Arbitration Commercial and Industry-Specific Arbitration 2 — Questions and Answers
Question 1: What is 'franchise arbitration' and why do franchisors typically prefer it?
- Arbitration to resolve trademark disputes between franchises
- Mandatory arbitration of franchisee disputes with franchisors, often preferred by franchisors for consistency and confidentiality (Correct answer)
- Arbitration required by the FTC for all franchise agreements
- Government arbitration of franchise license applications
Correct answer: Mandatory arbitration of franchisee disputes with franchisors, often preferred by franchisors for consistency and confidentiality
Franchise arbitration resolves disputes between franchisors and franchisees, with franchisors preferring it for confidentiality, consistency across their system, and avoiding jury trials.
Question 2: In maritime arbitration, what organization administers most US domestic shipping disputes?
- ICC Maritime Division
- Society of Maritime Arbitrators (SMA) in New York (Correct answer)
- US Coast Guard Arbitration Office
- Federal Maritime Commission
Correct answer: Society of Maritime Arbitrators (SMA) in New York
The Society of Maritime Arbitrators (SMA) in New York administers most US domestic maritime arbitrations, including charter party and cargo disputes.
Question 3: What is 'employment arbitration' under the Federal Arbitration Act following the Supreme Court's ruling in Epic Systems Corp. v. Lewis (2018)?
- Individual employment arbitration agreements with class action waivers are unenforceable
- Individual employment arbitration agreements with class action waivers are generally enforceable under the FAA (Correct answer)
- Employment disputes are excluded from FAA coverage entirely
- Class arbitration is always available regardless of the agreement
Correct answer: Individual employment arbitration agreements with class action waivers are generally enforceable under the FAA
In Epic Systems (2018), the Supreme Court held that employment arbitration agreements requiring individual arbitration and waiving class actions are enforceable under the FAA.
Question 4: What are 'insurance arbitration' provisions commonly used to resolve?
- Disputes between insurance regulators and carriers only
- Coverage disputes between policyholders and insurers, reinsurance disputes, and subrogation claims (Correct answer)
- State licensing disputes for insurance agents
- Premium rate-setting disputes with state insurance commissioners
Correct answer: Coverage disputes between policyholders and insurers, reinsurance disputes, and subrogation claims
Insurance arbitration resolves coverage disputes, reinsurance disagreements, and subrogation claims, with reinsurance arbitration being particularly common and specialized.
Question 5: What is 'statutory arbitration' as distinct from contractual arbitration in the US?
- Arbitration administered by federal courts
- Arbitration mandated by statute for specific types of disputes, such as securities or labor claims (Correct answer)
- Arbitration where the FAA does not apply
- Arbitration where all discovery rules follow the Federal Rules of Civil Procedure
Correct answer: Arbitration mandated by statute for specific types of disputes, such as securities or labor claims
Statutory arbitration is required or provided for by legislation for specific dispute categories, such as FINRA arbitration for securities or no-fault insurance arbitration in certain states.
Question 6: In technology and IP arbitration, what makes these disputes particularly suited for arbitration over litigation?
- Technology disputes always involve international parties requiring the New York Convention
- The ability to select arbitrators with specialized technical expertise and maintain confidentiality of trade secrets (Correct answer)
- Technology disputes are excluded from federal court jurisdiction
- Arbitration is faster and always cheaper than litigation in technology cases
Correct answer: The ability to select arbitrators with specialized technical expertise and maintain confidentiality of trade secrets
Technology and IP arbitration allows parties to select arbitrators with specialized technical expertise and protect confidential trade secrets and proprietary information from public court records.
Arbitration Commercial and Industry-Specific Arbitration 2
What is 'franchise arbitration' and why do franchisors typically prefer it?