Commercial Arbitration: Enforcement of an Agreement to Arbitrate Future Disputes, 5 J. Marshall J. of Prac. & Proc. 72 (1971)

The John Marshall Law Review, Dec 1971

By Peter R. Sonderby, Published on 01/01/71

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Commercial Arbitration: Enforcement of an Agreement to Arbitrate Future Disputes, 5 J. Marshall J. of Prac. & Proc. 72 (1971)

The John Marshall Journal of Practiceand Procedure [Vol. Commercial Arbitration: Enforcement of an Agreement to Arbitrate Future Disputes, 5 J. Marshall J. of Prac. & Proc. 72 (1971) Peter R. Sonderby Follow this and additional works at: http://repository.jmls.edu/lawreview Part of the Law Commons - Article 2 COMMERCIAL ARBITRATION: ENFORCEMENT OF AN AGREEMENT TO ARBITRATE FUTURE DISPUTES By PETER R. SONDERBY* INTRODUCTION Arbitration is a procedure whereby parties, by voluntary agreement, submit a dispute for binding determination to private unofficial persons of their own choice rather than to the regularly established tribunals of justice.1 Commercial arbitration is a types of agreements. specialized branch of arbitration dealing with disputes arising under sales, construction, shipping and a wide variety of other 2 According to its proponents, arbitration as a method of dispute settlement has a number of significant advantages over ordinary litigation. Those most commonly mentioned are: ( 1 ) it is faster and less expensive; (2) the availability of expert decision makers; ( 3 ) privacy, since arbitration proceedings are not a matter of public record; and (4) the avoidance of the hostility which destroys business and other intimate relationships when a dispute is litigated in the courts. 8 For these and other reasons, the parties to commercial and other types of contracts frequently include as part of their * Member of the Illinois Bar, associated with Chadwell, Keck, Kayser & Ruggles. A.B., University of Illinois, J.D., University of Illinois College of Law, Assistant Editor, University of Illinois Law Forum wherein he published two articles. Member, Order of the Coif. ISee M. DOMKE, COMMERCIAL ARBITRATION 1 (1968) [hereinafter cited as DoMKE]; F. KELLOR, AMERICAN ARBITRATION 4 (1948); K. Carlston, The Theory of the Arbitration Process, 17 LAw & CONTEMP. PROB. 631 (1952); W. Sturges, Arbitration - What Is It?, 35 N.Y.U.L. REv. 1031 (1960). 2 DOMKE ยง1.01 at 3. For detailed discussions of some of the specific uses of commercial arbitration, see Symposium: Arbitration and Antitrust, 44 N.Y.U.L. REv. 1069 (1969); G. Asken, Resolving Construction Contract Disputes Through Arbitration, 23 ARB. J. 116 (1969) : C. Bridge, Jr., Arbitration of Accident Claims, 54 ILL. B.J. 334 (1965) ; D. Collins, Arbitration and the U.C.C., 41 N.Y.U.L. REv. 736 (1966); R. Coulson, Family Arbitration - An Exercise in Sensitivity, 3 FAM. L.Q. 22 (1969); J. Dobkin, Arbitrability of Patent Disputes Under the United States Arbitration Act, 23 ARB. J. 1 (1968): M. Domke, ForeignTrade Arbitration,46 CHI. B. REC. 65 (1964); L. Kovin, Uninsured Motorist Arbitration Under the Illinois Statute. 21 ARB. J. 229 (1966) ; H. Rudnick. Arbitration of Disputes Between Franchisorsand Franchisees,55 ILL. B.J. 54 (1966); J. Sembower, Landlord-Tenant Arbitration, 24 ARB. J. 35 (1969); note, The Validity of Arbitration Provisions in Trust Instruments, 55 CALIF. L. REV. 521 (1967); note Arbitrationas a Means of Settling Disputes within Close Corporations, 63 COLUM. L. REv. 267 (1963) ; note Mandatory Arbitrationas a Remedy for Intra-Close CorporateDisputes, 56 VA. L. REv. 271 (1970). 3 S. Mentschikoff, Commercial Arbitration. 61 COLUM. L. REv. 846, 848-49 (1961); see C. Taeusch, Extra-judicialSettlement of Controversies, 83 U. PA. L. REv. 147 (1934). agreement a provision requiring arbitration of future disputes which may arise thereunder. 4 However, when a dispute does in fact arise, it is not uncommon that one of the parties (usually the one against whom a claim is asserted) decides that perhaps arbitration was not such a good idea after all and that the delays and uncertainties of litigation would be more desirable. In such a situation the party who wishes to arbitrate must find a means to compel the recalcitrant party to live up to the arbitration agreement. The purpose of this article is to provide a general survey of the formal legal means which are available to compel arbitration pursuant to an agreement to arbitrate future disputes and to point out some of the problems which may be encountered in attempting to utilize those means. HISTORICAL BACKGROUND A. At Common Law At common law arbitration was viewed with disfavor and this attitude persists today in some jurisdictions.- The origin of the common law attitude is generally attributed to a dictum of Lord Coke in 1609 in Vynior's Case., Involved there was an action of debt on a penal bond by Vynior against Wilde for the latter's breach of the bond for failing to submit a dispute to arbitration. At that time it was customary for the parties to arbitration agreements to post such bonds to insure compliance with the agreement and in accordance with the rule then prevailing, a judgment was awarded to the plaintiff for the full amount of the bond.7 Although entirely unnecessary to anything decided in the case Lord Coke nevertheless pointed out in his opinion that: If I s (...truncated)


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Peter R. Sonderby. Commercial Arbitration: Enforcement of an Agreement to Arbitrate Future Disputes, 5 J. Marshall J. of Prac. & Proc. 72 (1971), The John Marshall Law Review, 1971, Volume 5, Issue 1,