SENATE SUBSTITUTE NO. 2 FOR SENATE BILL NO. 425
AN ACT TO REPEAL CHAPTER 57, TITLE 10, DELAWARE CODE, TITLED' "ARBITRATION AND AWARD"; TO REPEAL SECTION 121, TITLE 19, DELAWARE CODE, TITLE D "ARBITRATION"; AND TO ADOPT A NEW CHAPTER 57, TITLE 10, DELAWARE CODE, TITLED "UNIFORM ARBITRATION ACT" PROVIDING FOR THE ARBITRATION OF CONTROVERSIES AND THE ENFORCEMENT OF WRITTEN AGREEMENTS TO SUBMIT CONTROVERSIES TO ARBITRATION.
Be it enacted by the General Assembly of the State of Delaware:
Section 1. Section 121, Chapter 1, Title 19, Delaware Code, is hereby repealed in its entirety.
Section 2. Chapter 57, Title 10, Delaware Code, is hereby repealed in its entirety, and in lieu thereof a new Chapter 57, Title 10, Delaware Code, is enacted with a new title and new provisions as follows:
CHAPTER 57. UNIFORM ARBITRATION ACT; SUBMISSION OF CONTROVERSIES TO ARBITRATION; WRITTEN AGREEMENTS FOR SUBMISSION OF CONTROVERSIES TO ARBITRATION TO BE VALID, ENFORCEABLE AND IRREVOCABLE; PROVISIONS APPLICABLE TO WRITTEN AGREEMENTS, WITH CERTAIN EXCEPTIONS, BETWEEN PRIVATE PARTIES AS WELL AS TO WRITTEN AGREEMENTS IN WHICH ONE OR MORE OF THE PARTIES IS THE STATE OF DELAWARE OR DEPARTMENTS AND AGENCIES THEREOF, OR POLITICAL DIVISIONS, CORPORATIONS OR OTHER DIVISIONS OF THE STATE OF DELAWARE, OR ONE OR MORE OF THE COUNTIES OR MUNICIPALITIES OR MUNICIPAL CORPORATIONS OF THE STATE OF DELAWARE, OR ANY OF THEIR AGENCIES, DEPARTMENTS OR DIVISIONS.
§ 5701. Effect of Arbitration agreement
A written agreement to submit to arbitration any controversy existing at or arising after the effective date of the agreement is valid, enforceable and irrevocable, save upon such grounds as exist at law or in equity for the revocation of any contract, without regard to the justiciable character of the controversy, and confers jurisdiction on the Chancery Court of the State to enforce it and to enter judgment on an award. In determining any matter arising under this Article, the Court shall not consider whether the claim with respect to which arbitration is sought is tenable, or otherwise pass upon the merits of the dispute. This Act also applies to arbitration agreements between employers and employees or between their respective representatives, except as otherwise provided in § 5728 hereunder.
§ 5702. Jurisdiction of the Court; applications to the Court; venue; statutes of limitations
(a) Jurisdiction of the Court; applications to the Court
The term "Court" means the Court of Chancery of this State, except where otherwise specifically provided. The making of an agreement described in § 5701 providing for arbitration in this State confers jurisdiction on the Court to enforce the agreement under this Act and to enter judgment on an award thereunder, except as provided in § 5718. Action shall be commenced by an initial complaint and shall be heard in the manner and upon the notice provided by law or rule of Court on any civil action. Notice of an initial complaint shall be served in the manner provided by law for the service of summons in an action.
An initial complaint shall be made to the Court with the Register in Chancery in and for the county in which the agreement provides the arbitration hearing shall be held or, if the hearings has been held, in the county in which it was held. Otherwise the complaint shall be filed with the Register in Chancery in the county where the adverse party resides or has a place of business or, if he has no residence or place of business in this State, to the Register in and for any county. All subsequent pleadings or applications for an order made under this Act shall be filed in the Court hearing the initial complaint unless the court otherwise directs.
