What's a Creative Party (Or Lawyer) To Do?

The Dilemma

For many years, creative-minded parties (and their lawyers) negotiating an arbitration agreement have taken advantage of an apparent loophole-or at least ambiguity-in the Federal Arbitration Act (Title 9, U.S. Code, Section 1, et. seq.). On the one hand, the FAA, in Section 10, imposes a strict standard allowing an arbitration award to be set aside only upon a showing of: (1) procurement of the award by fraud or corruption; (2) evident partiality by arbitrators; (3) prejudicial misconduct by arbitrators; or (4) arbitrators exceeding their powers. On the other hand, Section 1 of the FAA contains a general provision …


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