Chapter 7 - § 7.4 • DOES THE AGREEMENT CALL FOR "ARBITRATION" AS DEFINED WITHIN THE FEDERAL OR COLORADO ARBITRATION ACTS?

• Jurisdiction: Colorado

§ 7.4 • DOES THE AGREEMENT CALL FOR "ARBITRATION" AS DEFINED WITHIN THE FEDERAL OR COLORADO ARBITRATION ACTS?

There are many dispute resolution procedures — some of which are commonly called arbitration, and some of which the parties simply label "arbitration." However, the arbitration statutes do not apply to a dispute resolution procedure agreed to by the parties simply because the parties label it arbitration. Rather, the courts have developed the definition of the types of procedures that are governed by the arbitration statutes.

Federal law governs the determination of whether the dispute resolution procedure is "arbitration" for purposes of applicability of the FAA (see §§ 2.1.2, 3.7.2, and 3.8), and state law determines whether the dispute resolution procedure is arbitration for purposes of applicability of state arbitration law. In Salt Lake Tribune Publishing Co. v. Management Planning, Inc.,⁶⁸ the Tenth Circuit considered "whether a certain appraisal constituted an arbitration under the Federal Arbitration Act."⁶⁹ Reversing the trial court, the Tenth Circuit held that an appraisal procedure agreed upon by the parties did not constitute "arbitration," and therefore the FAA was not applicable to the agreement.

The Tenth Circuit, in a later decision in Salt Lake Tribune Publishing Co.,⁷⁰ made several important points:

• Federal law supplies the standard for determining whether the procedure is arbitration for purposes of the FAA.
• Federal law provides the definition of "arbitration" for purposes of the FAA. Congress intended by the passage of the FAA to ensure that state law would not undermine the arbitration agreement and intended uniformity of application throughout the states.
• State law governs the interpretation of the arbitration agreement. Central to any conception of classic arbitration is that the disputants empowered a third-party to render a decision settling their dispute — a definitive settlement.

Similarly, a dispute resolution clause may be within the scope of the FAA, even if the tribunal is by a religious body and "Holy Scriptures (the Bible) . . . [are] the supreme authority" for the arbitral process, except to the extent federal or state rules could not be superseded.⁷¹

There have been numerous decisions as to whether provisions in a contract (often insurance contracts) that call for determination of value of real or personal property are arbitration within the scope of the CRUAA or the FAA. If they are, all arbitration...