Friday, November 05, 2010

arbitration - NAF no longer exists - motion to compel denied

ROBERT G. STEWART v. GGNSC-CANONSBURG, L.P., Superior Court of Pennsylvania - November 4, 2010

The Pa. Superior Court (an intermediate appellate court) affirmed the trial court decision denying the motion to compel arbitration. The trial court concluded that the Agreement was unenforceable because an essential term of the Agreement failed; that is, the arbitration forum selection clause designating the NAF and its procedures were integral to the Agreement and could not be enforced because the NAF was no longer available to act as arbitrators.

The opinion contains a review of cases on both sides of the issue of whether the naming of a particular arbitrator is an essential part of the agreement.

The court also held that "the forum selection clause was not an 'ancillary logistical concern, but rather an essential part of the parties’ agreement,' thereby justifying the Court’s decision to void the entire arbitration agreement