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Arbitration Carve-Out Clauses in Commercial and Consumer Secured Loan Transactions - Chapter 39 - AAA Handbook on Commercial Arbitration - 2nd Edition

Author(s): 
Donald Lee Rome
David M. S. Shaiken
Page Count: 
10 pages
Media Description: 
PDF from "AAA Handbook on Commercial Arbitration - 2nd Edition"
Published: 
September, 2010
Jurisdictions: 
United States
Practice Areas: 
Standard and Model Arbitration Clauses
Author Detail: 

Donald Lee Rome is a commercial arbitrator and mediator on the American Arbitration Association’s national panel of neutrals. His specialty is business and commercial cases. He can be reached by e-mail at d.rome@sbcglobal.net.

David M. S. Shaiken is a commercial arbitrator on the AAA’s national panel. He is also a litigator at David Shaiken LLC in Vernon, Connecticut, and concentrates on bankruptcy, commercial, and regulatory litigation. His e-mail address is dshaiken@davidshaiken.com.

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Description: 
 
I. Introduction
 
In this chapter we discuss the vindication of non-waivable statutory rights when a secured creditor exercises its remedies against real property and/or tangible personal property under mortgage foreclosure laws, replevin laws, or Article 9 of the Uniform Commercial Code. We are concerned with the specific situation in which a debtor and creditor have agreed to arbitrate disputes that may arise under the note, mortgage, security agreement, and/or other loan document with two important exceptions. The first exception is when a secured creditor takes steps to protect its rights by exercising statutory remedies against the collateral in a judicial proceeding, such as a foreclosure or replevin action.
 
The second exception is when the creditor seeks preliminary relief, such as a restraining order or injunctive relief, from a court in order to preserve the existence, location, condition, or productive use of the collateral (i.e., maintain the status quo). The creditor’s goal here is to prevent the debtor or other obligor from disposing of the collateral, or failing to maintain or operate it (assuming it is productive property) before the foreclosure or other action is completed.
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