A powerful new tool now exists for companies seeking quick, efficient, and private resolution of business disputes. The Delaware Rapid Arbitration Act (DRAA), enacted in April 2015, streamlines the process for initiating arbitrations, sets tight deadlines for completion, automatically confirms awards without court intervention, and provides speedy and final resolution of challenges directly to the Delaware Supreme Court. And the DRAA cleverly ensures quick completion of the process by imposing financial penalties on the arbitrator if an award is not issued within 120 days of commencement, with very limited exceptions.

The DRAA is available for almost any dispute involving at least one business organized under Delaware law or with its principal place of business in Delaware. To invoke the act’s benefits, the parties need only agree in a signed writing that their arbitration will be governed by the DRAA. And true to its purpose as a business dispute resolution mechanism, it may not be used for consumer or homeowner disputes, nor is it available for most shareholder actions.

Decreasing Expense and Delay
The DRAA eliminates many of the strategies parties have used in the past to halt arbitration proceedings or impose unnecessary expense and delay. For example, under the DRAA, the arbitrator has exclusive power to determine the scope of the arbitration, and courts are divested of jurisdiction to enjoin the process or entertain interim challenges. Parties also are relived of the obligation to initiate legal proceedings to confirm their arbitration awards, as they are automatically confirmed within 20 days of the decision.

By default, challenges to an award are limited to direct appeal to the Delaware Supreme Court, constrained to the grounds set forth in the Federal Arbitration Act. The only alternatives available are arbitral appeals or no appeals at all, either of which may be available only if explicitly provided for in the arbitration agreement.

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