American Arbitration Association Adopts Optional Appellate Arbitration Rules

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The American Arbitration Association (AAA) has adopted a new set of Optional Appellate Arbitration Rules (the “Appellate Rules”) that became effective on November 1, 2013. Under the Appellate Rules, parties may agree, either by stipulation or in their contract, to permit the arbitral appeal of an underlying arbitration award, regardless of whether the underlying arbitration was conducted under the auspices of the AAA, its international arm, the International Centre for Dispute Resolution (ICDR), or any other arbitration institution.

Traditionally, an arbitral award may not be appealed before national courts, and parties may seek to vacate an award only on limited grounds. The Appellate Rules now provide for an appeal within the arbitration process and permit appeals based on “(1) an error of law that is material and prejudicial; or (2) determinations of fact that are clearly erroneous” (Rule A-10). The AAA has stated that the Appellate Rules “were developed for the types of large, complex cases where the parties think the ability to appeal is particularly important.” The parties’ election of the Appellate Rules, however, does not constitute a waiver of the right to seek to vacate the final arbitral award incourt. Rather, during the pendency of the arbitral appeal, the underlying award will not be considered final for purposes of any court actions to modify, enforce, correct or vacate the award, and the time period for commencing any such judicial action will be tolled (Rule A-2).

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Topics:  Appellate Rules, Arbitration, Arbitration Agreements, Arbitration Awards, Dispute Resolution

Published In: Alternative Dispute Resolution (ADR) Updates, Civil Procedure Updates, General Business Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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