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Streamlining Construction Arbitration: Reducing the Peril of "Double Jeopardy" in Dual-Track Proceedings
Construction Lawyer, 2018, Vol.38 (4), p.7-25
COPYRIGHT 2018 American Bar Association ;Copyright American Bar Association Fall 2018 ;ISSN: 0272-0116
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Title:
Streamlining Construction Arbitration: Reducing the Peril of "Double Jeopardy" in Dual-Track Proceedings
Author:
Bruner, Philip L
Subjects:
Agreements
;
Arbitration
;
Binding
;
Breach of contract
;
Building
;
Commercial arbitration agreements
;
Construction industry
;
Contracts
;
Court hearings & proceedings
;
Disputes
;
Double jeopardy
;
Federal court decisions
;
Interpretation and construction
;
Judges & magistrates
;
Judgments
;
Judicial reviews
;
Jurisdiction
;
Law
;
Laws, regulations and rules
;
Litigation
;
Piercing
;
State court decisions
;
State laws
;
Streamlining
Is Part Of:
Construction Lawyer, 2018, Vol.38 (4), p.7-25
Description:
The acceptance of this concept has been far too slow in the United States.6 II.The Peril of "Double Jeopardy" In voicing full-throated support for judicial enforcement of arbitration agreements, the U.S. Supreme Court fully recognized that the end result could be inefficient, expensive, and risky "piecemeal" resolution of related disputes among multiple parties performing on the same project under different contracts with different dispute resolution provisions.7 That result is precisely the problem that has confronted the construction industry in the twentyfirst century. When factually intertwined multiparty construction disputes now arise, all too often they are resolved on a "piecemeal" basis because not all parties are found amenable to the jurisdiction of the same forum-some parties are found to have agreed to arbitrate with different parties in separate arbitrations administered by difference arbitral institutions, while others are found to have assumed no contractual obligation to arbitrate and must pursue courtroom litigation for recourse.10 Necessarily, such multiforum disputes and claims arising out of the same intertwined facts end up being (1) decided by different arbitrators in separate arbitration proceedings, or by an arbitrator in an arbitral forum and a judge in a judicial forum having jurisdiction,11 and (2) reviewed and enforced by different appellate courts under the different statutory scopes of judicial review applicable to arbitration awards12 and to court judgments.13 This uncertainty of outcomes is known as the dispute resolution peril of "double jeopardy"-the peril that economically inconsistent decisions will be rendered by different deciders of fact and law, who sit in different arbitral tribunals or courts, and whose respective awards and judgments are subject on appeal to different standards and scopes of judicial appellate review. The goal is to bind all project participants to common arbitration clauses and rules that require arbitration of all intertwined disputes and claims arising on or related to the same project to be addressed under the same arbitration provisions and adjudicated before the same tribunal.23 Broad arbitration clauses, along with broad arbitration rules,24 should confirm expressly the authority of the arbitral tribunal or the arbitral administrator to (1) decide challenges to the arbitral tribunal's jurisdiction over issues arising out of or relating to the arbitration; (2) consolidate multiple arbitrations before a single arbitral tribunal; (3) join necessary nonsignatories in the arbitration proceeding (or otherwise provide that such signatories who refuse to participate will be bound by findings and conclusions in the arbitral tribunal's award); (4) decide all project claims, counter-claims and cross-claims arising out of or related directly or indirectly to the same factual issues-whether pleaded legally as claims in contract, tort, equity, or statute-in one binding award; and (5) permit any party to appeal an award to an appellate arbitration panel before proceeding with judicial confirmation of the award. State law, therefore, is applicable to determine which contracts are binding under 2 and enforceable under 3 if that law arose to govern issues concerning the validity, revocability, and enforceability of contracts generally. Because "traditionalprinciples" of state law allow a contract to be enforced by or against nonparties to the contract through assumption, piercing the corporate veil, alter ego, incorporation by reference, third-party beneficiary theories, waiver and estoppel, the Sixth Circuit's holding that nonparties to a contract are categorically barred from 3 relief was error.21 By supporting both the enforceability of arbitration agreements and the arbitrator's expansive jurisdiction to decide all procedural28 and substantive contract validity issues,29 and by allowing traditional state law principles to be considered in determining consolidation and joinder issues, the Supreme Court has reduced the risk of "piecemeal" arbitration.
Publisher:
Chicago: American Bar Association
Language:
English
Identifier:
ISSN: 0272-0116
Source:
ProQuest Central
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