2006/Vol. 5 No.1 - Hamline Law - Hamline University

2006] ARBITRATION: THE BASICS 19
arbitration agreement, the parties agreed to submit their dispute to
arbitration—a process in which their disputes should be decided fairly by
a neutral third party. 74 By promulgating such one-sided arbitration rules,
Hooters breached the sense of fundamental fairness in its agreement to
arbitrate. 75 The American Arbitration Association has issued a “Due
Process Protocol” refusing to administer such disputes with these types
of “unfair” arbitration clauses. 76
V. INITIATING THE ARBITRATION
Most arbitration agencies simplify the process by handling most of
the preliminary matters. For example, the American Arbitration
Association will notify the other party of the initiation of the arbitration
proceeding, 77 will assign an arbitrator if the parties cannot agree, 78 will
notify the arbitrator that the arbitrator has been chosen, 79 and will assist
in arranging a time and place for the parties to meet. 80 Simplicity and
ease of use of the process are two of the reasons arbitration is used. 81
But a party can forfeit the right to arbitration if the party fails to take
affirmative steps to initiate arbitration. 82
agreement upon thirty days notice. Id. Perhaps most egregiously, Hooters could
change the rules without notice at any time, even during the arbitration proceeding.
Id.
74. Id. at 940.
75. Id.
76. American Arbitration Association, supra note 42, at Principle 1.
77. AAA Rules, supra note 37, R-4.
78. Id. R-11.
79. Id. R-2
80. Id. R-9, R-10, R-22.
81. JULIAN D. M. LEW, LOUKAS MISTELIS & STEFAN M. KRÖLL, COMPARATIVE
INTERNATIONAL COMMERCIAL ARBITRATION 36-41 (Kluwer Law Int’l 2003).
82. See, e.g., CAL. BUS. & PROF. CODE § 6201(a) (2004) (stating that, in
disputes involving attorney fees, “the client’s failure to request arbitration within 30
days after receipt of notice from the attorney shall be deemed a waiver of the
client’s right to arbitration under the provisions of this article”); ME. REV. STAT.
ANN. tit. 23, § 52-A (2004) (In contract disputes between a contractor and a
subcontractor, “failure to submit [the claim] to arbitration as provided under this
subsection shall constitute a waiver of the claim”); see also Engalla v. Permanente
Med. Group, Inc., 938 P.2d 903, 909 (Cal. 1997). In Engalla, the defendant, Kaiser,
administered its own arbitration program. Id. The arbitration agreement provided
for three arbitrators and each party was to select one arbitrator of its own choosing
within thirty days of initial service on the respondent. Id. Within an additional
thirty days, the two party-appointed arbitrators were to jointly select a neutral