Reinsurance Focus

The purpose of the Act is to provide Delaware businesses with the ability to resolve disputes within 120 days in a “cost-effective, and efficient manner, through voluntary arbitration conducted by expert arbitrators.” The Act streamlines the process for seeking court assistance with appointing arbitrators, if necessary, which may occur only in the Delaware Court of Chancery. The Act gives the arbitrator exclusive jurisdiction to determine the scope of the arbitration and to determine the type of relief, “including any legal or equitable remedy appropriate in the sole judgment of the arbitrator.” Only one direct challenge to the Delaware Supreme Court is authorized, and only the standards of the FAA are utilized on appeal. Among other limiting measures, the Act may not be used in controversies between businesses and consumers, in controversies in which parties have not expressly consented in writing to arbitration, and in controversies in which choice of Delaware law has not been expressly selected. To ensure rapid resolution of arbitrations, the Act contains a schedule for the reduction of the arbitrator’s fees depending upon the lateness of the award: (1) between 0 to 30 days late, the reduction is 25%; (2) between 30 to 60 days late, the reduction is 75%; and (3) greater than 60 days late, the reduction is 100%. While the arbitrator is required to issue a written award, there is no requirement that it be a reasoned award. Thus, the award can be as simple as “plaintiff wins.” Delaware House Bill No. 49 (eff. May 4, 2015).

This post written by Barry Weissman.

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