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Legal Memorandum: Arbitration Clause in a Contract

Issue: Under federal law as applied in the U.S. Virgin Islands, when is a party not entitled to arbitration despite the existence of an arbitration clause in the relevant contract?

Area of Law: Alternative Dispute Resolution, Employee Law
Keywords: Arbitration clause; Employment contracts
Jurisdiction: Federal, Virgin Islands
Cited Cases: None
Cited Statutes: 24 V.I.C. § 74a (2004);
Date: 11/01/2007

Title 24, § 74a of the V.I. Code provides as follows:

§ 74a   Arbitration

(a)        Notwithstanding an employment contract that provides for the use of arbitration to resolve a controversy arising out of or relating to the employment relationship, arbitration may be used to settle such a dispute only if:

(1)        the employer or employee submits a written request after the dispute arises to the other party to use arbitration; and

 

(2)        the other party consents in writing not later than sixty (60) days after the receipt of the request to use arbitration.

(b)        An employer subject to this chapter may not require an employee to arbitrate a dispute as a condition of employment.

24 V.I.C. § 74a (2004).  The plain reading of subpart (a) requires a party wishing to initiate arbitration to submit a written request to the other party after the dispute arises.  If the other party refuses to consent, the claims are not subject to arbitration.

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