Arbitration – Appointment of Substitute Arbitrators


The Terminix International Co., et al v. Dauphin Surf Club Assoc., et al.; The Terminix International Co., et al. v. Stonegate Condominium Owners’ Assoc., et al., [Ms. 1200846, 1200854, May 13, 2022] __ So. 3d __ (Ala. 2022). The Court (Stewart, J.; Parker, C.J., and Bolin and Wise, JJ., concur; Sellers, J., concurs in the result) affirms the Mobile Circuit Court’s orders in separate actions appointing substitute arbitrators over the objections of Terminix International. Terminix contended that the designation of the National Arbitration Forum (“the NAF”) as the arbitrator was an “essential and integral” part of its agreement to arbitrate and that, therefore, the trial court erred in appointing substitute arbitrators. Ms. *7. In 2009, the NAF “was prohibited from participating in consumer arbitration as part of a consent judgment between the NAF and the Minnesota Attorney General.” Ms.*4.

The Court first explains “‘the fact that an arbitrator named in the arbitration agreement is unable to act as an arbitrator over the parties’ controversy does not necessarily void the arbitration agreement.’ Ex parte Warren, 718 So. 2d 45, 48 (Ala. 1998).” Ms. *10. The Court confirms the orders compelling arbitration because the contract provisions as a whole “tend to indicate that the primary and essential purpose of the arbitration agreement was to ensure that the parties’ disputes be resolved solely by binding arbitration and that the designation of NAF as the arbitrator was secondary to that purpose and not an integral part of the agreement.” Ms. *17.

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