A recent decision by the United States Fifth Circuit Court of Appeals underscores the real concern regarding the proverbial “empty chair” in arbitrations: when parties tangentially or even directly involved in the circumstances of a claim cannot be compelled to arbitrate in a single arbitration. The case involved multiple parties and a series of arbitrations that resulted in conflicting awards.

The arbitration provision at issue incorporated the American Arbitration Association (AAA) Commercial Arbitration Rules (although the arbitrations were not administered by the AAA, per the agreement among the parties), which was pivotal in delegating significant questions to the arbitrators. In part, the appellate court addressed the enforceability of a contractually imposed four-month deadline to complete arbitration and the permissibility of simultaneous arbitrations, both of which were questions adjudged to have been delegated to the arbitrators. The arbitrators deemed the deadline “unconscionable” and also allowed multiple arbitration proceedings, demonstrating the broad discretion arbitrators possess under such agreements.