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CPR Model Master Dispute Resolution Agreements - Arbitration



AGREEMENT dated ____________________ between X Corporation and Y Corporation.

X Corporation and Y Corporation have entered into business agreements in the past and may well enter into further agreements hereafter. These agreements have taken the form of purchase orders, sales orders, negotiated contracts, or ___________________ (“Business Agreements”). Such agreements may lead to disputes that are not resolved by the regularly responsible persons in the normal course of business.

Both companies agree to resolve any future dispute arising out of or relating to any past or future agreement between them (the “Dispute”) in accordance with the procedures specified hereinbelow.

1. Negotiation  

When a Dispute has arisen and negotiations between the regularly responsible persons have reached an impasse, either party may give the other party written notice of the Dispute. In the event such notice is given, the parties shall attempt to resolve the Dispute promptly by negotiation between executives who have authority to settle the controversy and who are at a higher level of management than the persons with direct responsibility for the matter. Within [10] days after delivery of the notice, the receiving party shall submit to the other a written response. Thereafter, the executives shall confer in person or by telephone promptly to attempt to resolve the dispute. All reasonable requests for information made by one party to the other will be honored.

2. Mediation  

If the dispute has not been resolved by negotiation within [30] days of the disputing party’s notice, or if the parties have failed to confer within [30] days after delivery of the notice, the parties shall endeavor to settle the dispute by mediation under the CPR Mediation Procedure in effect on the date of this Agreement. Unless otherwise agreed, the parties will select a mediator from the CPR Panels of Distinguished Neutrals.

All negotiations and proceedings pursuant to paragraphs 1. and 2. are confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence and any additional confidentiality protections provided by applicable law.

3. Arbitration 

If the dispute has not been resolved by mediation as provided herein within [90] days of the initiation of such procedure, it shall be settled by binding arbitration in accordance with the CPR Rules for Non-Administered Arbitration in effect on the date of this agreement, by a sole arbitrator selected from the CPR Panel, except that if the amount in controversy exceeds $ ________, either party may opt for an arbitration conducted by three independent and impartial arbitrators, none of whom shall be appointed by either party; provided, however, that if either party will not participate in a mediation, the other may initiate arbitration before expiration of the above period. The arbitration shall be governed by the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. to the exclusion of state laws inconsistent therewith, and judgment upon the award rendered by the arbitrator(s) may be entered by any court having jurisdiction thereof. The place of arbitration shall be ______________. [The arbitrator(s) are not empowered to award damages in excess of compensatory damages, and each party hereby irrevocably waives any right to recover such damages with respect to any dispute between them resolved by arbitration.]

The statute of limitations of the State of __________________ applicable to the commencement of a lawsuit shall apply to the commencement of an arbitration hereunder, except that no defenses shall be available based upon the passage of time during any negotiation or mediation called for by the preceding sections of this Agreement.

4. Provisional Judicial Relief (Optional)  

A party may file a complaint at any time before an arbitrator(s) (has) (have) been selected to seek a preliminary injunction or other provisional judicial relief, if in its sole judgment such action is necessary. Despite such action the parties will continue to participate in the procedures specified in this Agreement.

5. Termination of Business Agreement  

This Agreement shall not be deemed a waiver of any right of termination under the Business Agreement out of which the Dispute arose. Unless either party has such a right and has exercised the same, each party shall continue to perform its obligations under such agreement pending resolution of the Dispute.

6. Governing Law  

The law governing the Business Agreement shall govern this Agreement.

7. Governing Agreement  

In the event of a conflict between the provisions of this Agreement and the dispute resolution provisions specified in any Business Agreement entered into before [or after] this Agreement, the provisions of this Agreement shall govern.

8. Termination of Agreement  

This Agreement may be terminated by either party on written notice to the other party as to Business Agreements entered into after such notice is given. Such termination shall not affect any Dispute under any Business Agreement between the parties entered into at any time before such notice was given.

    X Corporation
  by ___________________________
    Y Corporation
  by ___________________________
[Note: This form as drafted covers all disputes between the parties. The form may be modified to limit the negotiation, mediation or arbitration coverage to specified types of disputes, or to carve out certain types of disputes. The form also may be modified to cover only disputes arising out of future agreements between the parties.

If this form of agreement is adopted, it may be advisable to include a sentence in future business agreements to the effect that the master dispute resolution agreement between the parties shall apply as to any disputes arising under the business agreement.]