When two parties in an arbitration were unable to select a “mutually agreeable” arbitrator, the Massachusetts district court stepped in to handle the selection. The parties’ arbitration agreement provided that the parties would select a “mutually agreeable single arbitration with experience in commodity futures contracts for coffee, to preside over the arbitration.” While both parties proposed candidates, they were unable to agree on the arbitrator.
The Massachusetts Appeals Court has stated that, while Massachusetts General Laws chapter 251, section 3 permits the courts to enforce arbitrator selection clauses, it “only requires the court to appoint an arbitrator if the arbitration agreement at issues fails to specify a method for doing so.” The arbitration agreement at issue had a mechanism for arbitrator selection — it was the parties who could not find a “mutually agreeable” arbitrator. The court found that section 3 permits a court to appoint an arbitrator in such circumstances when “the arbitrator selection method set forth [in the] contract has ‘failed.'” Additional support for the court’s interpretation of Massachusetts law is found in section 5 of the Federal Arbitration Act and cases interpreting the statute.
Green Valley Trading Co. v. Olam Americas, Inc., No. 1:19-cv-11524 (D. Mass. Jan. 7, 2020).
