What Happens When The Designated Arbitrator Is Unavailable

In Parm v. National Bank of California, N.A., Case No. 15-12509 (decided August 29, 2016), United States Court of Appeals for the Eleventh Circuit decided how a court should respond to an arbitration agreement when the arbitrator designated in the agreement does not exist.

The case arose out of a loan agreement between Parm and Western Sky Financial, LLC (Western Sky). Western Sky was a South Dakota limited liability company owned by a member of the Cheyenne River Sioux Tribe. The loan agreement provided for arbitration of all disputes and that the arbitration "shall be conducted by the Cheyenne River Sioux Tribal Nation by an authorized representative in accordance with its consumer dispute rules ...." Opinion, p. 3. Because the Tribe had no arbitrators, the district court refused to enforce the arbitration agreement. The Eleventh Circuit affirmed.