(c) Limitation of time
If, at the time that a demand for arbitration was made or a notice of intention to arbitrate was served, the claim sought to be arbitrated would have been barred by limitation of time had it been asserted in a Court of the State, a party may assert the limitation as a bar to the arbitration on complaint to the Court as provided in § 5703 (b) or by way of defense in an existing case. The failure to assert such bar through complaint to the Court or by way of a defense in Court shall not preclude its assertion before the arbitrators, who may, in their sole discretion, apply or ,not apply the bar. Except as provided in § 5714 (a) (5) such exercise of discretion by the arbitrators shall not be subject to review by a Court on a complaint or on an application in an existing case to confirm, vacate or modify the award.
§ 5703. Proceedings to compel or enjoin arbitration; notice of intention to arbritrate
(a) Proceeding to compel arbitration
A party aggrieved by the failure of another to arbitrate may file a complaint for an Order compelling arbitration. Where there is no substantial question whether a valid agreement to arbitrate in this State was made or compiled with, and the claim sought to be arbitrated is not barred by limitation under § 5702 (c), the Court shall order the parties to proceed with arbitration. Where any such question is raised it shall be tried forthwith in said Court. If an issue referrable to arbitration under the alleged agreement is involved in an action or proceeding pending in the Court of Chancery in the State of Delaware, the application shall be made therein. If the application is granted, the order shall operate to stay the pending or any subsequent action, or so much of it as is referrable to arbitration. Any action or proceeding in any other Court of the State, involving an issue subject to arbitration, shall be stayed if an order for arbitration or a complaint or an application therefor has been made in the Court of Chancery under this Act or, if the issue is severable, the stay may be with respect thereto only.
(b) Application to enjoin arbitration
Subject to the provisions of subdivision (c) of this Section 5703, a party who has not participated in the arbitration and who has not been made or served with an application to compel arbitration may file its complaint with the Court seeking to enjoin arbitration on the ground that a valid agreement was not made or has not been compiled with or that the claim sought to be arbitrated is barred by limitation of § 5702 (c).
(c) Notice of intention to arbitrate
A party must serve upon another party a notice of intention to arbitrate, specifying the agreement pursuant to which arbitration is sought and the name and address of the party serving the notice, of or an officer or agent thereof if such party is an association or corporation, and stating that unless the party served applies to enjoin the arbitration within twenty (20) days after such service he shall thereafter be precluded from objecting that a valid agreement was not made or has not been complied with and from asserting in Court the bar of a limitation of time. Such notice shall be served in the same manner as a summons or by registered or certified mail, return receipt requested. A complaint seeking to enjoin arbitration must be made by the party served within twenty (20) days after service upon him of the notice or he shall be so precluded. Notice of the filing of such complaint shall be served in the same manner as a summons or by registered or certified mail, return receipt requested.
§ 5704. Appointment of arbitrators by Court
If the arbitration agreement provides a method of appointment of arbitrators, this method shall be followed. In the absence thereof, or if the agreed method fails or for any reason cannot be followed, or when an arbitrator appointed fails or is unable to act and his successor has not been duly appointed, the Court on Complaint or on application in an existing case of a party shall appoint one or more arbitrators. An arbitrator so appointed has all the powers of one specifically named in the agreement.
§ 5705. Majority action by arbitrators
The powers of the arbitrators shall be exercised by a majority unless otherwise provided by the agreement.
§ 5706. Hearing
Unless otherwise provided by the agreement:
(a) The arbitrators shall appoint a time and place for the hearing and cause notification to the parties to be served personally or by registered or certified mail, return receipt requested, not less than five (5) days before the hearing. Appearance at the hearing waives such notice. The arbitrators may adjourn the hearing from time to time as necessary and, on request of a party and for good cause, or upon their own motion may postpone the hearing to a time not later than the date fixed by the agreement for making the award unless the parties consent to a later date. The arbitrators may hear and determine the controversy upon the evidence produced notwithstanding the failure of a party duly notified to appear. The Court, on complaint or on application in an existing action, may direct the arbitrators to proceed promptly with the hearing and determination of the controversy.
