North Dakota Law Review

Volume 70 Number 2 Article 7

1994

Arbitration by the American Arbitration Association

James R. Deye

Lesly L. Britton

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Deye, James R. and Britton, Lesly L. (1994) "Arbitration by the American Arbitration Association," North
Dakota Law Review: Vol. 70 : No. 2 , Article 7.
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 ARBITRATION BY THE AMERICAN ARBITRATION
ASSOCIATION*

JAMES R. DEYE**
LESLY L. BRITTON***

I. AN OVERVIEW OF ARBITRATION
Arbitration is one of many dispute resolution tools. It is a process of
adjudication by a neutral decision-maker.' The primary difference
between arbitration and adjudication is the expertise of the decision-
maker. In arbitration, the expertise of a business professional is brought
to bear on a business problem. In adjudication, the expertise of a judge,
in the application of law, is brought to bear on a legal problem.'
Throughout the article, the term "arbitration" will refer to binding
arbitration. Binding arbitration is a type of arbitration in which the par-
ties have agreed to settle any disputes between them pursuant to arbitra-
tion and which provides for court enforcement of the arbitration award.3
Thus, once the parties have agreed to arbitration, they are "bound" to that
agreement and must use arbitration as a means of resolving their dispute.
Not only are they "bound" to arbitrate, they are "bound" to satisfy any
award decided upon because most jurisdictions provide that an arbitration
award may be enforced by the courts.4
A party may get into arbitration in one of four ways: by contractual
agreement,5 by agreement after the dispute has arisen, 6 by statute,7 and

* The American Arbitration Association was established in 1926 to facilitate the resolution of
disputes without the need of litigation. It is a not-for-profit, national organization with offices in 36
cities throughout the United States. It presents seminars and educational programs pertaining to all
aspects of Alternative Dispute Resolution (ADR) through its regional offices and its Department of
Education and Training. It also maintains one of the largest libraries in the world devoted solely to
ADR.
::.Regional Vice-President, American Arbitration Association, 1979 to present.
SDirector of Regional Development. American Arbitration Association.
1. Arbitration is -[a] process of dispute resolution in which a neutral third party (arbitrator)
renders a decision after a hearing at which both parties have an opportunity to be heard." BLACK'S
LAw DICTIONARY 105 (6th ed. 1990).
2. MARTIN DOMKE, DOMKE ON COMMERCIAL ARBITRATION (Rev. ed. 1991). There are
generally two civilized methods of resolving disputes: negotiation and adjudication. In negotiation,
parties to the dispute reach decisions by mutual consent. See BLACE's LAw DICTIONARY 1036 (6th
ed. 1990). In adjudication, decisions are made by a third party for the benefit of the disputants. See
id. at 42. Other ADR processes include: mediation, arbitration, summary jury trials, and mini-trials.
These processes are simply variations of negotiation and adjudication.
3. DOMIE, supra note 2, at 1.
4. See N.D. CENT. CODE § 32-29.2-11 (Supp. 1993) (providing that "[o]n application of a party,
the court shall confirm an award" unless within a specified time "grounds are urged for vacating,
modifying, or correcting the award").
5. The contracting parties generally agree that any dispute that arises from the contract is to be
settled by arbitration. The contract must be in writing. N.D. CENT. CODE § 32-29.2-01 (Supp.
1993).
6. Id. The agreement made after the dispute has arisen must also be in writing. Id.
 NORTH DAKOTA LAW REVIEW [Vol. 70:281

by court order." Today, contractual provisions are the most common way
in which parties enter arbitration.9 That, however, has not always been
the case.
Prior to the passage of modem arbitration statutes, most parties
entered arbitration as a result of agreements to arbitrate after the disputes
had arisen.' ° Today, some arbitration cases are initiated by submission
agreements, but these cases are few in number."
12
Arbitration initiated pursuant to statutory provisions is on the rise.
For example, Minnesota, New York, and New Jersey provide by statute
that insurance disputes, filed pursuant to no-fault automobile insurance
laws, must be handled through arbitration.'
Akin to statutory arbitration is court-ordered arbitration. Court-
ordered arbitration is also on the rise because some jurisdictions are giv-
ing judges more authority to order litigants into arbitration provided that
certain criteria are met.' 4 These criteria vary depending upon the juris-
diction, but generally deal with the complexity, type, and value of the
case. A few jurisdictions require, either by court administrative rule, or

