A Kentucky appellate court determined that parties have the ability to contract out of state default rules regarding arbitration notification requirements and instead contract to follow a different code of procedure.

In NCO Portfolio Management, Inc. v. Rice, No. 2007-CA-000400-MR, 2008 WL 275102 (Ky. Ct. App. Jan. 25, 2008), NCO brought an action to confirm an arbitration award against Rice for unpaid credit card debts.

The lower court held that the notice of arbitration was invalid under Ken. Rev. Stat. Ann. § 417.090, because it failed to state a time and place for an arbitration hearing. Accordingly, the lower court dismissed NCO's action.

On appeal, NCO argued that the statutory procedures set forth in § 417.090 were not applicable. Under § 417.090, a notice of arbitration must state the time and place of the arbitration hearing, unless otherwise provided by the arbitration agreement.

As the Court noted, the lower court overlooked the "unless otherwise provided" clause in the statute. The credit card agreement expressly provided that arbitration would be governed by the National Arbitration Forum (FORUM) Code of Procedure.

The FORUM's code sets forth notice and hearing procedures different from those in § 417.090. Accordingly, NCO was not required to follow the § 417.090 procedures, and instead needed to follow the FORUM's Code of Procedure as the parties had "otherwise" agreed.

Here, NCO properly followed the FORUM Code of Procedure. Accordingly, the Court reversed the lower court's decision and remanded the case with instructions for the lower court to confirm and enforce the arbitration award.