Arbitration Clauses

"Agreements to arbitrate are controlled by the Uniform Arbitration Act NMSA §44-7A

An agreement contained in a record to submit to arbitration any existing or subsequent controversy arising between the parties to the agreement is valid, enforceable and irrevocable except upon a ground that exists at law or in equity for the revocation of a contract. If a party to a judicial proceeding challenges the existence of, or claims that a controversy is not subject to an agreement to arbitrate, the arbitration proceeding may continue pending final resolution of the issue by the court, unless the court otherwise orders. NMSA §44-7A-7" "

New Mexico has a strong policy in favor of arbitration. Santa Fe Techs., Inc. v. Argus Networks, Inc. 2002-NMCA-030, ; 51, 131 N.M. 772, 42 P.3d 1221, cert. denied, 131 N.M. 737, 42 P.3d 842; Casias v. Dairyland Ins. Co., 1999-NMCA-046, ¶ 7, 126 N.M. 772, 975 P.2d 385, cert. denied, 127 N.M. 389, 981 P.2d 1207. However, an enforceable contract to arbitrate is a prerequisite to compelling arbitration. Salazar v. Citadel Comm’ns Corp., 2004-NMSC-013, ¶ 8, 135 N.M. 447, 90 P.3d 466. Whether such a contract exists is a question of state contract law, and the trial court, not the arbitrator, decides the question. Fiser v. Dell Computer Corp’n, 2007-NMCA-087, ¶ 5, 142 N.M. 331, 165 P.3d 328, rev’d on other grounds, 2008-NMSC-046, 144 N.M. 464, 188 P.3d 1215 (arbitration agreement prohibiting class action treatment of small consumer claims unenforceable as violating New Mexico public policy); see, however, the AT&T Mobility decision, discussed in the Comments section.

 

 

Although it probably remains true that the parties to a commercial arbitration agreement need not make identical promises to form an enforceable agreement, in the consumer small loan context arbitration agreements that require the borrower to arbitrate all claims while allowing the lender to litigate some claims are substantively unconscionable, and unenforceable. Cordova v. World Fin. Corp’n of N.M., 2009-NMSC-021, 146 N.M. 256, 208 P.3d 901. The extent and nature of the consideration and/or mutual promises required to support an arbitration agreement is the subject of relatively extensive discussion in New Mexico appellate court opinions. See e.g., Fiser, 2007-NMCA-087; Peavy by Peavy v. Skilled Healthcare Grp., Inc., 2020-NMSC-010, 470 P.3d 218; Sisneros v. Citadel Broadcasting Company, 2006-NMCA-102, 140 N.M. 266, 142 P.3d 34. Note, however, that the U.S. Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), has cast some doubt on the viability of the aforementioned decisions, particularly the Fiser decision finding class action waivers in arbitration provisions to be unenforceable.