7. E.g., MINN. GEN. R. Paec. 114.01 (applying to civil cases).

8. See, e.g., id. This is a relatively new development in arbitration. For example, Minnesota
court order CX-89-1863 and Rule 114 of the Minnesota General Rules of Practice require attorneys
not only to provide their clients with information about ADR processes, but also to engage in some
form of ADR. Id. at 114.03(b). The type of ADR to be used is a decision made by the parties. See
id. at 114.04(a). However, if they cannot decide on a particular method of ADR, the court will
determine which process seems most appropriate for them and will order them to participate in that
process. See id. at 114.04(b).
9. The American Arbitration Association (AAA) handles approximately 60,000 disputes per year
throughout the United States and its territories. Of those 60,000 disputes, the AAA estimates that
about 40,000 are the result of contractual provisions.
10. The modern arbitration statutes began in 1920 when New York passed a statute which
provided that parties to a contract could agree, in their contract, to arbitrate disputes that had not yet
arisen but which could later arise. See N.Y. Arbitration Act. N.Y. Civ. PRAc. L & R 7501-7514
(McKinney 1980 and Supp. 1994). The New York statute was the precursor to the Model Arbitration
Act from which North Dakota passed its arbitration statute in 1987. See N.D. CENT. CODE § 32-29.2-
01. Currently, nearly every state has adopted some form of the Model Act. The Model Act is also the
basis for the Federal Arbitration Act. See DOMIE, supra note 2, at 28.
The modern statutes, which are all generally based upon the Model Act, have many similarities,
including: provisions providing for the irrevocability of an agreement to submit a future dis pute to
arbitration, provisions enabling a party to compel another party to arbitrate, provisions providing for
the staying of a court action in violation of an arbitration agreement until the completion of the
arbitration, provisions enabling courts to appoint and replace arbitrators, provisions limiting court
review of an arbitrator's actions, or provisions providing or the vacation of arbitral awards.
11. However, the recent interest of attorneys and courts in various ADR procedures, coupled
with impending legislation and the rules of professional responsibility requiring attorneys to discuss
ADR options with their clients, may lead to an upsurge in arbitration by agreement.
An example of arbitration by agreement is the AAA's Dispute Resolution Program for Insurance
Claims which deals with personal injury disputes. Pursuant to this program, the insurance company
generally files a claim with the AAA, and asks AAA to contact the plaintiff or his or her attorney to
offer to resolve the dispute through either arbitration or mediation.
12. Lawyers Arbitration Letter, AAA, Vol. 5 No. 2 Supplement, June 1981.
13. DOMICE, supra note 2, at 18; MINN. STAT. ANN. § 65B.525(1) (West 1988 & Supp. 1994).
Through November 1993, no-fault claims accounted for more than 11,000 cases filed with AAA; 3,500
of which were filed with AAA's Minneapolis office.
14. See, e.g., BENCHBOOK FOR ARBrrRATORS 2.1B (Hennepin County Arbitration Office) (1988).
1994] ARBITRATION BY THE AAA 283

by statute, that judges refer certain cases to court-annexed arbitration or

5
mediation programs.'

II. CONSTRUCTION DISPUTES AND THE AMERICAN

ARBITRATION ASSOCIATION (AAA) METHOD

Contractual arbitration is frequently used in construction disputes

because most construction contracts include arbitration clauses. 1 6 Such
clauses allow parties to demand arbitration for any dispute that may arise
between them. When disputes arise between the parties in such situa-
tions, the parties may submit their arbitration claim to the AAA for resolu-
tion pursuant to this agreement. After a dispute has been submitted to
the AAA, the AAA issues forms called "demands" to the parties. The
demands require the name, address, and telephone number of each party
to the arbitration, 7 the name, address, and telephone number of all the
parties' representatives, a copy of the arbitration clause in the parties'
contract, a brief statement as to the nature of the dispute, a brief state-
ment of the amount claimed or relief sought, the type of business of each
party, the hearing locale, and the signature of the party filing the
demand."'
The original demand is to be served upon the other party or parties
to the dispute." The serving party must then file four copies of the
20
demand and send an administrative fee to the AAA.
After the AAA receives the demand, it opens a file and contacts the
other party or parties. 2 1 In the absence of a court order staying the arbi-
tration proceeding, the AAA will then proceed with the administration of
the matter.22 The other party or parties are then given an opportunity to

