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Title 49 Part 1108

Title 49 → Subtitle B → Chapter X → Subchapter B → Part 1108

Electronic Code of Federal Regulations e-CFR

Title 49 Part 1108

e-CFR data is current as of October 11, 2019

Title 49Subtitle BChapter XSubchapter B → Part 1108


Title 49: Transportation


PART 1108—ARBITRATION OF CERTAIN DISPUTES SUBJECT TO THE STATUTORY JURISDICTION OF THE SURFACE TRANSPORTATION BOARD

§1108.1   Definitions.

As used in this part:

(a) Arbitrator means a single person appointed to arbitrate pursuant to these rules.

(b) Arbitrator Panel means a group of three people appointed to arbitrate pursuant to these rules. One panel member would be selected from the roster by each side to the arbitration dispute, and the parties would mutually agree to the selection of the third-lead arbitrator under the “strike” methodology described in §1108.6(c).

(c) Arbitration program means the program established by the Surface Transportation Board in this part under which participating parties, including rail carriers and shippers, have agreed voluntarily in advance, or on a case-by-case basis to resolve disputes about arbitration-program-eligible matters brought before the Board using the Board's arbitration procedures.

(d) Arbitration-program-eligible matters are those disputes or components of disputes, that may be resolved using the Board's arbitration program and include disputes involving one or more of the following subjects: rates; Demurrage; accessorial charges; misrouting or mishandling of rail cars; and disputes involving a carrier's published rules and practices as applied to particular rail transportation.

(e) Counterclaim is an independent arbitration claim filed by a respondent against a complainant arising out of the same set of circumstances or is substantially related to the underlying arbitration complaint and subject to the Board's jurisdiction.

(f) Final arbitration decision is the unredacted decision served upon the parties 30 days after the close of the arbitration's evidentiary phase.

(g) Interstate Commerce Act means the Interstate Commerce Act as amended by the ICC Termination Act of 1995 and the Surface Transportation Board Reauthorization Act of 2015.

(h) Lead arbitrator or single arbitrator means the arbitrator selected by the strike methodology outlined in §1108.6(c).

(i) Monetary award cap means a limit on awardable damages of $25,000,000 in rate disputes, including any rate prescription, and $2,000,000 in practice disputes, unless the parties mutually agree to a lower award cap. If parties bring one or more counterclaims, such counterclaims will be subject to a separate monetary award cap.

(j) Practice disputes are disputes involving demurrage; accessorial charges; misrouting or mishandling of rail cars; and disputes involving a carrier's published rules and practices as applied to particular rail transportation.

(k) Statutory jurisdiction means the jurisdiction conferred on the STB by the Interstate Commerce Act, including jurisdiction over rail transportation or services that have been exempted from regulation.

(l) STB or Board means the Surface Transportation Board.

(m) Rate disputes are disputes involving the reasonableness of a rail carrier's rates.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69414, Oct. 6, 2016]

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§1108.2   Statement of purpose, organization, and jurisdiction.

(a) The Board's intent. The Board favors the resolution of disputes through the use of mediation and arbitration procedures, in lieu of formal Board proceedings, whenever possible. This section provides for the creation of a binding, voluntary arbitration program in which parties, including shippers and railroads, agree in advance to arbitrate certain types of disputes with a limit on potential liability of $25,000,000 in rate disputes, including any rate prescription, and $2,000,000 in other disputes unless the parties mutually agree to a lower award cap. The Board's arbitration program is open to all parties eligible to bring or defend disputes before the Board.

(1) Except as discussed in paragraph (b) of this section, parties to arbitration may agree by mutual written consent to arbitrate additional matters and to a lower amount of potential liability than the monetary award cap identified in this section.

(2) Nothing in these rules shall be construed in a manner to prevent parties from independently seeking or utilizing private arbitration services to resolve any disputes they may have.

(b) Limitations to the Board's arbitration program. These procedures shall not be available:

(1) To resolve disputes involving labor protective conditions;

(2) To obtain the grant, denial, stay or revocation of any license, authorization (e.g., construction, abandonment, purchase, trackage rights, merger, pooling), or exemption related to such matters;

(3) To prescribe for the future any conduct, rules, or results of general, industry-wide applicability;

(4) To resolve disputes that are solely between two or more rail carriers.

