DOJ Merger Challenge Makes Unprecedented Use Of Arbitration To Determine Market Definition

The Situation:The U.S. Department of Justice ("DOJ") has sued to block a proposed acquisition of Aleris Corporation by Novelis Inc. In an unprecedented move, the parties and DOJ agreed to refer the "dispositive" issue of product market definition to binding arbitration.

The Significance: DOJ's willingness to consider arbitration in antitrust matters could prove to be a positive development for companies (and for the government) to the extent it creates an avenue for faster resolution of critical issues without having to incur the time and expense to litigate all issues in court. The identity and background of the arbitrator may be even more important to this process than a federal judge who is chosen by random draw.