SCOTUS will decide arbitration waiver issue
February 22, 2011 by Ross Runkel at LawMemo
Today the US Supreme Court granted certiorari in Stok & Associates v. Citibank.
The issue, as presented in the petition for certiorari:
Despite the prevalence of arbitration provisions, parties very frequently elect to waive their contractual right to arbitrate and instead seek to resolve their disputes in a court of law. Because this Court has yet to rule upon when such a waiver becomes binding, a broad and profound conflict has arisen in the Circuit courts as to whether a showing of prejudice is required to render such a waiver irrevocable. Therefore, it is necessary for this Court to answer the following inquiry:
Under the Federal Arbitration Act (“FAA”), should a party be required to demonstrate prejudice after the opposing party waived its contractual right to arbitrate by participating in litigation, in order for such waiver to be binding and irrevocable?
This case will be scheduled for oral argument some time in the Fall of 2011.
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