In April 2015, Delaware Governor Jack Markell signed into law one of the most highly specialized arbitration statutes ever passed: the Delaware Rapid Arbitration Act (hereafter the “Act” or the “DRAA”). The Act, a response to the request by Delaware’s corporate citizenry for a modern and useful arbitration statute, is the work of an interdisciplinary team of arbitration practitioners from Delaware, New York, Washington and abroad, led by Delaware’s Chief Justice Leo E. Strine, Jr., Delaware’s Chancellor Andre G. Bouchard and Delaware’s Secretary of State Jeffrey Bullock.

Developed through extensive consultation with leading U.S. and foreign arbitration specialists, the Act is intended to capture the best practices of the leading international arbitration chambers while also addressing key complaints about arbitration voiced by Delaware’s corporate citizenry. The Act was built upon Delaware’s earlier (now enjoined) experiment with prompt, confidential court-annexed arbitration, preserving the best features of that experiment and adding to its strengths in several ways. While respecting the parties’ contractual decisions throughout, the Act also innovates to make commencing an arbitration a speedy and inexpensive process, accelerates the arbitration itself to ensure a swift resolution, does away with confirmation proceedings altogether, and provides for either contractual appeals or challenges directly to the Delaware Supreme Court.

The Act is not designed to preempt more “traditional” arbitration proceedings. Indeed, the drafters of the Act understood what the practitioner needs to understand most clearly: arbitration under the Act is a speedy, specialized proceeding for prompt and confidential business dispute resolution. It is not suitable to parties who are not willing to move to speedy resolution of a dispute.

Nor is it suitable to parties seeking to retain “optionality” in arbitral proceedings, such as the right to challenge the scope of the arbitrator’s authority, slow the proceedings with interim challenges to the arbitrator’s rulings, or grind the proceedings to a halt with motions and other disputes.

Instead, those who opt to proceed under the Act do so with a clear understanding that their arbitrator, whether selected by the parties or appointed by Delaware’s Court of Chancery, will have broad powers to rule on the scope of the arbitration itself as well as on his or her own authority. The arbitrator will have the authority to grant a full panoply of injunctive and other remedies and, unless the parties contract for a broader appeal, will be subject to only the most limited standard of review in any challenge. In short, those who determine to proceed under this Act do so with the understanding that they are asking for prompt and efficient resolution of their disputes, and that they will get such resolution with only minimal review of the arbitrator’s decisions. Delaware’s “rapid” arbitration statute is meant to be just that.

In response to comments from general counsel of large companies based around the world, the Act returns arbitration to its long-lost roots: speedy, efficient and binding resolution of disputes, stripping away the various mechanics of delay that have built up over the last 50 years of practice. Make no mistake: the DRAA is not for the faint of heart or for those who would seek to use disproportional leverage to their favor in the event of a dispute. Instead, the Act is designed to address resolution of disputes where the parties most need no-nonsense and swift resolution (for example, in the case of ongoing business relationships that can’t abide drawn-out litigation).

The purpose of this handbook is to assemble in one place what the practitioner needs to know to proceed under the Act, including the dispute resolution forums necessary to invoke the DRAA, practical guidance based on the authors’ direct experience with the prior Delaware arbitral regime, and insight into the drafting of the Act and the Model Rules that accompany it.

Read original article


Tags: