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Commercial Arbitration Rules

CAR - (1): Disputes Subject to These Rules

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These “Commercial Arbitration Rules” (the “Rules”) are intended to apply to those disputes which the parties have sought to arbitrate before ADR Systems of America (“ADR”) that are considered to be “commercial”. “Commercial” disputes are intended to exclude claims the thrust of which is a personal injury action, whether sounding in negligence, product liability, or otherwise. Claims of professional liability, except for those involving medical malpractice, are considered to be “commercial” and are subject to these Rules.

CAR - (2): Applicability of the Rules

By arbitrating this dispute before ADR, the parties will be deemed to have agreed that these Rules will govern the arbitration of their dispute. If ADR amends these Rules, the Rules in place on the date the Arbitration is commenced will be those which apply to that Arbitration, unless agreed to otherwise by the parties.

CAR - (3): Right of Parties to Vary Rules

The parties may agree to change or alter the procedures found in these Rules (except as to those relating to fees charged). Any agreement to vary these Rules must be in writing signed by all parties and provided to ADR.

CAR - (4): “Initiation” and “Commencement” of the Arbitration

A commercial arbitration will be initiated when ADR receives either: a) an ADR Arbitration Agreement executed by all of the parties; or b) an original and two copies of a written submission from a party setting forth its desire to initiate a commercial arbitration with ADR, the basis upon which ADR’s jurisdiction rests, and a statement setting forth the identity and last known addresses of the parties, the nature of that party’s claims, the amount of damages sought, and any other requested remedy (“Statement of Claim”). If the parties to that dispute have contractually agreed to use ADR’s services for the purposes of alternative dispute resolution, a copy of the applicable contract should also be included with the initial filing. The required filing fee must also be included with the initial submission. Upon receipt of the above materials and fee, ADR will confirm in writing to the parties that the arbitration has “commenced.”

CAR - (5): Response to Statement of Claim

The party who initiates the arbitration shall simultaneously serve, in accordance with CAR-(8), a copy of all documents filed with ADR upon each respondent to the claim. The claimant will provide proof of service to ADR. The initial Statement of Claim should contain sufficient detail to allow the opposing party and any arbitrator to understand the nature of the claim made. Within 21 days from the date of receipt of ADR’s confirmation of the commencement of the arbitration, as set forth in CAR-4, a respondent will file with ADR an original and two copies of its Answer (which will make a good faith effort to respond to the allegations set forth in the Statement of Claim) and Affirmative Defenses (which will likewise contain sufficient detail to allow the opposing party and any arbitrator to understand the nature of the defense raised), if any, to a Statement of Claim, including any defense that the claim is not subject to arbitration before ADR. A party that fails to file Affirmative Defenses will be precluded from raising any affirmative matter at the hearing of the dispute, including any defense that ADR does not have jurisdiction over a particular claim, without leave of the arbitration panel. The claimant is not required to reply to any Affirmative Defenses.

CAR - (6): Counterclaim

If any Respondent chooses to file a Counterclaim, an original and two copies of that Counterclaim should likewise be filed with ADR within 21 days from the date of service of the Statement of Claim. Any Answer, Affirmative Defenses, or Counterclaim should simultaneously be served upon the Claimant. The Counterclaim should contain sufficient detail to allow the opposing party and any arbitrator to understand the nature of the claim made. If a Counterclaim is filed, each respondent shall file an original and two copies of an Answer and Affirmative Defenses, if any, to that Counterclaim, including any defense that the counterclaim is not subject to arbitration before ADR, within 21 days of service. A party that fails to file Affirmative Defenses will be precluded from raising any affirmative matter at the hearing of the dispute without leave of the arbitration panel. The counter-respondent is not required to reply to any Affirmative Defenses. The appropriate fee for a Counterclaim must also be included with its filing.

CAR - (7): Prior Filed Court Pleadings

If a matter in litigation is referred to ADR for commercial arbitration, the parties may agree that prior filed court pleadings shall satisfy the pleading requirements set forth in these Rules.

CAR - (8): Extensions of Time Prior to Selection of Arbitration Panel

Prior to the selection of the Panel, any request for extension of time should be directed to the ADR assigned administrator in writing and, if not agreed, shall set forth a good faith basis for why the extension is needed. At all times prior to the selection of the arbitration panel, one of ADR’s designated “neutrals” (“the Designated Neutral”) will rule upon any request for a continuance, which decision shall be conclusive The designated neutral shall determine whether a response from the non-moving party is required.

CAR - (9): Service

A copy of any document filed by a party with ADR shall simultaneously be served upon each and every other party to the arbitration by first-class mail, personal service, overnight delivery or in a manner otherwise agreed to by the parties.

CAR- (10): ADR Administrative Conference

Within 35 days from the date of “commencement” of the arbitration, an ADR administrator will contact the parties to a commercial arbitration for the purpose of scheduling an initial telephonic conference. At that conference, the ADR administrator will review the status of the pleadings with the parties, the Rules, and be available to answer any questions that may exist relating to the arbitration.

