Does arbitration clause prevent class-action lawsuits with respect to the franchising dispute resolution?

Abstract

DOESARBITRATIONCLAUSEPREVENTCLASS-ACTIONLAWSUITSWITHRESPECTTOTHEFRANCHISING DISPUTERESOLUTION? This article discusses issues related to class action in franchise disputes with reference to the laws of a number of countries, such as the United States of America (the U. S.), Russian Federation, and Vietnam. The aim of this study is to provide a comprehensive analysis and evaluate of the use of arbitration clauses with/without class-action waivers that are included in franchise agreements to avoid class-action lawsuits and/or class-action arbitration. The study uses general scientific and special research methods such as analysis, synthesis, deduction, logical and comparative legal method. As a result of the study, the author came to the conclusion is that arbitration clause plays a sufficient role in preventing class-action lawsuits and even class-action arbitration, which is even though still new, rare, and prolematic, in franchising dispute resolution, but its degree of avoidance also depends on how obvious or ambiguous of the arbitration agreement as well as on the specific applicable law. It is because under some domestic laws the class action waivers that the franchisors, either expressly or implicitly, impose on their franchisees are considered unconscionable or inappropriate.