(b) The parties are entitled to be heard, to present evidence material to the controversy and to cross-examine witnesses appearing at the hearing.
(c) The hearing shall be conducted by all the arbitrators but a majority may determine any question and render a final award. If, during the course of the hearing, an arbitrator for any reason ceases to act, the remaining arbitrator or arbitrators appointed to act as neutrals may continue with the hearing and determination of the controversy.
§ 5707. Representation by attorney
A party has the right to be represented by an attorney, and may claim such right at any time at any proceeding or hearing under this Act. A waiver thereof prior to the proceeding or hearing is ineffective. If a party is represented by an attorney, papers to be served on the party shall be served upon his attorney.
§ 5708. Witnesses, subpoenas, depositions
(a) The arbitrators may compel the attendance of witnesses and the production of books, records, contracts, papers, accounts, and all other documents and evidence, and shall have the power to administer oaths. An arbitrator and any attorney of record in any arbitration proceeding shall have the power to issue subpoenas in his own name. Subpoenas to issued shall be served by any sheriff, deputy sheriff, constable or other person, in the manner provided by law for the service and enforcement of subpoenas in a civil action and in accordance with the provisions of Title 10, Delaware Code, Chapter 21.
(b) On application of a party and for use as evidence, the arbitrators may permit a deposition to be taken, in the manner and upon the terms designated by the arbitrators, of a witness who cannot be subpoenaed or is unable to attend the hearing.
(c) All provisions of law compelling a person under Subpoena to testify are applicable.
(d) Fees for attendance as a witness shall be in accordance with Title 10, Section 8903, Delaware Code.
§ 5709. Award
(a) The award shall be in writing and signed by the arbitrators joining in the award. The arbitrators shall deliver a copy to each party personally or by registered or certified mail, return receipt requested, or as provided in the agreement.
(b) An award shall be made within the time fixed therefor by the agreement or, if not so fixed, within such time as the Court orders on complaint or application of a party in an existing case. The parties may extend the time in writing either before or after the expiration thereof. A party waives the objection that an award was not made within the time required unless he notifies the arbitrators of his objection prior to the delivery of the award to him. The arbitrators shall deliver a copy of the award to each party in the manner provided in the agreement, or if no provision is so made, personally or by registered or certified mail, return receipt requested.
§ 5710. Award by confession
(a) When available. An award by confession may be made for money due or to become due at any time before an award is otherwise made. The award shall be based upon a statement,
verified by each party, containing an authorization to make the award, the sum of the award or the method of ascertaining it, and the facts constituting the liability.
(b) Time of award. The award shall be made at any time within three (3) months after the statement is verified and has been served upon the arbitrators or the agency or person or persons named by the parties to designate the arbitrators. Such service shall be made personally or by registered or certified mail, return receipt requested.
(c) Persons or agency making award. The award may be made and entered on the judgment roll by the arbitrators or by the agency or person or persons named by the parties to designate the arbitrators.
§ 5711. Modification of award by arbitrators
On written application of a party to the arbitrators within twenty (20) days after delivery of the award to the applicant, or, if an application to the Court is pending under Sections 5713, 5714, or 5715, on submission to the arbitrators by the Court under such conditions as the Court may order, the arbitrators may modify or correct the award upon the grounds stated in paragraphs (1) and (3) of subdivision (a) of Section 5715, or for the purpose of clarifying the award. Written notice of such application to the arbitrators shall be given forthwith to the opposing party, delivered personally or by registered or certified mail, return receipt requested, stating that he must serve his objections thereto, if any, within ten (10) days from the date of the notice. The arbitrators shall dispose of any application made under this section in writing, signed and acknowledged by them, within thirty (30) days after either written objection to modification has been served on them or the time for serving such objection has expired, whichever is earlier. The parties may in writing extend the time for such disposition either before or after its expiration. The award so modified or corrected by the arbitrators is subject to the provisions of Sections 5713, 5714, and 5715.