CAR - (11): Selection of Arbitration Panel

Within 14 days from the filing of the last responsive pleading, ADR shall provide the parties with a list of proposed neutral arbitrators for the claim presented. Unless otherwise agreed, each commercial arbitration where all claims, including counterclaims, if any, seek less than $1,000,000 in compensatory damages (exclusive of interest, fees, and costs) will be heard by a arbitration panel comprised of one arbitrator. If the claims, including counterclaim, seek more than $1,000,000 (exclusive of interest, fees, and costs), the matter will be heard by an arbitration panel comprised of three arbitrators. The list will include a brief summary describing the background and qualifications of each proposed arbitrator. Within 14 days from service of this list, each party shall file with ADR a response ranking by number that party’s preference for each arbitrator. ADR shall then designate the arbitrator or arbitrators with the highest rated preference common between the parties to be the panelist(s) for that matter. If the parties fail to select the necessary number of common arbitrators, ADR will provide the parties with additional proposed arbitrators or it may select the arbitration panel, which selection will be deemed to be conclusive. A party is not required to serve its arbitrator preference list upon any other party. If a party fails to file a response relating to the selection of arbitrators within the time provided to do so, that party will be considered to have accepted all of the proposed arbitrators. If a panel of three arbitrators shall hear a matter, the parties may agree as to which arbitrator shall act as the chairperson or, if they cannot so agree, ADR shall select the chairperson for the arbitration.

CAR - (12): Arbitrator Disclosure

If any of the parties or their representatives has a relationship with any proposed arbitrators which could affect that proposed arbitrator’s ability to be impartial in his or her consideration of any party’s claims or defense, that relationship must be disclosed on the arbitration preference form described above. Similarly, if any proposed arbitrator believes that he or she has a relationship with any party or its representatives, or is aware of any other information that could affect or could create the appearance that it could affect the arbitrator’s ability to be impartial, that arbitrator shall disclose that information to ADR and ADR will communicate that information to the parties. Following the selection of the arbitration panel, ADR will request that each party submit to it an anticipated witness list for the hearing of the arbitration. ADR shall provide the filed witness list to the arbitration panel. If any arbitrator believes that he or she has a relationship with any witness, that arbitrator shall disclose that information to ADR and ADR will communicate that information to the parties. As a result of any disclosure required by this paragraph, the parties shall then have the right to object to the participation by an arbitrator and the ADR “Designated Neutral” shall rule upon that objection, which ruling shall be conclusive upon the parties

CAR - (13): Communication with an Arbitrator

No party shall, directly or indirectly, have any ex parte communication with an arbitrator. A copy of all correspondence to and from any arbitrator shall be provided to the assigned ADR administrator. An arbitration panel may order the parties to send any pleadings or other materials directly to the panel. The ADR assigned administrator is available to answer any of the parties’ questions and may contact the arbitration panel, if necessary.

CAR - (14): Preliminary Conference with the Arbitration Panel

Within 14 days of the selection of the arbitration panel, the assigned ADR administrator will schedule a preliminary conference between the parties and the arbitration panel. Unless the panel directs otherwise, the initial preliminary conference will be held by telephone. During the preliminary conference the arbitration panel and parties shall consider matters relating to the arbitration, including, for example: a) the nature of the issues to be decided and any stipulation by the parties to the issues to be decided; b) the exchange of documents and other information between the parties; c) the disclosure of expert witnesses, if any, and their opinions; d) whether any depositions shall be permitted and, if so, when those depositions shall be completed; e) the filing of any pre- trial motions; f) the exchange of exhibits and exhibit lists; g) the exchange of witness lists; h) any stipulations of fact to which the parties may agree; i) the filing of any trial briefs outlining the applicable facts and law to be considered; and j) the date of the arbitration and how many days the parties anticipate will be required to present the evidence. Based upon this preliminary conference, the panel shall prepare an arbitration scheduling order. The parties will be expected to abide by the terms of the scheduling order and shall only extend deadlines contained in that order for good cause and with the approval of the arbitration panel.

CAR - (15): Exchange of Information and Documents

Subject to the order of the arbitration panel, each party may request from the other information and/or documents which that party reasonably believes will be relevant to the issues raised by the arbitration. The parties are urged to resolve any disputes concerning the exchange of information and documents between themselves, but, if a resolution is not possible, the disagreement should be presented to the assigned ADR administrator promptly, who will forward it to the arbitration panel for ruling. The arbitration panel will decide whether further written explanation of the dispute is necessary and whether a hearing (either in person or by telephone) relating to that dispute is required.

