American Arbitration Association (AAA)

Subscribe to American Arbitration Association (AAA)

The choice of arbitration institution can arise at any point in an investment cycle: from finalising initial agreements at fund or portfolio company level, or on an ad hoc basis when a dispute arises.

To help demystify some differences – this article sets out the key features of three commonly used international arbitration regimes that an asset manager should take into account when making such a choice.

When a litigant seeks to compel arbitration pursuant to the Federal Arbitration Act (“FAA”), there are two issues that must be resolved: (1) whether there is an agreement to arbitrate; and, if so, (2) whether the dispute at issue falls within the scope of the arbitration agreement.  The Florida Supreme Court’s recent decision in Airbnb, Inc. v. Doe, deals with who decides this second issue—the court or an arbitrator.

In Airbnb, a couple sued Airbnb and Wayne Natt (the property owner) for issues arising out of their stay at Natt’s condominium, which was listed for rent on Airbnb’s website.  Airbnb moved to compel arbitration, arguing that the couple was required to arbitrate their claims because Airbnb’s Terms of Service included an arbitration provision that integrated the AAA Rules.  All parties agreed that the couple was bound by the arbitration agreement—the issue then became whether the court or the arbitrator should decide if the couple’s claims against Airbnb were arbitrable.