neutral arbitrators but only to neutral arbitrators. Moreover, because Section 11(b) is subject to the agreement of the parties, they may choose to have a person with the type of interest or relationship described in this subsection serve as a neutral arbitrator.

2. The award granted by an arbitrator who fails to disclose the type of interest or relationship described in Section 11(b) is subject to a presumption of vacatur under Sections 12(e) and 23(a)(2). An arbitrator who discloses the type of interest or relationship described in Section 11(b) and who, despite a timely objection by a party, decides to serve is subject to vacatur under Sections 12(c) and 23(a)(2).

SECTION 12. DISCLOSURE BY ARBITRATOR.

(a) Before accepting appointment, an individual who is requested to serve as an arbitrator, after making a reasonable inquiry, shall disclose to all parties to the agreement to arbitrate and arbitration proceeding and to any other arbitrators any known facts that a reasonable person would consider likely to affect the impartiality of the arbitrator in the arbitration proceeding, including:

(1) a financial or personal interest in the outcome of the arbitration proceeding; and

(2) an existing or past relationship with any of the parties to the agreement to arbitrate or the arbitration proceeding, their counsel or representatives, a witness, or another arbitrators.

(b) An arbitrator has a continuing obligation to disclose to all parties to the agreement to arbitrate and arbitration proceeding and to any other arbitrators any facts that the arbitrator learns after accepting appointment which a reasonable person would consider likely to affect the impartiality of the arbitrator.

(c) If an arbitrator discloses a fact required by subsection (a) or (b) to be disclosed and a party timely objects to the appointment or continued service of the arbitrator based upon the fact disclosed, the objection may be a ground under Section 23(a)(2) for vacating an award made by the arbitrator.

(d) If the arbitrator did not disclose a fact as required by subsection (a) or (b), upon timely objection by a party, the court under Section 23(a)(2) may vacate an award.

(e) An arbitrator appointed as a neutral arbitrator who does not disclose a known, direct, and material interest in the outcome of the arbitration proceeding or a known, existing, and substantial relationship with a party is presumed to act with evident partiality under Section 23(a)(2).

(f) If the parties to an arbitration proceeding agree to the procedures of an arbitration organization or any other procedures for challenges to arbitrators before an award is made, substantial compliance with those procedures is a condition precedent to a [motion] to vacate an award on that ground under Section 23(a)(2).

1. The notion of decision making by independent neutrals is central to the arbitration process. The UAA and other legal and ethical norms reflect the principle that arbitrating parties have the right to be judged impartially and independently. III Macneil Treatise § 28.2.1. Thus, Section 12(a)(4) of the UAA provides that an award may be vacated where "there was evident partiality by an arbitrator appointed as a neutral or corruption in any of the arbitrators or misconduct prejudicing the rights of any party." See RUAA Section 23(a)(2); FAA Section 10(a)(2). This basic tenet of procedural fairness assumes even greater significance in light of the strict limits on judicial review of arbitration awards. See Drinane v. State Farm Mut. Auto Ins. Co., 153 Ill. 2d 207, 212, 606 N.E.2d 1181, 1183, 180 Ill. Dec. 104, 106 (1992) ("Because courts have given arbitration such a presumption of validity once the proceeding has begun, it is essential that the process by which the arbitrator is selected be certain as to the impartiality of the arbitrator.").

The problem of arbitrator partiality is a difficult one because consensual arbitration involves a tension between abstract concepts of impartial justice and the notion that parties are entitled to a decision maker of their own choosing, including an expert with the biases and prejudices inherent in particular worldly experience. Arbitrating parties frequently choose arbitrators on the basis of prior professional or business associations, or pertinent commercial expertise. See, e.g., Morelite Constr. Corp. v. New York City Dist. Council Carpenters Benefit Funds, 748 F.2d 79 (2d Cir. 1984); National Union Fire Ins. Co. v. Holt Cargo