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Legal Memorandum: Failure to Consent or Request Arbitration

Issue: IN THE VIRGINS ISLANDS, WHETHER A DEFENDANTS’ MOTION TO COMPEL ARBITRATION SHOULD BE DENIED BECAUSE IF A DEFENDANTS FAILED TO REQUEST ARBITRATION.

Area of Law: Alternative Dispute Resolution, Litigation & Procedure
Keywords: Arbitration; Procedural requirements; Party's consent to arbitration
Jurisdiction: Federal, Virgin Islands
Cited Cases: None
Cited Statutes: 24 V.I.C. § 74a(a)
Date: 11/01/2005

The plain reading of 24 V.I.C. § 74a(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.  As is true of the substantive portion of the statute, the procedural requirements imposed by 24 V.I.C. § 74a(a) also are not preempted by the FAA.  The FAA imposes no policy favoring arbitration under a particular set of procedural rules.  Sec. Ins. Co. v. TIG Ins. Co., 360 F.3d 322, 325 (2d Cir.) (quoting Volt Info. Sciences, Inc. v. Bd. of Trustees, 489 U.S. 468, 476 (1989)), cert. denied, 125 S. Ct. 90 (2004)).  Thus, a state procedural rule that does not limit the parties’ right to arbitrate or the arbitrator’s power to resolve a dispute—such as a choice-of-law provision or a rule giving the court the power to stay an arbitration—and “does ‘not affect the enforceability of the arbitration agreement itself,'” id. at 327 (quoting Doctor’s Assocs., 517 U.S. at 688), the procedural rule is not preempted by the FAA, id.

            The statute provides that parties who wish to apply arbitration agreements in the Virgin Islands must fulfil a two-part requirement:  the party initiating arbitration must submit a written request, and the other party must consent.  Fair, mutually agreed-upon contracts to arbitrate are not precluded, but employers in the Virgin Islands may not force employees to sign arbitration agreements as a condition of employment. 

Applicable […]

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