In what can only be described as “Arbitration Hell,” a recent Minnesota Court of Appeals decision dramatically illustrates the serious risks that businesses face when they turn their disputes over to an arbitrator whose authority to make rulings and impose sanctions is virtually unlimited.
It is important to note that the recent Minnesota Court of Appeals decision in Seagate Technology v. Western Digital is not a departure from existing law. The Appellate Court’s decision is consistent with and supported by existing law. What makes reading the Seagate decision so frightening is the realization that there is effectively no limit on an arbitrator’s power under the most commonly used arbitration clauses.