Parties may only use these arbitration procedures to arbitrate matters within the statutory jurisdiction of the Board.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69414, Oct. 6, 2016]

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§1108.3   Participation in the Board's arbitration program.

(a) Opt-in procedures. Any rail carrier, shipper, or other party eligible to bring or defend disputes before the Board may at any time voluntarily choose to opt into the Board's arbitration program. Opting in may be for a particular dispute or for all potential disputes before the Board unless and until the party exercises the opt-out procedures discussed in §1108.3(b). To opt in parties may:

(1) File a notice with the Board, under Docket No. EP 699, advising the Board of the party's intent to participate in the arbitration program. Such notice may be filed at any time and shall be effective upon receipt by the Board.

(i) Notices filed with the Board shall state which arbitration-program-eligible issue(s) the party is willing to submit to arbitration.

(ii) Notices may, at the submitting party's discretion, provide for a lower monetary award cap than the monetary award caps provided in this part.

(2) Participants to a proceeding, where one or both parties have not opted into the arbitration program, may by joint notice agree to submit an issue in dispute to the Board's arbitration program. The joint notice must clearly state the issue(s) which the parties are willing to submit to arbitration and the corresponding maximum monetary award cap if the parties desire to arbitrate for a lower amount than the monetary award cap that would otherwise be applicable.

(3) Parties to a dispute may jointly notify the Board that they agree to submit an eligible matter in dispute to the Board's arbitration program, where no formal proceeding has begun before the Board. The joint notice must clearly state the issue(s) which the parties are willing to submit to arbitration and the corresponding maximum monetary award cap if the parties desire to arbitrate for a lower amount than the applicable monetary award cap.

(b) Opt-out procedures. Any party who has elected to participate in the arbitration program may file a notice at any time under Docket No. EP 699, informing the Board of the party's decision to opt out of the program or amend the scope of its participation. The notice shall take effect 90 days after filing and shall not itself excuse the filing party from arbitration proceedings that are ongoing, or permit it to withdraw its consent to participate in any arbitration-program-eligible dispute associated with their opt-in notice for any matter before the Board at any time prior to the end of the 90 day period before the opt-out notice takes effect

(c) Public notice of arbitration program participation. The Board shall maintain a list of participants who have opted into the arbitration program on its Web site at www.stb.gov. Those parties participating in arbitration only for a particular dispute will not be listed on the Board's Web site.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69414, Oct. 6, 2016; 83 FR 15078, Apr. 9, 2018]

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§1108.4   Use of arbitration.

(a) Arbitration-program-eligible matters. Matters eligible for arbitration under the Board's program are: rates; Demurrage; accessorial charges; misrouting or mishandling of rail cars; and disputes involving a carrier's published rules and practices as applied to particular rail transportation. Parties may agree in writing to arbitrate additional matters on a case-by-case basis as provided in paragraph (e) of this section.

(b) Monetary award cap. Arbitration claims will be subject to the arbitration program award cap of $25,000,000, including any rate prescription, per rate dispute and $2,000,000 per practice dispute unless:

(1) The defending party's opt-in notice provides for a lower monetary cap or;

(2) The parties agree to select a lower award cap that will govern their arbitration proceeding. The parties may change the award cap by incorporating an appropriate provision in their agreement to arbitrate.

(3) Counterclaims will not offset against the monetary award cap of the initiating claim. A counterclaim is an independent claim and is subject to a monetary award cap of $25,000,000, including any rate prescription, per rate dispute and $2,000,000 per practice dispute, separate from the initiating claim, or to a lower cap agreed upon by the parties in accordance with §1108.4(b)(2).

(c) Assignment of arbitration-program-eligible matters. The Board shall assign to arbitration all arbitration-program-eligible disputes where all parties to the proceeding are participants in the Board's arbitration program, or where one or more parties to the matter are participants in the Board's arbitration program, and all other parties to the proceeding request or consent to arbitration for a particular dispute.

