On Monday, The US Supreme Court has struck down the state of Delaware's chance to revive a novel program which will have judges hear arbitration cases in private. The program, which has been dubbed by critics as "secret courts" will no longer be reviewed by the Supreme Court as they deemed the "secret courts" program as a violation of the Constitution.
Mayer Brown attorney Andrew Pincus, who was hired by the state of Delaware, argued about the need for private arbitration, "We believe that our nation and Delaware have lost an important opportunity to provide cost-effective options to resolve business-to-business disputes to remain competitive with other countries around the world."
The "secret courts" program, said Reuters, was adopted by Delaware in 2009 for the state's courts to compete with private arbitration, which is gaining popularity. Unlike litigation, both parties in an arbitration will decide on a particular forum and the ground rules for them to discuss their case. Since private arbitrations are less risky when resolving a dispute as compared with litigation, businesses reportedly opt for the more predictable form of dispute resolution.
Since 2009, the state of Delaware reportedly allow certain cases to be held in Chancery courtrooms with judges presiding the cases with their customary robes. Reuters said everything was done in secret, even with the case filing. It was disclosed that Delaware has used the program about six times until a federal judge shut the program down in 2013.
Following the decision, Reuters quoted Pincus, who said in a statement regarding their response to the Supreme Court decision that it is too early for Delaware to work on its next move.
The news agency said that the state of Delaware could use some of the advantages of the program, like the speed of the proceedings and the ability to customize how the proceedings should go. However, a federal court insisted that the public should have access to the proceedings, which loses the secrecy feature of the program.
