united-states contract-law new-jersey arbitration
What&#39;s the difference between a petition vs. declaratory judgment action?
<p>An article by <a href="https://www.wikihow.legal/File-a-Court-Proceeding-to-Compel-Arbitration-As-the-Complainant" rel="nofollow noreferrer">WikiHow</a> states:</p>
<blockquote>
<p>Many people are familiar with responding to a lawsuit with a motion to
compel arbitration. However, you can also file a petition to compel
even when no lawsuit is pending.</p>
</blockquote>
<p>I was researching this area of law and I came across a different (but overlapping) concept known as a <strong><a href="https://www.law.cornell.edu/wex/declaratory_judgment" rel="nofollow noreferrer">declaratory judgement action</a></strong>:</p>
<blockquote>
<p>A declaratory judgment is a binding judgment from a court defining the
legal relationship between parties and their rights in a matter before
the court. When there is uncertainty as to the legal obligations or
rights between two parties, a declaratory judgment offers an immediate
means to resolve this uncertainty.</p>
</blockquote>
<p>What's the difference between the two types of fillings/lawsuits?</p>
<p>In what circumstances should each one be used?</p>

<p>A motion to compel means that the court <em>orders</em> a party to do something.</p>
<p>A declaratory judgment means that the court confirms some fact or legal position but without ordering anyone to do anything.</p>
<p>E.g.:</p>
<p>&quot;The court orders Party A to disclose document X to Party B&quot;.</p>
<p>vs.</p>
<p>&quot;The court declares that Party A is under an obligation to disclose document X to Party B&quot;.</p>
<p>A declaration is typically sought when two parties merely want to understand what their position is without actually entering into a dispute. For example, they disagree on what their obligations are under a contract, but there isn't actually a breach of contract which one party wants to sue the other for.</p>

<blockquote>
<p>What's the difference between the two types of fillings/lawsuits?</p>
</blockquote>
<p>This is an apples-to-oranges comparison. Proceedings to compel arbitration address the question of <em>where</em> to litigate a dispute. There a party seeks to enforce a method for dispute resolution that the counterparty is trying to elude. Declaratory action indicates a <em>type of relief</em> which has the form of preemptively outlining the parties' rights and obligations should an injury materialize in the future.</p>
<p>Although the parties could resort to arbitration for declaratory relief, typically arbitration is sought only after the injury has occurred. Arbitration for purposes of declaratory relief essentially amounts to asking the arbitrator to determine the &quot;correct&quot; and binding interpretation of a contract.</p>
<p>Note that the <a href="https://www.wikihow.legal/File-a-Court-Proceeding-to-Compel-Arbitration-As-the-Complainant" rel="nofollow noreferrer">WikiHow</a> resource to which you refer contains some mischaracterizations. One example is the assertion that &quot;<em>federal courts have a strong policy of favoring arbitration</em>&quot;. A <a href="https://law.stackexchange.com/a/86807/18505">recent answer</a> provides legal precedents clarifying that arbitration is to be enforced <em>by virtue of being premised on some contract</em> (or maybe some statute) rather than because of judicial preference. A policy preference for or against arbitration is within legislator's province, not something for courts to override by means of &quot;policies&quot;.</p>
<p>Also the notion, stated in that article, that many people are familiar with responding to a complaint by moving to compel arbitration is irrelevant and highly doubtful.</p>
<p>The article would have been more productive if it warned that arbitration rulings are significantly harder to reverse than those from court proceedings. In part, that difference is because:</p>
<ul>
<li>&quot;<em>[i]n deciding whether the arbitrator exceeded its authority,
[courts] resolve all doubts in favor of arbitration</em>&quot;, <a href="https://www.leagle.com/decision/1994134026f3d131411139" rel="nofollow noreferrer"><em>Executone
Information Systems, Inc. v. Davis</em>, 26 F.3d 1314, 1320 (1994)</a> (note that the <em>Executone</em> appellate opinion refers to arbitrator's conclusions, which is different from asserting that courts prefer to compel arbitration);</li>
<li>&quot;<em>even if [the court] does not agree with the arbitrators'
interpretation of the contract[,] [...] the standard of review of
arbitration awards requires [courts] to defer to the arbitrators'
interpretation of the contract [...] [whereas the] court need not be
so deferential to the district court's judgment</em>&quot;, <a href="https://www.leagle.com/decision/19902133918f2d121511942" rel="nofollow noreferrer"><em>Anderman/Smith
Co. v. Tenn. Gas Pipeline Co.</em>, 918 F.2d 1215, 1218-1219, n1
(1990)</a>, &quot;<em>[j]udicial review of arbitration awards is extremely
limited</em>&quot;, Id. at 1218; and</li>
<li>&quot;<em>[w]hether or not the [Arbitrator]'s findings are supported by the
evidence in the record is beyond the scope of [the Court's] review</em>&quot;,
<a href="https://www.leagle.com/decision/infco20100610145" rel="nofollow noreferrer"><em>Lagstein v. Certain Underwriters, Lloyd's, London</em>, 607 F.3d 634,
642 (2010)</a>.</li>
</ul>
<blockquote>
<p>In what circumstances should each one be used?</p>
</blockquote>
<p>For reasons stated in the preceding paragraph, arbitration entails a high risk of arbitrator's subjectivity (arbitrariness) and therefore should be avoided whenever possible. The easiest way to avoid it is by declining to sign agreements that establish arbitration as &quot;alternative method for dispute resolution&quot;.</p>
