Arbitration agreements are a popular means of resolving legal disputes confidentially and without the need for a costly court trial. However, there is a question that often arises: Can you assign an arbitration agreement?
The short answer is yes, you can assign an arbitration agreement. Typically, arbitration agreements are signed between two parties at the beginning of a business relationship, whether it be for employment, a commercial transaction, or the provision of services. However, as business relationships evolve and change, the parties involved may need to assign their respective rights and obligations to another party.
The assignment of an arbitration agreement occurs when one party transfers its rights and obligations to another party. The party receiving the assignment will then assume the position of the original party with regard to the arbitration agreement. This can include the right to initiate arbitration proceedings, the obligation to comply with the arbitration award, and the ability to enforce the arbitration agreement in court.
The assignability of arbitration agreements is not always explicitly stated in the agreement itself. However, under the Federal Arbitration Act, which governs arbitration agreements in the United States, arbitration agreements are generally considered to be assignable unless there is clear language in the agreement stating otherwise.
There are some potential issues that could arise when assigning an arbitration agreement. For example, the party receiving the assignment may be reluctant to assume the obligations associated with the agreement or may have different ideas about how to resolve potential disputes. Additionally, if the original parties are no longer in good standing with each other, assigning the arbitration agreement to a third party could complicate matters further.
In conclusion, assigning an arbitration agreement is possible and allowed under national law. The best way to ensure a smooth transition is to make sure the agreement explicitly states whether or not it is assignable and include any necessary language regarding the details of the assignment. If questions arise, it is always best to consult with a legal professional experienced in arbitration agreements.