Appeal from the Circuit Court of Cook County; the Hon. Albert
Porter, Judge, presiding.
JUSTICE LORENZ DELIVERED THE OPINION OF THE COURT:
Rehearing denied March 17, 1986.
Lee I. Wigod brought this action to vacate an arbitration award made by an arbitration committee of the defendant Chicago Mercantile Exchange (CME) and to enjoin collection of the award. Plaintiff now appeals from an order of the circuit court of Cook County dismissing that complaint and confirming the arbitration award. The sole issue on appeal is whether CME's arbitration rules, to which plaintiff concededly has agreed to adhere, require the plaintiff to submit to arbitration.
We find that the rules do not establish mandatory arbitration and therefore we reverse.
The pertinent facts are not in dispute. When he became a member of the CME, the plaintiff signed an agreement to abide by all the rules, orders and bylaws of the CME. The following CME rules pertain to arbitration of members' disputes:
DISPUTES ARBITRATED. It is declared to be contrary to the objectives and policy of the Exchange that members should engage in litigation over disputes involving a transaction upon the Exchange, relating to such transaction or otherwise relating to the Exchange or to their membership in the Exchange. When any such dispute occurs between members it shall be promptly reported to the President by the party claiming to be aggrieved. The president shall then determine whether or not the dispute shall be arbitrated or resolved by another committee or by the Board, shall so notify the parties in writing and, if it is to be arbitrated, submit a form of arbitration agreement for their signatures. A member receiving notice from the President that the matter is to be arbitrated shall have 10 days in which to file an appeal with the Board. The appeal shall be in writing and shall state the member's reasons for refusing to arbitrate. The Board shall, after hearing, reverse or affirm the ruling of the President. Any member who refuses to arbitrate after ruling of the President or ruling of the Board after appeal, or any member who refuses to comply with a final arbitration award, shall be guilty of a major offense."
REFERENCE TO ARBITRATION COMMITTEE. Upon execution of an arbitration agreement, a panel comprised of the Chairman and five other members selected by the President shall hear the matter. The Chairman, who may vote only in the case of a tie, shall conduct the hearing. In the event there is an alternate Chairman, the Chairman of the Board shall determine who will preside over the hearing.
Each of the parties to the arbitration may strike one member of the panel designated by the President, in which even that member shall be excused from hearing the matter. The President shall then select alternate members from the Arbitration Committee to constitute a panel of five members for that hearing. The matter submitted to arbitration shall be heard within 10 days from the date of submission unless good cause can be shown to the panel."
JURISDICTION OF PANEL OR BOARD NOT OPEN TO QUESTIONS. Any person who submits a controversy to arbitration or appeals to the Board from an award by the arbitration panel, or who takes any steps therein, shall be conclusively presumed to have voluntarily recognized the jurisdiction of the arbitration panel and the Board to hear and determine such controversy."
On September 19, 1984, defendant Robert S. Alpert, also a CME member, bought 20 stock-price index contracts, allegedly on plaintiff's instructions. Plaintiff refused to accept the contracts, asserting that he had not ordered them. Alpert took them into his own account and sold them the following day for a claimed loss of $33,000. Alpert then filed an arbitration claim against plaintiff with the CME.
The CME informed plaintiff by letter that if he did not believe the matter was appropriate for arbitration he had 10 days to file an appeal with the CME board of governors. However, if he agreed to the arbitration he was asked to sign and return an arbitration agreement form. Plaintiff did neither. Instead, he informed the CME, through ...