Chapter 2 - § 2.2 • A BRIEF HISTORY OF ARBITRATION

• Jurisdiction: Colorado

§ 2.2 • A BRIEF HISTORY OF ARBITRATION

While arbitration has received a sharp burst of popularity in recent years, the process is not new. Thomas Oehmke, in his book Commercial Arbitration,⁵ sets forth the historical mileposts in the use of arbitration. These mileposts include:

1500 B.C. Earliest evidence of use of arbitration (Egypt).
1224 A.D. First recorded use of arbitration in English law.
1800s A.D. Pennsylvania passes precursor to first modern-type arbitration statute.
1854 A.D. Buchell v. Marsh, 58 U.S. 344 (1854), holds award will not be set aside for errors of law or fact.
1920 A.D. New York passes first modern arbitration statute.

The FAA was passed in 1925 to overrule the federal "judiciary's longstanding refusal to enforce agreements to arbitrate."⁶ Thus, at common law, the judiciary at best was reluctant to enforce contracts to arbitrate disputes.

On the other hand, Colorado has no such history of judicial hostility to arbitration agreements. Indeed, in 1861, the Colorado Territorial Legislature adopted the first Colorado arbitration statute.⁷

In 1875, in Perrigo Gold Mining & Tunneling Co. v. Grimes,⁸ the Supreme Court of the Colorado Territory determined that the parties' dismissal of a replevin action and submission of the dispute to arbitration concluded the replevin suit. The court noted that when the parties submit a dispute to arbitration, the court loses jurisdiction, and that the statute provided for the clerk of court to enter judgment upon an arbitration award.

The next year, in Schaefer v. Gildea,⁹ the Supreme Court of the Colorado Territory stated, "The decision of an arbitrator is binding after publication, and a parol award is good. . . . A parol award delivered to one party in the absence of the other is binding."¹⁰

In 1876, Article XVIII, § 3 was added to the Colorado Constitution:

It shall be the duty of the general assembly to pass such laws as may be necessary and proper to decide differences by arbitrators, to be appointed by mutual agreement of the parties to any controversy who may choose that mode of adjustment. The powers and duties of such arbitrators shall be as prescribed by law.

Thereafter, in Lee v. Grimes,¹¹ the court noted that its earlier decision in Perrigo Gold Mining & Tunneling Co. v. Grimes¹² held that the parties' submission of a replevin dispute to arbitrators would not discharge the sureties on the replevin bond. However, under the circumstances now presented, the court further held that the surety...