“Third Circuit Reverses District Court Order Compelling Arbitration, Highlighting That Arbitration and ‘Expert Determinations’ Are Different Forms of Dispute Resolution

Kenneth Cesta of Carlton Fields has authored this article, available in JD Supra, discussing the Third Circuit’s decision in Sapp v. Industrial Action Services, LLC. The court was confronted with a provision similar to those often found in financial transactional documents, delegating the determination of disputes regarding monetary calculations to an accounting firm. The question for the court in Sapp was whether the contractual delegation constituted an agreement to have the accountants serve as arbitrators, or as experts in support of litigation of the dispute. The Third Circuit overruled the lower court’s determination that the provision constituted an arbitration agreement, and thus vacated the court’s order compelling arbitration.