How Does the American Arbitration Association (AAA) Decide Where to Arbitrate Commercial Disputes?
The American Arbitration Association (AAA) is the nation’s largest provider of ADR services to commercial entities. In the early stages of a business arbitration, one of the most important issues that must be resolved is determining where exactly the arbitration hearing will actually take place. Here, our West Palm Beach arbitration attorneys explain the most important things you need to know about how the AAA determines where commercial disputes will be arbitrated.
The AAA Will Always Start By Looking to the Terms of the Contract
The location of commercial arbitration matters. In many cases, the parties to the arbitration will be companies that are from different cities, potentially even different states. In determining where a business arbitration will actually take place, the American Arbitration Association always starts by looking to the specific terms of the arbitration agreement.
Many commercial agreements contain mandatory pre-dispute arbitration provisions. If the arbitration clause explicitly states where the hearing should occur or if it lays out a process for how the location should be determined, the AAA will almost always abide by the terms of the agreement. The agreement controls the selection of the venue. If your company wants to ensure that arbitration will occur at a specific location, it is crucial that the arbitration clause includes an unambiguous provision stating that fact.
Resolving Conflicts: A City Will Be Designated in Accordance With AAA Rules
In some cases, the pre-dispute arbitration clause may not clearly articulate the location where the arbitration should be held. Alternatively, the parties may already be in dispute over where their commercial arbitration should take place. The AAA has a process in place for resolving these types of conflict. Specifically, the AAA considers the following six factors in choosing the proper location for the arbitration proceedings:
- The principal location of all parties involved;
- The primary location of relevant witnesses and documents;
- The relative costs that the selected location will impose on each party;
- The state or federal laws that are applicable to the commercial agreement;
- The place of any previous court proceedings relevant to the dispute; and
- The place of the actual performance of the agreement.
In considering all of these factors, the AAA will select a location that is most appropriate to hear the arbitration. Once again, if you want to ensure that any future commercial arbitration occurs at a specific location, it is essential that you include an enforceable provision in the underlying contract.
Speak to Our West Palm Beach, FL Arbitration Lawyers Today
At Pike & Lustig, LLP, our skilled West Palm Beach commercial arbitration attorneys are dedicated to offering solutions-oriented legal representation to businesses throughout South Florida. We have a deep understanding of commercial arbitration. To learn more about what our law firm can do for you and your company, please call us today. Our primary office is located in West Palm Beach. We also have an additional office location in Miami.