Arbitration clauses are commonly included in many different contracts, including corporate governance documents such as LLC operating agreements and shareholder agreements for closely-held corporations. The Federal Arbitration Act (FAA), the Georgia Arbitration Code and court decisions interpreting those statutes create a strong presumption in favor of arbitration.
Issues often arise, however, when a party that did not sign the arbitration clause (a “nonsignatory”) seeks to compel arbitration or is sought to be compelled to arbitration by a signatory party. Likewise, disputes can arise regarding whether certain types of tort claims are within the scope of an arbitration clause. Finally, whether the court or arbitrator should resolve such issues may become a dispute in and of itself. This article will explore these issues and provide practical advice for drafting arbitration clauses.
Compelling or Being Compelled
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