421H-6 Arbitration of disputes. (a) At the request of any party, any dispute concerning or involving one or more stockholders and a limited-equity housing corporation, its board of directors, managing agent, or one or more other stockholders relating to the interpretation, application, or enforcement of this chapter or the corporation's charter of incorporation, bylaws, or administrative rules adopted in accordance with its bylaws shall be submitted to arbitration. The arbitration shall be conducted, unless otherwise agreed by the parties, in accordance with chapter [658A] and the Condominium Property Regime Rules on Arbitration of Disputes of the American Arbitration Association; provided that where any arbitration rule conflicts with chapter 658A, chapter 658A shall prevail; provided further that notwithstanding any rule to the contrary, the arbitrator shall conduct the proceedings in a manner which affords substantial justice to all parties; provided further that the proceedings shall be concluded ninety days after the commencement of the arbitration unless extended by mutual consent of the parties involved and their counsel. The arbitrator shall be bound by rules of substantive law and shall not be bound by rules of evidence, whether or not set out by statute, except for provisions relating to privileged communications. The arbitrator shall permit discovery as provided for in the Hawaii rules of civil procedure; provided that the arbitrator may restrict the scope of such discovery for good cause to avoid excessive delay and costs to the parties or the arbitrator may refer any matter involving discovery to the circuit court for disposition in accordance with the Hawaii rules of civil procedure then in effect.

(b) Nothing in subsection (a) shall be interpreted to mandate the arbitration of any dispute involving:

(1) The mortgagee of a mortgage of record;

(2) The developer, general contractor, subcontractors, or design professionals for the project; provided that when any person exempted by this paragraph is also a stockholder, a director, or managing agent, such person, in those capacities, shall be subject to subsection (a);

(3) Actions seeking equitable relief involving threatened property damage or the health or safety of stockholders or any other person;

(4) Actions to collect assessments which are liens or subject to foreclosure;

(5) Personal injury claims; or

(6) Actions for amounts in excess of $2,500 against a limited-equity housing corporation, a board of directors, or one or more directors, officers, agents, employees, or other persons, if insurance coverage under a policy or policies procured by the limited-equity housing corporation or its board of directors would be unavailable because action by arbitration was pursued. [L 1987, c 105, pt of 1; am L 1990, c 34, 26; am L 1995, c 11, 18; am L 2001, c 265, 4; am L 2002, c 129, 1]


Cross References


Privileges under Hawaii Rules of Evidence, see 626-1, article V.


Rules of Court


Discovery, see Hawaii Rules of Civil Procedure, part V.


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