(d) Matters partially arbitration-program-eligible. Where the issues in a proceeding before the Board relate in part to arbitration-program-eligible matters, only those parts of the dispute related to arbitration-program-eligible matters may be arbitrated pursuant to the arbitration program, unless the parties petition the Board in accordance with paragraph (e) of this section to include additional disputes.

(e) Other matters. Parties may petition the Board, on a case-by-case basis, to assign to arbitration disputes, or portions of disputes, not listed as arbitration-program-eligible matters. This may include counterclaims and affirmative defenses. Such disputes are subject to a monetary award cap of $2,000,000 or to a lower cap agreed upon by the parties in accordance with paragraph (b)(2) of this section. The Board will not consider for arbitration types of disputes that are expressly prohibited in §1108.2(b).

(f) Arbitration clauses. Nothing in the Board's regulations shall preempt the applicability of, or otherwise supersede, any new or existing arbitration clauses contained in agreements between shippers and carriers.

(g) Rate disputes. Arbitration of rate disputes will only be available to parties if the rail carrier has market dominance as determined by the Board under 49 U.S.C. 10707. In rate disputes, the arbitrator or panel of arbitrators, as applicable, shall consider the Board's methodologies for setting maximum lawful rates, giving due consideration to the need for differential pricing to permit a rail carrier to collect adequate revenues (as determined under 49 U.S.C. 10704(a)(2)).

[78 FR 29079, May 17, 2013, as amended at 81 FR 69414, Oct. 6, 2016]

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§1108.5   Arbitration commencement procedures.

(a) Complaint. Except as provided in paragraph (e) of this section, arbitration under these rules shall commence with a written complaint, which shall be filed and served in accordance with Board rules contained at part 1104 of this chapter. Each complaint must contain a statement that the complainant and the respondent are participants in the Board's arbitration program pursuant to §1108.3(a), or that the complainant is willing to arbitrate voluntarily all or part of the dispute pursuant to the Board's arbitration procedures, and the relief requested.

(1) If the complainant desires arbitration with a single arbitrator instead of a three-member arbitration panel, the complaint must make such a request in its complaint.

(2) If the complainant is not a participant in the arbitration program, the complaint may specify the issues that the complainant is willing to arbitrate.

(3) If the complainant desires to set a lower amount of potential liability than the monetary award cap that would otherwise apply, the complaint should specify what amount of potential liability the complainant is willing to incur.

(b) Answer to the complaint. Any respondent must, within 20 days of the date of the filing of a complaint, answer the complaint. The answer must state whether the respondent is a participant in the Board's arbitration program, or whether the respondent is willing to arbitrate the particular dispute.

(1) If the complaint requests arbitration by a single arbitrator instead of by an arbitration panel, the answer must contain a statement consenting to arbitration by a single arbitrator or an express rejection of that request.

(i) The respondent may also initiate a request to use a single arbitrator instead of an arbitration panel.

(ii) Absent the parties agreeing to arbitration through a single arbitrator, the Board will assign the case to arbitration by a panel of three arbitrators as provided by §1108.6(a) through (d). The party requesting the single arbitrator shall at that time provide written notice to the Board and the other parties if it continues to object to a three-member arbitration panel. Upon timely receipt of the notice, the Board shall the set the case for formal adjudication by the Board.

(2) When the complaint limits the arbitrable issues, the answer must state whether the respondent agrees to those limitations or, if the respondent is already a participant in the Board's arbitration program, whether those limitations are consistent with the respondent's opt-in notice filed with the Board pursuant to §1108.3(a)(1)(i). If the answer contains an agreement to arbitrate some but not all of the arbitration-program-eligible issues in the complaint, the complainant will have 10 days from the date of the answer to advise the respondent and the Board in writing whether the complainant is willing to arbitrate on that basis.

(3) When the complaint proposes a lower amount of potential liability, the answer must state whether the respondent agrees to that amount in lieu of the otherwise applicable monetary award cap.

(c) Counterclaims. In answering a complaint, the respondent may file one or more counterclaims against the complainant if such claims arise out of the same set of circumstances or are substantially related, and are subject to the Board's jurisdiction as provided in §1108.2(b). Counterclaims are subject to the assignment provisions contained in §1108.4(c)-(e). Counterclaims are subject to the monetary award cap provisions contained in §1108.4(b)(2)-(3).