15. Id.
16. DOMKE, supra note 2, at 16.
17. The fact that one party to a multi-party contract has signed the contract does not necessarily
mean that the party must be named as a party to the arbitration. A party that did not sign the contract
cannot be named as a party to the arbitration.
18. See infra Appendix 1 (sample Demand for Arbitration and Submission to Dispute Resolution
forms).
19. American Arbitration Association, Commercial Arbitration Rules, Rule 6 [hereinafter
Commercial Arbitration Rules].
20. In determining the administrative fee, the AAA uses a sliding fee schedule. Commercial
Arbitration Rules, supra note 19, at 21. The minimum fee is $500 for claims valued at $10,000 or less;
the maximum fee is $5,000 for claims valued at $1,000,000 or more. Id. There are also hearing,
postponement, and processing fees. Id. The hearing fees are $150 per party per day. Id. The
postponement fees are $150 per party per occurrence. Id. The processing fees are $150 per party
after 180 days and quarterly thereafter until the case is closed. Id. All of these fees are slightly higher
when more than one arbitrator is involved in the case. Id.
21. Id. at Rule 6.
22. While statutory law provides a means for compelling a recalcitrant party to arbitrate, there is
no need to seek a court order to compel if the AAA is the administrator of the arbitration.
Commercial Arbitration Rules, supra note 19, at Rules 1, 52.
284 NORTH DAKOTA LAW REVIEW [Vol. 70:281

respond to the claim. Such responses are sent to the AAA and the claim-
ing party.23
It is the AAA's policy that no party is to have any ex parte communi-
cation with the arbitrator.24 All written communication between the par-
ties and the arbitrator should be directed to the AAA which will then
facilitate contact among the parties and the arbitrator. Any unilateral con-
tact between a party and the arbitrator has been viewed by the courts as
misconduct by the arbitrator and has led to vacatur of awards. 2
Following the response, the parties have an opportunity to select an
arbitrator. A list of proposed arbitrators is generally provided to each
party who then has an opportunity to strike arbitrators to which he or she
objects. The remaining arbitrators are then ranked in order of preference
and sent to the AAA. After the lists are submitted to the AAA, the AAA's
case administrator compares them and appoints an arbitrator who is
mutually acceptable to both parties. If an arbitrator cannot be appointed
from the list, 26 another list is provided to the parties, or in the alternative,
the AAA will itself appoint an arbitrator. If the AAA appoints an arbitra-
tor, the background and expertise of the arbitrator are matched with the
subject of the dispute. Such appointments by the AAA, however, are sub-
ject to factual challenges by the parties.2 7
Once an arbitrator is appointed, the case administrator contacts the
parties and the arbitrator to select a date for the hearing. After selecting a
mutually agreed upon hearing date, the case administrator ensures that
the arbitrator executes an oath of office and discloses all relevant informa-
tion concerning the parties.28

23. The AAA can serve as a conduit for information between the parties if the parties do not
wish to have direct contact with each other. However, it is the AAA's position that, in order to
facilitate the arbitration process, the parties should discuss the matters between themselves.
24. Commercial Arbitration Rules, supra note 19, at Rule 29.
25. See, e.g., Totem Marine Tug & Barge, Inc. v. North American Towing, Inc., 607 F.2d 649,
652-53 (5th Cir. 1969).
26. Arbitrators are generally not selected from the list because they are not mutually acceptable
or the mutually acceptable arbitrators are not available or decline.
27. Commerical Arbitration Rules, supra note 19, at Rule 19. The parties are also able to
choose an arbitrator by specifying in their contracts who they would like to arbitrate their dispute.
Such contractual provisions may name specific individuals or may specifd that the arbitrator must
meet certain criteria such as age, residency, or ability to speak a foreign language.
Although the parties can specify in their contract that they wish a specific individual to arbitrate
their dispute, it may be more beneficial for the parties to specify that they wish an administrative
agency to resolve their dispute. A specific individual arbitratorcan resolve administrative problems
administrative
only so far as they
problems
fall within hisoutside
that fall or her of
authority. However,
an arbitrator's an administrative agency can resolve
authority.
28. The case administrator ensures that the arbitrator executes an oath of office and discloses all
relevant information concerning the parties by sending to the arbitrator a notice of appointment. The
notice of appointment and arbitrator's oath states:

NOTICE OF APPOINTMENT
You have been selected to arbitrate the above case. If you are able to accept this
responsibility, please sign below and return. It is most important that the parties have
complete confidence in the arbitrator's impartiality. Therefore ease disclose any past
1994] ARBITRATION BY THE AAA 285

Pursuant to the Code of Ethics for Arbitrators in Commercial Dis-

putes, the arbitrator must disclose any circumstances which may preclude
him or her from impartially executing his or her duties.2 9 Such disclo-
sures are made to the AAA which then communicates that information to
the parties.
After the information is disclosed to the parties, the parties are given
an opportunity to object to the continued service of that arbitrator. If the
parties are unable to agree about the continued service of the arbitrator,
the AAA resolves the issue. 30
After all of the objections to the proposed arbitrators are considered,
the parties begin to prepare for the arbitration proceeding. Preparation
for an arbitration proceeding is similar to preparation for litigation. The
parties gather facts, talk to witnesses, prepare a chronology of events, pre-
pare statements, formulate arguments, and draft opening and closing
statements. Formal discovery is limited in the arbitration proceeding. 3 '
However, the parties are free to stipulate to any form of information
exchange.3 2 If a party is uncooperative in information exchanges, the

or present relationship with the parties or their counsel, direct or indirect, whether
financial, professional, social or oVany other kind. If any relationships arise during the
course of the arbitration, they must also be disclosed. Any doubt should be resolved in
favor of disclosure. If you are aware of such a relationship, please describe below. The
AAA will call the facts to the attention of the parties' counsel.
I HAVE NOTHING TO DISCLOSE
I HEREBY DISCLOSE THE FOLLOWING:

ARBITRATOR'S OATH
hbeing duly sworn, hereby accepts this appointment and will faithfully and fairly
Kea and decide the matters in controversy between the above-named parties, in
accordance with their [a]rbitration [a]greement, and will make an [a]ward according to
the best of the [a]rbitrator's understanding.
American Arbitration Association, Form for Notice of Appointment and Arbitrator's Oath.
29. Such disclosures include but are not limited to: familial relationships with one of the parties,
business dealings with one or more of the parties, membership in fraternal or professional
organizations, and social relationships. DOMKE, supra note 2, § 21 (Supp. 1983). See also JOINT
COMMITTEE OF THE AMERICAN ARBITRATION ASSOCIATION AND THE AMERICAN BAR ASSOCIATION,
CODE OF ETHICS FOR ARBITRATORS IN COMMERCIAL DISPUTES 6 (1977) (listing Canon II, which
states that "[a]n Arbitrator should disclose any interest or relationship likely to affect impartiality or
which might create an appearance of partiality or bias") [hereinafter CODE OF ETHICS).
30. In deciding whether a disclosure should lead to the disqualification of an arbitrator, the AAA
looks at the merits of the case, the comments made by theparties, the comments by the arbitrator,
and the standards set forth in case law and the Code of Ethics.
31. Section 32-29.2-07 of the North Dakota Century Code provides for limited discovery in
arbitration proceedings. N.D. CENT.CODE § 32-29.2-07 (Supp. 1993). Section 32-29.2-07 provides
for the subpoena of witnesses and documents and provides for the taking of depositions of witnesses
who are unable to attend the hearing. Id.
32. American Arbitration Association, Drafting Dispute Resolution Clauses: A Practical Guide,
AAA, New York 1993. For example, the parties may agree to the mutual taking of depositions,
exchange of documents, exchange of witness lists, and exchange of interrogatories.
 NORTH DAKOTA LAW REVIEW [Vol. 70:281

