I am an Arbitrator with the American Arbitration Association.  I am also an
attorney who has practiced in intellectual property and business litigation
and arbitration [including disputes involving members of the PCB
industry] before the American Arbitration Association and the ICC Court of
Arbitration for the past 25 years. To answer your questions:

1. The AAA charges a nominal fee at the beginning of the arbitration to
cover the administrative charges. This fee is paid by the party that
initiates the arbitration. If the other side has a counterclaim, than they
must pay a fee on the same basis. The American Arbitration Association
maintains a web site which contains their fee schedule and a lot of useful
information: http://www.adr.org

2. Generally, half of the anticipated costs of the AAA and the arbitrator
are paid by each side before the arbitration hearing begins. Generally, the
arbitrator will order the losing party to pay for the costs of arbitration.
[This will benefit the prevailing party only if the losing party pays
voluntarily or after a judgment is entered on the award.] This should
generally be made an express provision in the arbitration agreement.
However, the general rule is that each side must pay its legal fees and
costs in the arbitration, and you should consider adding a provision to your
contract that the prevailing party is awarded its costs and attorney's fees.

3. You do not have to pay the AAA to include an arbitration provision in a
contract. May I suggest that when drafting an arbitration provision, you
consider language about (a) where the arbitration takes place [you probably
do business with companies far distant from where you are located, and
should provide for arbitration near where you are located - these provisions
setting the location of the arbitration are generally upheld], (b) whether
the prevailing party in any arbitration pays for all costs, including the
costs and fees of the AAA and the arbitrator, and attorney's fees. In some
cases, it makes sense to stipulate whether the dispute will be decided by a
single arbitrator or a panel of three arbitrators. Having three arbitrators
is more expensive and time consuming, but may protect against the possible
bias of a sniggle arbitrator. The AAA tends to appoint 3 arbitrators in
large cases, so if you want to avoid against that expense, you should
stipulate to a single arbitrator selected by the AAA. The general procedure
for the selection of an arbitrator is that the AAA will send the parties a
list of candidates with their resumes, and each side ranks them in the order
they prefer, and the AAA will use those rankings to select try to select
someone that both sides prefer.

4. In my experience, arbitration frequently offers a faster and cheaper
alternative to litigation. However, there are some potential disadvantages.
For example, it may sometimes be in your interest to conduct pretrial
discovery of your opponent and third parties such as through compelling
documents and depositions. This is generally unavailable or limited in
arbitration, unless the parties agree. Also, you should understand that
while there are generally opportunities to appeal an adverse ruling in a
court, an arbitration award is extremely difficult to overturn, even if it
is highly erroneous, and some arbitrators may have undisclosed biases that
favor one side over the other.

Let me know if I can be of further assistance.

William E. Johnson
Telephone: (310) 557-0020
Fax: (310) 557-0607
[log in to unmask]


Date:    Wed, 4 Oct 2000 10:42:15 -0400
From:    "Kasprzak, Bill (esd) USX" <[log in to unmask]>
Subject: Re: Looking for Arbitrator

David:

Just curious, have you ever had to call in the AAA? (American Arbitration
Association, not the Automobile Assoc. of America) How do they get paid and
who pays? Do you have to pay the AAA to use this clause?

I never knew they existed. I thought that the only recourse was through
lawyers and the legal system.

Bill Kasprzak
Moog Inc.

P.S. Any comments on the Debate last night? A bit on the feisty side to say
the least. However, I did like what _____ had to say. (I don't wanna start
anything)

> -----Original Message-----
> From: David Fish [SMTP:[log in to unmask]]
> Sent: Tuesday, October 03, 2000 11:55 PM
> To:   [log in to unmask]
> Subject:      Re: [TN] Looking for Arbitrator
>
> We put the following in our purchase order boiler plate:
>
> (8) Any controversy or claim arising out of or relating to this contract,
> or the breach thereof, shall be settled by arbitration in accordance with
> the Commercial Arbitration Rules of the American Arbitration Association,
> and judgment upon the award rendered by the arbitrator(s) may be entered
> in any court having jurisdiction thereof.
>
>
> Weiner Mickey wrote:
>
>
>
>        Does IPC have a body which could help
>        to resolve issues between manufacturers and their customers.
>
>
>       Thanks
>        Mickey
>       Michael Weiner
>       Tel  (972-3) 9262937
>       Fax  (972-3) 9261803
>       <mailto:mickey.weiner>@ecitele.com
>

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