Source: Robin Roth, Senior Contracts Editor, Conferon, Inc.
E-Specs: May 13, 2002

Both meeting professionals and hotels regard arbitration as a cost effective and speedy alternative to litigation. It is private (there is no public record), informal (discovery is limited), there is more control over choosing a "judge" and it is less adversarial, which helps to preserve business relationships. The parties can control the process to some extent by adding provisions to the contract clause or modifying some of the rules when a dispute arises. For example, the confidentiality of proprietary information can be requested and issues subject to arbitration can be defined, as can the number of arbitrators and locale. Expedited arbitration procedures are also available.

An arbitration clause in a group facility contract will normally specify that arbitration be conducted using the Commercial Arbitration Rules. These are the most applicable rules for group facility contract disputes and avoids confusion since there are many categories of rules for different types of disputes, such as real estate, wills and trusts, construction industry, elections, employee benefits, patents, health care, and international.

The contract clause will often fix the locale since the Commercial Rules do not specify where the arbitration is to be held and one of the rules does state that the parties may mutually agree on the locale. The locale is not fixed even if language specifies that the arbitration will be conducted or the contract interpreted under the laws of a certain state. The site of choice for the facility is generally its own location, since it would involve no travel for facility personnel and local businesses may receive preferential treatment in such proceedings. It is more convenient for the group if the location is where they are located, for the same reasons, so a fair compromise is to state that the arbitration will be conducted in a neutral site.

Let us hear form you! If any of you have had firsthand experience with arbitration for a meetings-related issue, positive or negative, please write to us and we can include your experience as feedback in the next issue.

(Note: This information is not intended to be "legal advice." A qualified attorney should be consulted to review all contract issues.)