When deciding whether to initiate arbitration proceedings with the American Arbitration Association (“AAA”), one of the key and essential issues which must be considered by the filing party is whether a valid, enforceable arbitration agreement exists.
Under Michigan law, a party cannot be compelled, or forced, to participate in arbitration proceedings if that party has not entered into an agreement to arbitrate. AT&T Techs. v. Communs. Workers of Am., 475 U.S. 643, 648-649 (1986); United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960); Granite Rock Co. v. Intl. Broth. of Teamsters, 561 U.S. 287, 289 (2010) (broad policy favoring arbitrability cannot force parties into arbitrating claims which they never agreed to arbitrate); Clinton Tp. v. Contrera, 92 Mich. App. 297, 304 (1979) (arbitrability of an issue requires the existence of an agreement in a contract between the parties). It is also the exclusive jurisdiction of the court to decide whether a valid, enforceable arbitration agreement exists between the parties and if certain claims fall within the scope of a subject agreement to arbitrate. Huntington Woods v. Ajax Paving Indus., 196 Mich. App. 71, 74 (1992).
Further, before a party initiates arbitration proceedings in Michigan, one must also consider, and review, the Michigan Uniform Arbitration Act, MCL 691.1681 et seq. (“MUAA”), which after July 1, 2013, governs an arbitration agreement whenever it is made. MCL 691.1683. Section 6 of the MUAA also states that the “court shall decide whether an agreement to arbitrate exists or if a controversy is subject to an agreement to arbitrate.” MCL 691.1686(2).
As shown above, a party must take great care in considering whether to initiate arbitration proceedings with the AAA to ensure that the party is not attempting to force another party to participate in arbitration proceedings where a valid, enforceable arbitration agreement does not exist.