When Contracting around the Law Will Not Work: The Potential Inability to Expressly Prohibit Punitive Damages in Arbitration

Just as the availability of all appropriate remedies is an important part of judicial litigation, the attempt to identify and limit those remedies is an issue in an arbitration proceeding. After the United States Supreme Court\u27s 1995 decision in Mastrobuono v. Shearson Lehman Hutton, Inc., it seemed clear that parties would be allowed to seek punitive damages if an agreement did not expressly prohibit such damages. Even so, parties continue to falter in writing agreements meant to contain the proper language that will succeed in limiting the availability of certain remedies. This is due to the continued confusion over how to limit the application of choice-of-law provisions in arbitration agreements, and to the policy argument that, even if parties can put limitations on liability, perhaps such limitations are not fair when tortious and grievous acts have been committed