Source: Robin Roth, Senior Contracts Editor, Conferon, Inc.
E-Specs: July 11, 2004

Arbitration is regarded by meeting professionals and many hotels as a cost effective and speedy alternative to litigation. It is private (there is no public record), informal (discovery is limited), and there is more control over choosing a “judge.” It is relationship-friendly in that it is less adversarial and business relationships can be preserved. The parties can control the process somewhat by adding to the contract clause or modifying some of the rules when a dispute arises. For example, 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 usually specifies the rules that are to be used. The Commercial Arbitration Rules are most applicable to group facility contract disputes. This 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 states that the parties may mutually agree on the locale. The locale may be a different city or state than that whose laws are designated to interpret the contract. The site of choice for the facility is generally its own location, since that 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 from 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 legal issues.)