other party may ask the arbitrator to intervene and compel the uncooper-
ative party to provide the relevant information.3
After the parties have prepared for the arbitration proceeding, the
arbitration proceeding commences. The arbitrator conducts the arbitra-
tion proceeding, and it is his or her agenda, decorum, and protocol which
control.' The proceeding includes opening statements, claimant's case
and rebuttal, respondent's case and rebuttal, and closing statements.
After closing statements, the arbitrator may request post-hearing briefs on
a particular issue or on the entire proceeding. 3s At the conclusion of the
hearing or upon the parties' submission of their briefs, the proceeding is
then closed. After the proceedings are closed, the arbitrator must render
his or her decision or award within the time specified by the rules or their
contract.
The arbitrator's award must comply with the following requirements:
1) it must be in writing; 2) it must be signed by the arbitrator or a majority
of the arbitrators; 3) it must be dispositive of all issues submitted to arbi-
tration; 4) it must be sufficiently clear to allow for compliance and/or
enforcement; 5) it must allow for an interest component; 6) it must be
delivered to the parties by registered mail or as provided for in their
agreement; and 7) it must be rendered within the time specified by the
parties in their agreement.36
After the arbitrator has rendered his or her award, his or her author-
ity with respect to the dispute ends. Thereafter, the arbitrator has no
authority to modify, change, correct, clarify or alter his or her award
unless the parties agree to reinstate such authority or unless certain con-
ditions under section 32-29.2-09 of the North Dakota Century Code are
met. Under certain circumstances, the court, upon application of a
party, may change or correct an award.3 s
Vacating awards can be done only if:
[1)] The award was procured by corruption, fraud, or other
undue means; [2)] There was evident partiality by [the] arbitra-
tor which prejudiced the rights of a party; [3)] The arbitrators
exceeded their powers; [4)] The arbitrator refused to postpone a
hearing ... or refused to hear [material] evidence.., or other-
wise so conducted the hearing. . as to prejudice substantially

33. DOMKE, supra note 2, at 370. See also Commercial Arbitration Rules, supra note 19, at Rule
31.
34. See generally DOMKE, supra note 2 at ch. 24.
35. Id. at 251. If the arbitrator does not request such briefs, the parties may request that they
be allowed to submit them. Id.
36. See N.D. CENr. CODE § 32-29.2-08 (Supp. 1993).
37. See N.D. CENT. CODE § 32-29.2-09 (Supp. 1993).
38. See N.D. CENT. CODE § 32-29.2-13 (Supp. 1993).
1994] ARBITRATION BY THE AAA 287

the rights of a party; or [5)] There was no arbitration agreement

...and the party did not participate in the [proceeding] without
raising the objection. 9
Arbitration awards are not self-enforcing, and thus, the prevailing party
may wish to have the award confirmed by the court.40 There is no time
limit for when a party must make a motion to the court for enforcement
of the award. 4 ' However, if a motion to confirm the award is brought, a
motion2 to vacate may be brought in that same action by the opposing
4
party.

III. MISCONCEPTIONS ABOUT ARBITRATION

A. "SPLITTING THE BABY"

There is a conception in arbitration that arbitrators simply award half

of the claimed amount to each party, or "split the baby." This, however, is
not the case. That arbitration does not simply award half of the claimed
amount to each party was evidenced hundreds of years ago in the time of
King Solomon. During the time of King Solomon, two women had been
arguing as to who was the rightful mother of a baby.' King Solomon was
called in to decide to whom the baby belonged. King Solomon did not
resolve the dispute by cutting the baby in half and awarding one half of
the baby to each woman. He did not make anyone else do so, and, in fact,
did not sever any part of the child from any other part. What King Solo-
mon did do to resolve the dispute, however, was to very cagily extract
from the two woman information necessary to make an informed decision
as to whom the baby rightfully belonged. Combining that information
with his expertise in human behavior, he returned the intact infant to its
rightful mother.44 Thus, King Solomon set the stage for arbitration ever
after: 1) he gathered evidence; 2) he leavened that evidence with his own
experience; and 3) he made a decision without unthinkingly awarding half
of the claimed amount to each party.
Data from the AAA also supports the proposition that arbitrators
generally do not award half of the claimed amount to each party. For
example, in construction arbitration cases completed in 1993, only 11% of
the awards were divided such that each party received approximately half
of the claimed amount. Moreover, in 36% of the cases, between 80-100%

