Motor Vehicle Franchise Contract Arbitration Fairness Act of 2001

Motor Vehicle Franchise Contract Arbitration Fairness Act of 2001 - Provides that whenever a motor vehicle franchise contract provides for the use of arbitration to resolve a controversy arising out of or relating to the contract, arbitration may be used to settle the controversy only if both parties consent in writing after such controversy arises. Requires the arbitrator to provide the parties with a written explanation of the factual and legal basis for the award.

[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1140 Introduced in Senate (IS)]







107th CONGRESS
  1st Session
                                S. 1140

   To amend chapter 1 of title 9, United States Code, to provide for 
 greater fairness in the arbitration process relating to motor vehicle 
                          franchise contracts.


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                   IN THE SENATE OF THE UNITED STATES

                             June 29, 2001

  Mr. Hatch (for himself, Mr. Feingold, Mr. Grassley, Mr. Leahy, Mr. 
Warner, Mr. Breaux, Mr. Burns, Mr. Reid, Mr. Craig, Mr. Torricelli, Mr. 
    Bennett, Ms. Snowe, Mr. DeWine, Mr. Thomas, and Mr. Hutchinson) 
introduced the following bill; which was read twice and referred to the 
                       Committee on the Judiciary

_______________________________________________________________________

                                 A BILL


 
   To amend chapter 1 of title 9, United States Code, to provide for 
 greater fairness in the arbitration process relating to motor vehicle 
                          franchise contracts.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Motor Vehicle Franchise Contract 
Arbitration Fairness Act of 2001''.

SEC. 2. ELECTION OF ARBITRATION.

    (a) Motor Vehicle Franchise Contracts.--Chapter 1 of title 9, 
United States Code, is amended by adding at the end the following:
``Sec. 17. Motor vehicle franchise contracts
    ``(a) For purposes of this section, the term--
            ``(1) `motor vehicle' has the meaning given such term under 
        section 30102(6) of title 49; and
            ``(2) `motor vehicle franchise contract' means a contract 
        under which a motor vehicle manufacturer, importer, or 
        distributor sells motor vehicles to any other person for resale 
        to an ultimate purchaser and authorizes such other person to 
        repair and service the manufacturer's motor vehicles.
    ``(b) Whenever a motor vehicle franchise contract provides for the 
use of arbitration to resolve a controversy arising out of or relating 
to the contract, arbitration may be used to settle such controversy 
only if after such controversy arises both parties consent in writing 
to use arbitration to settle such controversy.
    ``(c) Whenever arbitration is elected to settle a dispute under a 
motor vehicle franchise contract, the arbitrator shall provide the 
parties to the contract with a written explanation of the factual and 
legal basis for the award.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 1 of title 9, United States Code, is amended by adding at the 
end the following:

``17. Motor vehicle franchise contracts.''.

SEC. 3. EFFECTIVE DATE.

    The amendments made by section 2 shall apply to contracts entered 
into, amended, altered, modified, renewed, or extended after the date 
of the enactment of this Act.
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