(d) Affirmative defenses. An answer to an arbitration complaint shall contain specific admissions or denials of each factual allegation contained in the complaint, and any affirmative defenses that the respondent wishes to assert against the complainant.

(e) Jointly-filed notice. In lieu of a formal complaint proceeding, arbitration under these rules may commence with a jointly-filed notice by parties agreeing to submit an eligible matter in dispute to the Board's arbitration program under §1108.3(a)(3). The notice must:

(1) Contain a statement that all relevant parties are participants in the Board's arbitration program pursuant to §1108.3(a), or that the relevant parties are willing to arbitrate voluntarily a matter pursuant to the Board's arbitration procedures, and the relief requested;

(2) Indicate whether parties have agreed to a three-member arbitration panel or a single arbitrator;

(3) Indicate if the parties have agreed to a lower amount of potential liability in lieu of the otherwise applicable monetary award cap.

(f) Arbitration initiation. When the parties have agreed upon whether to use a single arbitrator or a panel of arbitrators, the issues(s) to be arbitrated, and the monetary limit to any arbitral decision, the Board shall initiate the arbitration under §1108.7(a) and provide a list of arbitrators as described in §1108.6.

(g) Arbitration agreement. Shortly after the panel of arbitrators or arbitrator is selected, the parties to arbitration together with the lead or single arbitrator, as applicable, shall create a written arbitration agreement, which at a minimum will state with specificity the issues to be arbitrated and the corresponding monetary award cap to which the parties have agreed. The agreement may also contain other mutually agreed upon provisions.

(1) Any additional issues selected for arbitration by the parties, that are not outside the scope of these arbitration rules as explained in §1108.2(b), must be subject to the Board's statutory authority.

(2) These rules shall be incorporated by reference into any arbitration agreement conducted pursuant to an arbitration complaint filed with the Board.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69415, Oct. 6, 2016]

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§1108.6   Arbitrators.

(a) Panel of arbitrators. Unless otherwise requested in writing pursuant to §1108.5(a)(1) and agreed to by all parties to the arbitration, all matters arbitrated under these rules shall be resolved by a panel of three arbitrators.

(b) Roster. Arbitration shall be conducted by an arbitrator (or panel of arbitrators) selected, as provided herein, from a roster of persons with rail transportation, economic regulation, professional or business experience, including agriculture, in the private sector. Persons seeking to be included on the roster must have training in dispute resolution and/or experience in arbitration or other forms of dispute resolution. The Board will establish the initial roster of arbitrators by no-objection vote. The Board may modify the roster at any time by no-objection vote to include other eligible arbitrators or remove arbitrators who are no longer available. The Board's roster will provide a brief biographical sketch of each arbitrator, including information such as background, area(s) of expertise, arbitration experience, and geographical location, as well as general contact information and fees, based on the information supplied by the arbitrator. The roster shall be published on the Board's Web site. The Board will update the roster every year. The Board will seek public comment on any modifications that should be made to the roster, including requesting the names and qualifications of new arbitrators who wish to be placed on the roster, and updates from arbitrators appearing on the roster to confirm that the biographical information on file with the Board remains accurate. Arbitrators who wish to remain on the roster must notify the Board of their continued availability.

(c) Selecting the lead arbitrator. If the parties cannot mutually agree on a lead arbitrator for a panel of arbitrators, the parties shall use the following process to select a lead arbitrator: First, each party will be given three peremptory strikes to remove names from the Board's roster. Then, from the remaining names on the roster, each party will submit a list of up to 10 potential arbitrators. If only one arbitrator appears on both lists, he or she would be selected as the single or lead arbitrator. If multiple arbitrators appear on both lists, the parties would alternatively strike names of the jointly listed arbitrators until one remains, beginning with complainant. If no name appears on both lists, the parties would alternatively strike from the Board's entire roster, as amended based on the peremptory strikes. A lead arbitrator shall be selected within 14 days of the Board initiating the arbitration process.

(1) The parties are responsible for conducting their own due diligence in striking names from the arbitrator list. The final selection of a lead arbitrator is not challengeable before the Board.