CAR - (16): Depositions

Discovery depositions are not encouraged as they may add a significant cost to the alternative dispute resolution process. Unless otherwise agreed, any request for deposition shall be made in writing to the arbitration panel setting forth a good faith basis why a deposition is required. The arbitration panel will determine whether a response from the non-moving party is necessary and whether a hearing on the request (either in person or by telephone) is required.

CAR - (17): Selection of Hearing Date and Location

Unless otherwise agreed, the hearing of a commercial arbitration shall occur at ADR’s offices located in Chicago, Illinois. The hearing date of a commercial arbitration shall be selected during the preliminary conference with the arbitration panel.

CAR - (18): Hearing Attendance

It is the obligation of each party to attend each hearing session and the arbitration may proceed if a party fails to appear and an award may be issued based upon any evidence presented at that hearing. The arbitration panel will have the right to enter an appropriate sanction, other than an award, as a result of a party’s failure to appear at a hearing. An arbitrator or other person authorized by law may subpoena a witness or documents upon the request of any party or on its initiative. If a party that is subject to a pre-dispute contractual provision requiring that a dispute be arbitrated before ADR and that party fails, after receiving proper notice, to participate in the arbitration, the arbitration panel will determine the appropriate method by which the participating party may present evidence relating to the dispute and the arbitration panel will render an Award based upon that evidence presented.

CAR - (19): Right to Have Counsel or Other Representative Present

Each party to a commercial arbitration has the right to be present and to have counsel present at all times during the hearing process. Unless otherwise agreed, no party shall have the right to have more than one representative present during a hearing session.

CAR- (20): Continuances

The efficiency of the arbitration process depends upon the parties complying with deadlines that the arbitration panel has set, especially those relating to hearing dates. A request for a continuance of any deadline (including a hearing date) shall be made in writing and shall set forth a good faith basis for that request. Except as otherwise stated in these Rules, the ADR assigned administrator will forward the request to the arbitration panel, which will rule upon it. The arbitration panel will decide whether a written response from the non-movant is necessary or whether a hearing on the request (either in person or by telephone) is required.

CAR - (21): The Hearing

ADR will not provide a reporter for any hearing session or other conference. Any party that desires, may have a reporter present, but is responsible to pay the costs of that reporter. If the parties agree that the transcript shall be the official record, a copy of that transcript will be provided to the arbitration panel by a date to be determined by the arbitration panel. Each party shall have a fair and equal opportunity to present its claims and defenses. Unless otherwise agreed, the hearing of a commercial arbitration shall follow the same format as a civil trial. The arbitration panel may exercise its discretion in determining the nature and form of evidence it will consider based upon the issues presented. The parties may agree that certain rules of evidence may apply to a hearing of a commercial arbitration, although the application of rules of evidence is not necessary. Unless otherwise agreed, all witnesses who are not parties to the case shall be excluded from being present during the testimony of any other witness.

CAR - (22): Post-Hearing Submissions

Upon the close of the evidence, the parties shall not submit any new evidence which was not presented during the hearing of a commercial arbitration without leave of the arbitration panel. The arbitration panel will determine whether post-hearing briefs will benecessary to assist the panel in ruling upon the issues presented by a particular matter. The arbitration panel shall have the discretion to limit the content of any post-hearing submissions, including, for example, what issues are to be addressed, number of pages, right to reply, etc.

CAR- (23): The Award

Unless otherwise agreed, the arbitration panel will issue a written Award, signed by each arbitrator, within 30 days of the closing of the hearing. The hearing will be considered “closed” upon either the closing argument of the parties, or upon the date the last requested post-hearing briefs are filed. If an arbitration panel of three arbitrators is used, a majority of the arbitrators must agree to the terms of the Award. The arbitration panel will provide the written Award to the ADR assigned administrator who will then forward it to the parties.

CAR- (24): Failure to Object

A party who does not object to any failure to comply with these rules will be considered to have waived any such objection.

CAR - (25): Settlement

The parties are encouraged to engage in good faith settlement negotiations. Upon the parties’ request, ADR will assist them in obtaining an ADR approved mediator to assist them in this process. Should the parties reach a settlement of their claims, they should immediately notify the ADR assigned administrator.

CAR- (26): Fees

All administrative fees and fees relating to the compensation of arbitrators must be paid in full. Following the Preliminary Conference with the Arbitration Panel, ADR will make a good faith estimate of the fees that will be incurred through the last anticipated hearing session and will require that a deposit of those fees be made by a designated date prior to hearing. If additional hearing sessions are necessary, a fee deposit for those sessions will be required. ADR reserves the right to stay any further hearings or proceedings until all fee deposits have been made. ADR further retains the right to not issue an Award until all fee deposits have been made. If, following the conclusion of the hearing, any portion of the fee deposit remains, ADR will promptly refund that balance to the parties.

CAR - (27): Liability of ADR and Arbitrators

By arbitrating this matter before ADR, the parties agree that neither ADR nor any arbitrator shall be liable to any party for any act or omission relating to any arbitration under these Rules.

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