|
According to a Louisiana federal court, a contract mandating arbitration under American Arbitration Association (AAA) rules does not require an AAA arbitrator when the contract permits a non-AAA arbitrator to hear the dispute.
In Shamsnia v. ICS Imaging Systems, Inc., No. 06-4381, 2007 WL 1729070 (E.D. La. Jun 13, 2007), the Court stayed judicial proceedings in a dispute between a doctor, Shamsnia, and a medical technology company, Sunrise Medical Technology, Inc. (Sunrise), for 90 days and required the parties to arbitrate their dispute. The parties' agreement required that they submit disputes to arbitration using AAA rules.
After the stay expired, Sunrise moved to dismiss with prejudice asserting that Shamsnia had not taken any action towards complying with the Court's arbitration order. Conversely, Shamsnia asserted he had attempted to initiate arbitration. He stated that Sunrise refused his request to use a local arbitrator, rather than the AAA in order to reduce arbitration costs. Sunrise responded by asserting that the arbitrator chosen by Shamsnia was not centrally located, as required by contract.
The Court denied Sunrise's motion to dismiss. Although the parties' contract mandated use of AAA arbitration rules, the contract permitted a non-AAA arbitrator to conduct arbitration. The only requirements were that the arbitrator(s) must be knowledgeable about the contract's subject matter and that the parties must conduct arbitration at a central or mutually agreed upon location. The Court then extended stay of the judicial proceedings and ordered the parties to arbitrate.
Subscribe to a free weekly update on ADR case law and
legislation
|