39. Id. at § 32-29.2-12 (Supp. 1993). Applications brought pursuant to section 32-29.2-12 must
be made within ninety days after delivery of a copy of the a-ward to the applicant. Id.
40. Id. at § 32-29.2-11 (Supp. 1993).
41. Id.
42. See N.D. CENT. CODE § 32-29.2-12 (Supp. 1993); see also DOMKE, supra note 2, at 491,
497.
43. 1 Kings 3:16-28 (King James).
44. Id.
 NORTH DAKOTA LAW REVIEW [Vol. 70:281

of the claimed amount was awarded to one party. In 10% of those cases,
between 1-19% was awarded to one party, and in 31% no award was given
either party. 5 Thus, as the above data indicates, arbitrators rarely award
half of the claimed amount to each party.

B. ARBITRATION IS INFLEXIBLE

The perception that arbitration is inflexible, especially when con-

ducted under the Rules of the AAA, is misconceived. Rule 1 of the AAA's
Commercial Arbitration Rules specifies that "[t]he parties, by written
agreement, may vary the procedures set forth in these rules. 4 6 Thus, it is
quite evident that arbitration is flexible because the parties can them-
selves vary the arbitration procedures.4 7
Moreover, the AAA does more than simply provide an arbitrator and
a framework of rules by which parties can arbitrate their dispute. The
AAA also provides rules making it difficult for a recalcitrant party to delay
a proceeding, expedites proceedings, establishes the locale of a hearing,
establishes a rate of compensation for the arbitrators, provides informa-
tion to the parties and the arbitrator about the arbitration process, and
ensures that all of the procedural requirements of the statute are met.

C. ARBITRATORS RESOLVE DISPUTES THROUGH NEGOTIATION

The conception that arbitrators resolve disputes through negotiation

or mediation is misconceived. Arbitrators do not, and should not help the
parties resolve their disputes through negotiation or mediation. 4 8 Arbitra-
tion is an adjudicative process.4 9 Once the arbitration process is begun,
the arbitrator should not engage in settlement discussions between the
parties.5" Only when the parties mutually request that their dispute be
negotiated or mediated can the arbitrator negotiate or mediate for the
parties.5 1
Moreover, there is a danger in having an arbitrator act as a negotiator
or mediator during the arbitration process. If the arbitrator also acts as a

45. See infra Appendix at 3 (listing arbitration statistics).

46. Commercial Arbitration Rules, supra note 19, at Rule 1.
47. However, problems may arise when a party seeks to vary the procedures based on a
unilateral request. The AAA will not honor such requests. The AAA will allow variance from its
Rules only if both parties agree to such variance. Commercial Arbitration Rules, supra note 19, at 6.
48. American Arbitration Association, Code of Ethics for Arbitrators in Commercial Disputes,
American Arbitration Association, New York 1977.
49. See DOMKE, supra note 2, at ch. 1 (discussing the characterization of arbitration).
50. Commercial Arbitration Rules, supra note 19, at Rule 10. See also CODE OF ETHICS, supra
note 29 at 10 (listing Canon IV(H), which states that "lilt is not improper for an arbitrator to suggest
to the parties that they discuss the possibility of settlement of the case. However, an arbitrator should
not be present or otherwise participate in the settlement discussions unless requested to do so by all
parties. An arbitrator should not exert pressure on any party to settle.-).
51. Commercial Arbitration Rules, supra note 19, at Rule 10.
1994] ARBITRATION BY THE AAA

negotiator or mediator during the arbitration proceeding, he or she may

encounter information which may later influence his or her decision as an
arbitrator. Thus, negotiation and mediation should be kept out of the
arbitration proceeding in order for the arbitrator to make an uninflu-
enced, unbiased decision.

