Question

Ellen contracts with James to be her stockbroker, making stock trades for Ellen's account. Ellen need not pre-approve the trades that James makes, only trades for more than $20,000. Ellen and James include a clause stating "that in case of any disputes arising out of this contract; the dispute shall be arbitrated using the rules of the New York Stock Exchange." ​

Ellen learns that since signing her contract with James, he has routinely been making trades worth more than $20,000 without her permission, and losing money. ​ Assume that Ellen sees James' unauthorized actions as the basis for a legal dispute.

If she arbitrates, what must she do first?

a. file a complaint

b. file an answer

c. file a submission

d. file a reverter

e. file a rejoinder

Answer 1

c. file a submission

In arbitration, the case is primarily initiated by filing a submission for the case that is to be looked upon out-of-the-court. The rest of the options do not form the first stage of Arbitration process. The case could only be heard, once the aggrieved party, here, Ellen, submits the case initiation request through the process of arbitration hence. This stage shall be followed by notifying the parties in dispute about such a filing of arbitration followed by the date when James should file an answer to Ellen’s demand. So filing of answer becomes the second stage and only filing a submission remains the primary step of arbitration.