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New Proposed Delaware Rapid Arbitration Act Signed into Law
Practical Law Legal Update 8-608-5305 (Approx. 3 pages)
New Proposed Delaware Rapid Arbitration Act Signed into Law
by Practical Law Corporate & Securities
| Published on 09 Apr 2015 • Delaware |
The governor of Delaware signed into law the new Delaware Rapid Arbitration Act.
On April 2, 2015, proposed legislation, with one amendment, to create a new Chapter 58, Title 10 of the Delaware Code, entitled the "Delaware Rapid Arbitration Act" (DRAA) was signed into law by the governor of Delaware. The new chapter will provide an option for business entities formed in Delaware to resolve business disputes through voluntary arbitration conducted by expert arbitrators under strict timelines. Under the new chapter, arbitrations commenced under Chapter 58 must be completed within 120 days, with only one 60-day extension possible if all parties and the arbitrator agree. The new chapter will not be available for disputes:
- Between business entities and consumers of their goods and services.
- Involving persons who have not expressly agreed to arbitrate the matter at issue (such as public stockholders alleging a breach of fiduciary duties).
The amendment to the DRAA clarifies that it is not intended to apply to an agreement entered into by an organization representing residents or tenants of a residential community.
The DRAA will be effective 30 days after enactment.