The Language Used In An Arbitration Provision Matters

Although I have long since forgotten the genesis, I learned many years ago that the safest way to ensure an arbitration provision would capture the full scope of contractual matters between the parties was to use the incantation “all disputes arising out of or relating to the agreement.” Dave Reif’s most recent discussion of arbitration and mediation decisions confirms the importance of a belt and suspenders approach. He discusses Aryze, LLC v. Sweig, in which the U.S. District Court in Massachusetts was presented with a contractual arbitration provision that only went halfway, as it provided that “[a]ny disputes between the parties arising from this Agreement will be settled through binding arbitration…” (emphasis added). Dave’s post describes how the court “parses in detail each count of the parties’ arbitration claim,” mandating arbitration of claims that, in the court’s words, “undoubtedly involve construction of the Agreements’ provisions,” however rejecting those that do not since the arbitration “provision does not mean that any claim brought by Defendants … related to their business relationship must be arbitrated.” 

The takeaway for contract drafters seeking to provide for arbitration of the widest universe of contractual matters: don’t be stingy with the contract language; belt and suspenders works where one alone may not.

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