§ 5712. Fees and expenses of arbitration
Unless otherwise provided in the agreement to arbitrate, the arbitrators' expenses and fees, together with other expenses, not including counsel fees, incurred in the conduct of the arbitration, shall be paid as provided in the award. The Court, on Complaint or on application in an existing case, may reduce or disallow any fee or expense which it finds excessive, or may allocate it as justice requires.
§ 5713. Confirmation of an award
The Court shall confirm an award upon Complaint or application of a party in an existing case made within one (1) year after its delivery to him unless within the time limits hereinafter imposed grounds are urged for vacating or modifying or correcting the award, in which case the Court shall proceed as provided in Sections 5714 and 5715.
§ 5714. Vacating an award
(a) Upon Complaint or application of a party in an existing case, the Court shall vacate an award where:
(1) The award was procured by corruption, fraud or other undue means;
(2) There was evident partiality by an arbitrator appointed as a neutral except where the award was by confession, or corruption in any of the arbitrators or misconduct prejudicing the rights of any party;
(3) The arbitrators exceeded their powers, or so imperfectly executed them that a final and definite award upon the subject matter submitted was not made;
(4) The arbitrators refused to postpone the hearing upon sufficient cause being shown therefor, or refused to hear evidence material to the controversy, or otherwise so conducted the hearing, contrary to the provisions of Section 5706, or failed to follow the procedures set forth in this Act, so as to prejudice substantially the rights of a party, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection; or
(5) There was no valid arbitration agreement, or the agreement to arbitrate had not been compiled with, or the arbitrated claim was barred by limitation under § 5702 (c), and the issue was not adversely determined in proceedings under Section 5703 and the party applying to vacate the award did not participate in the arbitration hearing without raising the objection;
But the fact that the relief was such that it could not or would not be granted by a Court of law or equity is not ground for vacating or refusing to confirm the award.
(b) An application under this Section shall be made within ninety (90) days after delivery of a copy of the award to the applicant, except that, if predicated upon corruption, fraud or other undue means, it shall be made within ninety (90) days after such grounds are known or should have been known.
(c) In vacating the award on grounds other than stated in clause (5) of Subsection (a) of this Section 5714, the Court may order a rehearing and determination of all or any of the issues, before new arbitrators chosen as provided in the agreement, or in the absence thereof, by the Court in accordance with Section 5704, or, if the award is vacated on grounds set forth in clauses (3) and (4) of such Subsection (a), the Court may order a rehearing before the arbitrators who made the award or their successors appointed in accordance with Section 5704. The time within which the agreement requires the award to be made is applicable to the rehearing and commences from the date of the order.
(d) If the application to vacate is denied and no motion to modify or correct the award is pending, the Court shall confirm the award.
§ 5715. Modification or correction of award by Court
(a) Upon Complaint or on application in an existing case made with ninety (90) days after delivery of a copy of the award to the applicant, the Court shall modify or correct the award where:
(1) There was an evident miscalculation of figures or an evident mistake in the description of any person, thing or property referred to in the award;
(2) The arbitrators have awarded upon a matter not submitted to them and the award may be corrected without affecting the merits of the decision upon the issues submitted; or
(3) The award is imperfect in a matter of form, not affecting the merits of the controversy.
(b) If the application is granted, the Court shall modify and correct the award so as to effect its intent and shall confirm the award as so modified and corrected. Otherwise, the Court shall confirm the award as made.
(c) An application to modify or correct an award may be joined in the alternative with an application to vacate the award.
§ 5716. Judgment of decree on award
Upon the granting of an order confirming, modifying or correcting an award, except in cases where the award is for money damages, a final judgment or decree shall be entered in conformity therewith and be enforced as any other judgment or decree. Costs of the application and of the proceeding subsequent thereto, and disbursements may be awarded by the court.
§ 5717. Judgment roll; docketing with Register in Chancery
(a) On entry of judgment or decree in cases other than an award for money damages, the Register shall prepare the judgment roll consisting, to the extent filed, of the following:
(1 ) The agreement and each written extension of the time within which to make the award;
(2) The award;
(3) A copy of the order confirming, modifying or correcting the award; and
(4) A copy of the final judgment or decree.
