Is Arbitration In Bankruptcy Cases A Viable ADR Option?

 Bankruptcy practitioners are generally familiar with the significant growth that has been happening in the use of mediation as a means of resolving disputes within bankruptcy cases. In contrast, another dispute-resolution tool frequently used outside of bankruptcy — arbitration — is not often utilized in bankruptcy cases. There might be a variety of reasons for this — from the (mistaken) belief that arbitration is not available to parties within the confines of a bankruptcy case, to concerns about the use of such a tool in a forum designed to promote a centralized resolution for many parties.

The Bankruptcy Code and the Federal Rules of Bankruptcy Procedure (FRBP) do not prohibit the arbitration of disputes, but rather recognize arbitration as a viable option. Specifically, the FRBP contain a specific recognition of arbitration — Rule 9019 (c) — that states that "[o] n stipulation of the parties to any controversy affecting the estate the court may authorize the