Recently, a certain cell phone company changed its terms of service from "your only recourses are arbitration or small claims court" to "your only recourse is arbitration." Since this company doesn't have the greatest record for responding to complaints, this has left the company's customers wondering, what happens if a customer follows all procedures to file for an arbitration, and the company simply ignores it? Would this invalidate the arbitration agreement and restore their right to sue? If a company could just ignore arbitration requests, wouldn't that make it essentially impossible for anyone to pursue any claim against the company?
what happens if a customer follows all procedures to file for an arbitration, and the company simply ignores it?
The customer might prevail on the basis that the company failed to appear at arbitration, but see DaleM's comment regarding the customer's need (at least in some jurisdictions) to prove his claim even in that scenario. Regardless, it is not in the company's best interest to ignore the proceedings that ensue from customer's filing for arbitration.
Would this invalidate the arbitration agreement and restore their right to sue?
Not really. In fact, filing suit instead of filing for arbitration would give the company an opportunity to move [in court] for dismissal or to compel arbitration on grounds that the customer knew he ought to proceed with arbitration. Altogether this would subject the customer to delays and greater expenses than if he filed for arbitration regardless of company's lack of response.