(b) The judgment or decree may be docketed as if rendered in an action.
§ 5718. Transfer of money damage award to Superior Court; lien on real estate
(a) Upon the granting of an order confirming, modifying or correcting award for money damages, a duly certified copy of the award and of the order confirming, modifying or correcting the award shall be filed with the Prothonotary of the Superior Court in the county where the arbitration was conducted and the award made. The Prothonotary shall enter in his judgment docket the names of the parties, the amount of the award, the time from which interest, if any, runs, and the amount of the costs, with the true date of such filing and entry. A confirmed award, so entered, shall constitute a judgment or decree on the docket with the same force and effect as if rendered in an action at law.
(b) Any confirmed award so transferred as authorized by subsection (a) of this Section, shall, from that date, become and be a lien on all the real estate of the debtor in the county, in the same manner and as fully as judgments rendered in the Superior Court are liens, and may be executed and enforced in the same way as judgments of that Court.
§ 5719. Appeals
(a) Appeals may be taken from:
(1) A final order denying a Complaint seeking to compel arbitration made under Section 5703 (a);
(2) An order granting an application to enjoin arbitration made under Section 5703 (b);
(3) A final order confirming or denying confirmation of an award;
(4) A final order modifying or correcting an award;
(5) A final order vacating an award without directing a rehearing; or
(6) A final judgment or decree entered pursuant to the provisions of this Act.
(b) The appeal shall be taken in the manner and to the same extent as from orders or judgments in a civil action.
§ 5720. Act not retroactive
This Act applies only to agreements made subsequent to the taking effect of this Act.
§ 5721. Uniformity of interpretation
This Act shall be so construed as to effectuate its general purpose to make uniform the law of those States which enact it.
§ 5722. Constitutionality
If any provision of this Act or the application therefor to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of the Act which can be given without the invalid provision or application, and to this end the provisions of this Act are severable.
§ 5723. Short title
This Act may be cited as the Uniform Arbitration Act.
§ 5724. Repeal
All Acts or parts of Acts which are inconsistent with the provisions of this Act are hereby repealed, except Title 14, Delaware Code, Section 4008 (c).
§ 5725. Death or incompetency of a party
Where a party dies after making a written agreement to submit a controversy to arbitration, the proceedings may be begun or continued upon the application of, or upon notice to, his executor or administrator, or, where it relates to real property, his distributee or devisee who has succeeded to his interest in the real property. Where a committee of the property or of the person of a party to such an agreement is appointed, the proceedings may be continued upon the application of, or notice to, the committee, Upon the death or incompetency of a party, the Court may extend the time within which an application to confirm, vacate or modify the award or to stay arbitration must be made. Where a party has died since an award was delivered, the proceedings thereupon are the same as where a party dies after a judgment or decree has been rendered.
§ 5726. Arbitration of contracts of State and Municipalities
On and after the date of this Act it shall be lawful to include in any contract hereinafter executed by or on behalf of the State of Delaware, or any Department or Agency thereof or by or on behalf of any County, Municipal corporation, or other division of the State of Delaware, a provision that any matter in dispute arising under the said contract shall be submitted to arbitration in accordance with this Act or such Sections thereof as may be set forth in such contract, except as provided in Section 5728 hereunder.
§ 5727. State and Municipal contracts
The provisions of this Act shall apply to any written contract to which the State of Delaware or any Agency or subdivision thereof, or any Municipal corporation or political division of the State of Delaware shall be a party, except as provided in Section 5728 hereunder.
§ 5728. Exclusion of collective bargaining labor contracts with public and private employers.
Notwithstanding anything contained in this Act by word or inference to the contrary, the provisions of this Act shall not apply to labor contracts with either public or private employers where such contracts have been negotiated by, or the employees covered thereby are represented by, any labor organization or collective bargaining agent or representative.
Section 3. This Act shall take effect sixty (60) days after enactment and approval by the Governor.
Approved April 30, 1972.