New legislation was recently passed in Delaware to provide a procedure for expedited arbitration of business disputes. The key features of the new law, called the Delaware Rapid Arbitration Act, include:

  • The decision of the arbitrator must be made within 120 days
  • Challenges to the arbitrator’s decision can only be made directly to the Delaware Supreme Court
  • The arbitrator decides issues of arbitrability (which is designed to avoid the multitude of disputes, often noted on these pages, in which a court is asked to determine if an issue is subject to arbitration.)
  • The Court of Chancery has limited authority in connection with the arbitration, and its role is limited, for example, to granting injunctive relief to enforce the arbitration process or to choose an arbitrator if the parties cannot agree to one. Otherwise the process is conducted by the parties with an arbitrator of their choosing.
  • Consumers are not eligible parties and one party must be a Delaware entity.
  • Parties must be signatories to an agreement that they will submit to arbitration under the new law (which precludes use of this new law via provisions in bylaws or charters.)