Scope and Enforceability of Arbitration Clauses and Requirements

Arbitration continues to be a popular vehicle of dispute resolution. However, although the law, as well as public policy, greatly favors arbitration, competing interests become more readily apparent when one of the parties to a contract seeks to invoke an arbitration provision.¹ When some parties’ claims or issues fall outside of arbitration provisions, piecemeal litigation, including a stay of certain claims or issues pending arbitration, can result in inconsistent outcomes.² Those competing interests—combined with arbitration having its own rules and procedures as opposed to the more familiar rules of civil procedure, a party’s lack of appeal rights, and possible arbitrator disregard of legal defenses—often leave some, including sureties, looking upon arbitration provisions with great skepticism and suspicion.