For general counsel Jonathan B. Wilson, arbitration started to lose its gloss when the much-vaunted method of resolving cases quickly and cheaply landed his company in a costly, protracted court battle over an issue that, by contract, never should have ended up in court at all.

The trouble started when a customer sued Wilson’s employer, Interland Inc., in federal court, alleging breach of contract. Interland, an Atlanta-based Web services provider, motioned for dismissal, citing the terms of service in its customer agreement — which stated that such disputes would be resolved via arbitration rather than litigation.

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