May 30, 2014 Articles

"Remedies for Nonpayment" Rules Create New Challenges for Arbitrators

Doing justice and finding in favor of the aggrieved party are among the paramount goals of an arbitrator

by Eric A. Sauter and John J.P. Krol

Doing justice and finding in favor of the aggrieved party are among the paramount goals of an arbitrator. Of equal and absolute consequence to the American Arbitration Association (AAA) is the sustainability of the arbitral award, which regularly monitors and revises its rules with that paramount goal.

According to the AAA, the recent promulgation of Construction Industry Rule (CIR) 56 and Commercial Rule (CR) 57—captioned “Remedies for Nonpayment” and effected June 1st, 2010, and October 1st, 2013, respectively—was made following a vigorous confab regarding a unique predicament arbitrators face when confronted with a nonpaying party in ADR.

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