LD 1218
pg. 5
Page 4 of 94 An Act To Enact the Revised Uniform Arbitration Act Page 6 of 94
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LR 468
Item 1

 
U.S. at 474 (1989)) and quoted in Cassarotto, 517 U.S. 681, 685
(1996); and Cassarotto, 517 U.S. at 688 (quoting Scherk v.
Alberto-Culver Co., 417 U.S. 506, 511 (1974)). Arbitration
agreements may not be invalidated under state laws applicable
only to arbitration provisions. Id. The FAA will preempt state
law that does not place arbitration agreements on an "equal
footing" with other contracts.

 
During the course of its deliberations the Drafting
Committee considered at length another issue with strong
preemption undertones - the question of whether the RUAA
should explicitly sanction contractual provisions for "opt-in"
review of challenged arbitration awards beyond that presently
contemplated by the FAA and current state arbitration acts.
"Opt-in" provisions of two types are in limited use today. The
first variant permits a party who is dissatisfied with the
arbitral result to petition directly to a designated state
court and stipulates that the court may vacate challenged
awards, typically for errors of law or fact. The second type
of "opt-in" contractual provision establishes an appellate
arbitral mechanism to which challenged arbitration awards can
be submitted for review, again most typically for errors of
law or fact.

 
As explained in detail in Section B of the Comment to
Section 23, there were a number of reasons that resulted in
the decision not to include statutory sanction of the "opt-in"
device for expanded judicial review in the RUAA: (1) the
current uncertainty as to the legality of a state statutory
sanction of the "opt-in" device, (2) the "disconnect" between
the Act's purpose of fostering the use of arbitration as a
final and binding alternative to traditional litigation in a
court of law, and (3) the inclusion of a statutory provision
that would permit the parties to contractually render
arbitration decidedly non-final and non-binding. Simply
stated, the potential gain to be realized by codifying a right
to opt-into expanded judicial review that has not yet been
definitively confirmed to exist does not outweigh the
potential threat that adoption of an opt-in statutory
provision would create for the integrity and viability of the
RUAA as a template for state arbitration acts.

 
Unlike the "opt-in" judicial review mechanism, there are
few, if any, legal concerns raised by statutory sanction of
"opt-in" provisions for appellate arbitral review.
Nevertheless, as explained in the Section B of the Comments to
Section 23, because the current, contract-based view of
arbitration establishes that the parties are free to design
the inner workings of their arbitration procedures in any
manner they see fit, the Drafting Committee determined that
codification of that right in the RUAA would add nothing of
substance to the existing law of arbitration.


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