(2) The lead arbitrator appointed through the strike methodology shall serve as the head of the arbitration panel and will be responsible for ensuring that the tasks detailed in §§1108.7 and 1108.9 are accomplished.

(d) Party-appointed arbitrators. The party or parties on each side of an arbitration dispute shall select one arbitrator from the roster, regardless of whether the other party struck the arbitrator's name in selecting a lead arbitrator. The party or parties on each side will appoint that side's own arbitrator within 14 days of the Board initiating the arbitration process. Parties on one side of an arbitration proceeding may not challenge the arbitrator selected by the opposing side.

(e) Use of a single arbitrator. Parties to arbitration may request the use of a single arbitrator. Requests for use of a single arbitrator must be included in a complaint or an answer as required in §1108.5(a)(1), or in the joint notice filed under §1108.5(e). Parties to both sides of an arbitration dispute must agree to the use of a single arbitrator in writing. If the single-arbitrator option is selected, and if parties cannot mutually agree on a single arbitrator, the arbitrator selection procedures outlined in paragraph (c) of this section shall apply.

(f) Arbitrator incapacitation. If at any time during the arbitration process a selected arbitrator becomes incapacitated or is unwilling or unable to fulfill his or her duties, a replacement arbitrator shall be promptly selected by either of the following processes:

(1) If the incapacitated arbitrator was appointed directly by a party to the arbitration, the appointing party shall, without delay, appoint a replacement arbitrator pursuant to the procedures set forth in §1108.6(d).

(2) If the incapacitated arbitrator was the lead or single arbitrator, the parties shall promptly inform the Board of the arbitrator's incapacitation and the selection procedures set forth in paragraph (c) of this section shall apply.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69415, Oct. 6, 2016]

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§1108.7   Arbitration procedures.

(a) Initiation. With the exception of rate dispute arbitration proceedings, the Board shall initiate the arbitration process within 40 days after submission of a written complaint or joint notice filed under §1108.5(e). In arbitrations involving rate disputes, the Board shall initiate the arbitration process within 10 days after the Board issues a decision determining that the rail carrier has market dominance.

(b) Arbitration evidentiary phase timetable. Whether the parties select a single arbitrator or a panel of three arbitrators, the lead or single arbitrator shall establish all rules deemed necessary for each arbitration proceeding, including with regard to discovery, the submission of evidence, and the treatment of confidential information, subject to the requirement that this evidentiary phase shall be completed within 90 days from the date on which the arbitration process is initiated, unless a party requests an extension, and the arbitrator or panel of arbitrators, as applicable, grants such extension request.

(c) Written decision timetable. The lead or single arbitrator will be responsible for writing the arbitration decision. The unredacted arbitration decision must be served on the parties within 30 days of completion of the evidentiary phase. A redacted copy of the arbitration decision must be served upon the Board within 60 days of the close of the evidentiary phase for publication on the Board's Web site.

(d) Extensions to the arbitration timetable. The Board may extend any deadlines in the arbitration timetable provided in this part upon agreement of all parties to the dispute.

(e) Protective orders. Any party, on either side of an arbitration proceeding, may request that discovery and the submission of evidence be conducted pursuant to a standard protective order agreement.

[81 FR 69416, Oct. 6, 2016]

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§1108.8   Relief.

(a) Relief available. An arbitrator may grant relief in the form of monetary damages or a rate prescription in rate disputes to the extent they are available under this part or as agreed to in writing by the parties. A rate prescription shall not exceed 5 years.

(b) Relief not available. No injunctive relief shall be available in Board arbitration proceedings.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69416, Oct. 6, 2016]

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§1108.9   Decisions.

(a) Decision requirements. Whether by a panel of arbitrators or a single arbitrator, all arbitration decisions shall be in writing and shall contain findings of fact and conclusions of law. All arbitration decisions must be consistent with sound principles of rail regulation economics. The arbitrator shall provide an unredacted draft of the arbitration decision to the parties to the dispute, in accordance with any protective order governing the release of confidential and highly confidential information pursuant to §1108.7(e).

(b) Redacting arbitration decision. The lead or single arbitrator shall also provide the parties with a draft of the decision that redacts or omits all proprietary business information and confidential information pursuant to any such requests of the parties under the arbitration agreement.