D. ARBITRATION IS USEFUL ONLY FOR CERTAIN TYPES OF

DISPUTES

The conception that arbitration is useful only for certain types of dis-
putes is misplaced. Arbitration has been used to resolve many disputes in
many different areas. For example, George Washington's will provided
for arbitration as a means of resolving potential challenges to it.5 2 Valua-
tion disputes with respect to real property, equipment, and services also
have been resolved by arbitration.5 3 Arbitration has also been used to
resolve problems arising from the physical condition of both new and
used residential property, commercial property, and industrial property.
In addition, arbitration has successfully been used to resolve disputes in
other areas, such as construction, title insurance, computer software and
hardware, accounting, transportation, franchising, freight handling and
shipping, stocks, bonds, securities, grain trade, seed trade, various con-
sumer applications, automobile lemon laws, personal injury, property
damage, medical malpractice, insurance coverage issues, reinsurance,
banking, labor-management grievance and interest disputes, licensing,
copyright, publishing, patent, health care, pensions, employment, envi-
ronment, entertainment, sports, and sales representation. Arbitration,
thus, can be used to resolve almost any type of dispute.

IV. CONCLUSION
Arbitration is one of many alternatives to litigation. It is not neces-
sarily the best dispute resolution technique for every dispute. However, it
is helpful for parties who wish to have their dispute resolved by a method

52. DOMKE, supra note 2, at 187-88. The pertinent portion of George Washington's will states:
"[b]ut having endeavored to be plain and explicit in all the'[d]evises--even at the expense
of prolixity, perhaps tautology, I hope, and trust, that no disputes will arise concerning
them; but if contrary to expectation the case should be otherwise from the want of legal
expression, or the usual technical terms, or because too much or too little has been said
on any of the devises to be consonant with law, my will and direction expressly is, that all
disputes (if unhappily any should arise) shall be decided by three impartial and intelligent
men, known for their probity and good understanding; two to be chosen by the
disputants, each having the choice of one, and the third by those two-which three men
thus chosen shall, unfettered by Law, or legal constructions, declare their sense of the
[tiestator's intention; and such decision is, to all intents and purposes, to be as binding on
the [plarties as if it had been given in the Supreme Court of the United States."
Id. (quoting George Washington's will).
53. DOMKE, supra note 2, at 3.
290 NORTH DAKOTA LAW REVIEW [Vol. 70:281

other than litigation. The AAA also provides many other methods of
facilitating the resolution of disputes. These methods include mediation,
minitrials, early neutral evaluation, mediation-arbitration, negotiation, and
fact-finding, just to name a few. When parties are confronted with a dis-
pute, they should be cognizant of all dispute resolution techniques, and
some of the methods through which those techniques are facilitated, in
order to find the best means of resolving their dispute.
1994] ARBITRATION BY THE AAA

APPENDIX
292 NORTH DAKOTA LAW REVIEW [Vol. 70:281

American Arbitration Association

MEDIATION Pleaseconistllthe applicable mediation rulesregarding mediation procedures If you ittn theAAA to contact theoihe
party and attempt to arrange a mediation, please check this box. -'
ARBITRATION RULES.
(Fill in the nae of tw applkolbkmInd.)

DEMAND FOR ARBITRATION

DATE:

TO: Name
(of the party upon whomtie detand is made)
Address
City and State ZIP Code
Telephone ( ) Fax

Name of Representative
Representative's Address
City and State ZIP Code
Telephone ( ) Fax
The named claimant, a party to an arbitration agreement contained in a written contract, dated __
providing for arbitration under the
Arbitration Rules, hereby demands arbitration thereunder.
(Attach the arbitration clause or quote it hereunder.)

