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Univ. of Toledo College of Law

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Friday, August 31, 2012

Court Rules that Delaware Chancellors Serving as Arbitrators is Unconstitutional

A federal district court ruled that a Delaware law that allows the Chancellors to conduct arbitrations in business disputes is unconstitutional.  The judge ruled that since the proceeding "is essentially a civil trial," the public has a right of access to the proceedings.  In arbitration the parties "still submit their dispute to a sitting judge acting pursuant to state authority, paid by the state, and using state personnel and facilities."  There have been six cases arbitrated under the law, but there is no public record of five of them.  The arbitrations, which cost a minimum of $12,000, were expected to be an additional source of revenue for the state.

The Chancellors named as defendants said that they would appeal the ruling, which put the United States at a competitive disadvantage in providing businesses with efficient methods for resolving business disputes.

NYTimes, Judge Rules Against Arbitration by a Delaware Court

WSJ, Delaware Arbitration Procedure Overturned

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Comments

Nice article! The delware chancellors serving the arbitrators is unconstitutional for the court rules that declare for dispute to a sitting judge acting pursuant to state authority, paid by the state, and using state personnel and facilities.

Posted by: Abilena | Sep 1, 2012 2:42:04 AM

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