(c) Party input. The parties may then suggest what, if any, additional redactions they think are required to protect against the disclosure of proprietary and confidential information in the decision.

(d) Lead or single arbitrator authority. The lead or single arbitrator shall retain the final authority to determine what, if any, additional redactions are appropriate to make.

(e) Service of arbitration decision. The lead or single arbitrator shall serve copies of the unredacted decision upon the parties in accordance with the timetable and requirements set forth in §1108.7(c). The lead or single arbitrator shall also serve copies of the redacted decision upon the parties and the Board in accordance with the timetable and requirements set forth in §1108.7(c). The arbitrator may serve the decision via any service method permitted by the Board's regulations.

(f) Service in the case of an appeal. In the event an arbitration decision is appealed to the Board, the lead or single arbitrator shall, without delay and under seal, serve upon the Board an unredacted copy of the arbitration decision.

(g) Publication of decision. Redacted copies of the arbitration decisions shall be published and maintained on the Board's Web site.

(h) Arbitration decisions are binding. By arbitrating pursuant to these procedures, each party agrees that the decision and award of the arbitrator(s) shall be binding and judicially enforceable in any court of appropriate jurisdiction, subject to the rights of appeal provided in §1108.11.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69416, Oct. 6, 2016]

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§1108.10   Precedent.

Decisions rendered by arbitrators pursuant to these rules may be guided by, but need not be bound by, agency precedent. Arbitration decisions shall have no precedential value and may not be relied upon in any manner during subsequent arbitration proceedings conducted under the rules in this part.

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§1108.11   Enforcement and appeals.

(a) Petitions to modify or vacate. A party may petition the Board to modify or vacate an arbitral award. The appeal must be filed within 20 days of service upon the Board of a final arbitration decision, and is subject to the page limitations of §1115.2(d) of this chapter. Copies of the appeal shall be served upon all parties in accordance with the Board's rules at part 1104 of this chapter. The appealing party shall also serve a copy of its appeal upon the arbitrator(s). Replies to such appeals shall be filed within 20 days of the filing of the appeal with the Board, and shall be subject to the page limitations of §1115.2(d) of this chapter.

(b) Board's standard of review. On appeal, the Board's standard of review of arbitration decisions will be narrow. The Board will review a decision to determine if the decision is consistent with sound principles of rail regulation economics, a clear abuse of arbitral authority or discretion occurred; the decision directly contravenes statutory authority; or the award limitation was violated. Using this standard, the Board may modify or vacate an arbitration award in whole or in part.

(1) Board decisions vacating or modifying arbitration decisions under the Board's standard of review are reviewable under the Hobbs Act, 28 U.S.C. 2321 and 2342.

(2) Nothing in these rules shall prevent parties to arbitration from seeking judicial review of arbitration awards in a court of appropriate jurisdiction pursuant to the Federal Arbitration Act, 9 U.S.C. 9-13, in lieu of seeking Board review.

(c) Staying arbitration decision. The timely filing of a petition for review of the arbitral decision by the Board will not automatically stay the effect of the arbitration decision. A stay may be requested under §1115.3(f) of this chapter.

(d) Enforcement. Parties seeking to enforce an arbitration decision made pursuant to the Board's arbitration program must petition a court of appropriate jurisdiction under the Federal Arbitration Act, 9 U.S.C. 9-13.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69416, Oct. 6, 2016]

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§1108.12   Fees and costs.

(a) Filing fees. When parties use the Board's arbitration procedures to resolve a dispute, the party filing the complaint or an answer shall pay the applicable filing fee pursuant to 49 CFR part 1002.

(b) Costs. The parties shall share the costs incurred by the Board and arbitrators equally, with each party responsible for paying its own legal and other associated arbitration costs.

[78 FR 29079, May 17, 2013, as amended at 81 FR 69417, Oct. 6, 2016]

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§1108.13   Additional parties per side.

Where an arbitration complaint is filed by more than one complainant in a particular arbitration proceeding against, or is answered or counterclaimed by, more than one respondent, these arbitration rules will apply to the complainants as a group and the respondents as a group in the same manner as they will apply to individual opposing parties.

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