NATURE OF DISPUTE:

CLAIM OR RELIEF SOUGHT: (amount, if any)

TYPE OF BUSINESS: Claimant Respondent

HEARING LOCALE REQUESTED: (City
andState)

You are hereby notified that copies of our arbitration agreement and of this demand are being filed with the
American Arbitration Association at its
office, with the request that it commence the administration of the arbitration. Under the rules, you may file an answering
statement within ten days after notice from the administrator.
Signed (my besignedby a representative)
Title_____________

Name of Claimant
Address (to be usedin connectionwith this cse)
City and State ZIP Code
Telephone ( ) Fax
Name of Representative
Representative's Address
City and State ZIP Code
Telephone ( ) Fax
To institute proceedings, please send three copies of this demand with the administrative fee, as provided in the
rules, to the AAA. Send the original demand to the respondent.
- If you hae a qaiuon usto which rIn apply, pleasecontact the AAA. Forn 02-2/9
1994] ARBITRATION BY THE AAA 293

- AmericanArbitration Association
SUBMISSION TO DISPUTE RESOLUTION

Date:

The named parties hereby submit the following dispute for resolution under the
Rules* of the American Arbitration Association:
Procedure Selected: 0 Binding arbitration 0 Mediation settlement
0 Other
(Deswibe)

FOR INSURANCE CASEs ONLY:

to
Policy Number Effective Dates Applicable Policy Limits

Date of Incident Location

Insured: Claim Number:

Name(s) of Claimant(s) Check If a Minor Amount Claimed

El
Nature of Dispute and/or Injuries Alleged (attach additional sheets if necessary):

Place of Hearing:

We agree that, if binding arbitration is selected, we will abide by and perform any award rendered hereunder
and that a judgment may be entered on the award.
To Be Completed by the Parties

Name of Party Name of Party

Address Address

City, State, and ZIP Code City, State,and ZIP Code

Telephone Fax Telephone Fax

Signaturet Signaturet

Name of Party's Attorney or Representative Name of Party's Attorney or Representative

Address Address

City, State, and ZIP Code City, State,and ZIP Code

Telephone Fax Telephone Fax

Signature" Signature"
Pleasefile three copies with the AAA.
If yes hae a questio- at to ehichrslesapply, piat contaettheAAA.
Signatures of all partiet t rquited fon arbitration. Fon- G1-gi91
294 NORTH DAKOTA LAW REVIEW [Vol. 70:281
COMMERCIAL ARBITRATION UPDATE/SEPTEMBER 1993-
"Do Arbitrators Compromise?"
(reprinted by the North Dakota Law Review)
The AAA recently conducted a survey of construction awards to determine whether arbitrators
compromise when deciding cases. The survey included all commercial arbitration cases which
reached an award from January 1992 through December 1992. The following types of cases are
included in the survey:
Construction Securities
Franchise Entertainment
Real Estate Commission on Sales
Employment Contract Shareholder
Computer Partnership
Equipment Leasing Home Owner Warranty
Textile Banking
Patent, Licensing & Trademark
The survey included 4223 cases. Only those cases in which the dollar amounts (claimed and or
counterclaimed and awarded) were clearly stated were tabulated.
The chart below indicates the specific ranges of the arbitrators' decisions on claims:

% of Claims Awarded # of Cases PerCent

80- 100 1088 26
60-79 434 10
40-59 452 11
20-39 507 12
1 - 19 448 10
Claim denied 1294 31

The results indicate that in 26% of the cases, the arbitrator awarded 80 to 100% of the claim while 1
to 19% of the claim was awarded in 10% of the cases. Only 11%of the claims fell in the 40 to 59%
category.
The chart below indicates the specific ranges of the arbitrators' decisions on counterclaims:

% of Claims Awarded # of ses Per Cent

80- 100 55 5
60-79 45 4
40 -59 62 6
20-39 81 7
1 - 19 96 9
Claim denied 763 69

The results also indicate that in 69% of the 1102 cases with counterclaims, the arbitrator totally
denied monetary relief on the counterclaim. Eighty to 100% of the claim was awarded in 5% of the
cases. Only 6% of the cases fell within the 40 to 59% category.
The data indicates that, in the vast majority of cases, arbitrators tend to decide clearly in favor of one
party or the other.
For further details regarding commercial arbitration, CONTACT:

Robert E. Meade,
Vice President, Program Development
American Arbitration Association
140 West 51st Street
New York, NY 10020
(212) 484-4060