An arbitrator has only the authority the parties' contract gives, including the authority to decide at the outset whether a dispute belongs in arbitration. When a clause refers to an arbitration provider's rules without saying which rules, Florida courts may keep that first question for themselves, and the arbitration waits while the parties litigate over it. A few precise words at signing can prevent the delay.
From the arbitrator's side of the table, the most common source of delay is often not the dispute itself. It is the argument over whether the dispute belongs in arbitration in the first place. Parties who signed a contract with an arbitration clause usually assume they settled that question long ago. A Florida appellate decision, Holdings JJJ, LLC v. Rand, shows how an ordinary-looking clause can leave it open and send the parties to a courtroom before any arbitrator hears a word.
Where an Arbitrator's Authority Comes From
Arbitration rests entirely on the parties' agreement. An arbitrator has no power beyond what the contract provides, including the power to decide which disputes the contract covers. If the agreement does not give the arbitrator that power, the arbitrator cannot take it.
When one side wants to arbitrate, and the other does not, someone must decide whether the dispute falls under the arbitration clause. That preliminary fight can take months. It involves motions, hearings, and often an appeal, all before anyone gets to what the dispute is actually about. In the meantime, the arbitration either never begins or sits idle.
Florida law gives the judge that decision unless the contract clearly gives it to the arbitrator. Many lawyers assume that any reference to the American Arbitration Association takes care of this. The assumption traces to the Florida Supreme Court's decision in Airbnb, Inc. v. Doe, which held that a contract adopting AAA rules that give the arbitrator this power is sufficient.
The important words are "rules that give the arbitrator this power."
The AAA and Other Providers Have More Than One Rulebook
The AAA, like other arbitration providers, does not have a single set of rules. It has separate rules for commercial disputes, consumer disputes, construction disputes, employment disputes, and others. Some give the arbitrator the power to decide what is arbitrable. Some apply only to certain kinds of contracts. At least one set has been retired.
A clause that says only "the rules of the American Arbitration Association" does not tell anyone which of these applies. If a court cannot tell which rules the parties chose, it cannot tell whether they agreed to let the arbitrator decide what gets arbitrated. When the contract is unclear on that point, the judge keeps the decision. Another Florida appellate court reached the same conclusion several years ago, and the Florida Supreme Court has not said otherwise.
The AAA's commercial rules do provide that they apply by default when parties agree to AAA arbitration of a domestic commercial dispute without naming particular rules. That default helps the provider administer a case once it is filed. It does not guarantee that a court, asked to decide who resolves coverage questions, will read the contract the same way.
The Uncertainty in the Law
In Holdings JJJ, the buyers of a property sued the seller over problems they discovered after closing. The purchase contract required arbitration "in accordance with the arbitration rules of the American Arbitration Association." It did not name any particular set of rules.
The seller asked the court to send the case to arbitration and argued that the arbitrator, not the judge, should decide whether the buyers' claims were covered. To support that argument, the seller relied on the AAA's consumer rules. The trouble was that the consumer rules, by their own terms, do not apply to real estate sales. The seller offered no alternative. The trial court kept the question for itself, and the appellate court would not let the seller switch to a different argument on appeal.
The seller eventually won the right to arbitrate because the appellate court found that the buyers' claims fell within the clause. But it got there only after losing in the trial court, appealing, and still facing a remand on whether it had given up its right to arbitrate by litigating in the meantime. All of that happened before an arbitrator could be appointed to hear the merits.
The Words That Decide What Gets Arbitrated
The case carries a second lesson, about which disputes an arbitration clause covers.
Florida courts pay close attention to a short phrase. A clause covering disputes "arising out of or relating to" a contract is treated as broad and reaches nearly any claim connected to the deal. A clause covering disputes "arising out of" the contract, without the words "or relating to," is treated as narrow and reaches only claims tied directly to the contract's terms. That difference can decide whether an arbitrator or a jury hears a fraud claim, or a dispute over a related document.
The clause in Holdings JJJ used the narrower phrase, and the trial court treated that as the end of the matter. The appellate court disagreed, in part because the clause covered disputes arising out of "the transaction, sale, contract, or closing," not just the contract. Those extra words widened the clause enough to reach the buyers' claims, including a claim that the seller had hidden a problem with the property before the sale.
The drafter decides how far the clause reaches. If broad coverage is the goal, "arising out of or relating to" is the language Florida courts recognize. If narrower language is used, the words that follow it matter. An arbitrator is bound by those words just as a court is. A claim the clause does not reach is not one the arbitrator can decide, however efficient it might be to hear everything in one proceeding.
Four Things to Check
These are inexpensive corrections, and you can make most of them the next time you update a contract form or negotiate a new agreement.
First, name the provider and the rules. If you want to use the AAA, be specific. "The Commercial Arbitration Rules of the American Arbitration Association" is one word longer than "the rules of the American Arbitration Association," and that word may determine who decides your dispute. The same care applies to any other provider.
Second, say it directly. If the goal is for the arbitrator to decide whether a dispute is covered, the contract should say so in its own sentence rather than leaving it to whatever the chosen rules provide. That protects the clause even if the provider later changes or retires those rules.
Third, choose the scope on purpose. If the clause is meant to reach every dispute connected to the relationship, consider using "arising out of or relating to."
Fourth, if a dispute has already arisen, the problem can still be fixed. Nothing prevents the parties from signing a short submission agreement that names the rules, confirms that the arbitrator will decide questions about scope, and describes the claims to be arbitrated. Counsel moving to compel arbitration should also confirm which rules actually apply before filing anything. The seller in Holdings JJJ chose the wrong rulebook, argued nothing else, and was held to that choice.
An arbitration clause is supposed to settle where disputes will be resolved before any dispute arises. One that leaves the basic questions open invites exactly the litigation it was written to avoid.