Articles Tagged with Arbitration

photo-arbitration-record-300x200An arbitration is an alternate dispute method that’s becoming increasingly popular and controversial. Thanks in part to that controversy Governor Brown signed into law in October a bill allowing a party to have a certified shorthand reporter transcribe any related proceedings. This may help in case a party wants to challenge the arbitration decision in court.

An arbitration is essentially a private trial.

  • A single arbitrator or a panel of arbitrators normally sit as judge and jury in the case. They are normally practicing attorneys or retired judges.

photo - arb. confirmationArbitration is an increasingly popular alternate means of dispute resolution. Instead of resolving a legal claim through the court system and having a judge or jury decide, the parties have the dispute decided privately. An arbitrator, or a panel of arbitrators, acts as judge and jury and decides the outcome of the case. This method is normally faster and less expensive than having a trial, but it also can add some extra hoops to jump through.

Unlike a judgment obtained during court proceedings, an arbitration award is not directly enforceable. It needs to be confirmed (or vacated if the losing party successfully challenges it) by court proceedings before it can be enforced.

  • If a petition is properly served and filed after an arbitration award has been rendered, the court will confirm the award as made, or, pursuant to applicable laws, it will correct the award and confirm it, vacate the award or dismiss the proceeding.
  • Changing or dismissing an arbitration ruling is rare. Under the law every presumption in favor of the validity of arbitration award is given. If a party claims the award is not valid, it carries the burden of proof.
  • A court won’t look into whether there was sufficient evidence to support the award or if the arbitrator’s reasoning was valid. Alleged errors of law by the arbitrator also won’t be reviewed. The losing party could claim that fraud, corruption or misconduct by the arbitrator(s), but that would be extremely difficult to prove.
  • Despite the vast space arbitrators are allowed to work in, they cannot completely make things up. They cannot exceed their powers by making decisions and awarding damages that are not authorized by law.

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photo - arb. awards corss bordersWe live in a global economy and California is a key participant. According to the U.S. Census Bureau last year the U.S imported goods worth $1.3 trillion in goods and exported $890 billion worth (this doesn’t include the value of services). With all this business being done mistakes will be made, contracts will be broken and legal disputes will arise. Those disputes may be addressed in arbitration hearings outside the U.S.

Arbitration is a non-judicial way to resolve legal disputes. Instead of having a judge or jury decide the matter one or more people sit as arbitrators and decide the case. These proceedings are meant to be a faster, less expensive way to resolve disputes, but they are not perfect. There must be a binding, legal agreement between the parties where they agree to have disputes resolved through arbitration.

If you have a dispute with a foreign company, depending on the law and facts of the case, the issue may go to arbitration where that foreign company is located or here in the U.S. If arbitration occurred overseas the successful party may try to have it enforced here in the U.S. These cases could be very complex because in addition to the laws underlying the dispute and the arbitration process, international law also comes into play.

There are two international treaties that cover enforcement of arbitration awards, the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which has 148 party states (most of the world’s nations, except Taiwan and some others) and the 1975 Inter-American Convention on International Commercial Arbitration with 17 ratifying states in the Americas. Both are similar. Through the Federal Arbitration Act an action to enforce an award
under either convention can be made.

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Settlement AgreementIn Unlimited Civil Cases – or those involving more than $25,000 – California law generally requires that both parties make an honest effort to resolve their legal dispute with alternative forms of dispute resolution, before finding themselves involved in costly business litigation and an unattractive trial.

This is known as Local Court Civil Rule 1E. It’s predominantly full of legalese but the underlying point is that in California cases where large investments or considerable sums of money are involved, parties to the matter will be required to attend and cooperate in either a Settlement Conference, Arbitration, Mediation or a combination thereof, prior to a trial date being set. If all goes well, you and the opposing party will come to a fair and equitable resolution and costly litigation can be avoided altogether.

Not only does this help relieve some of the excessive buildup of business disputes being heard in courts today, but also gives you and the opposing party an opportunity to find a win-win solution for everyone involved. The alternative is to wait months – sometimes even years – for a trial date. Then, when the big day finally arrives, you’re essentially throwing yourselves at the mercy of the court, facing an irreversible judge’s ruling that will ultimately result in one party winning and one party losing. Even with the best of business litigation attorneys on your side this is not a situation you want your company to be in at the end of the day.

So, settling out of court can not only salvage valuable business relationships and reputations, but also eliminate any lasting and negative effects that an ugly trial may have on your company; not to mention the legal fees you can save by settling out of court.

If you’re in the midst of an escalating business dispute, don’t rush off to fight for your day in court. You may have more favorable options that could save your corporation quite a bit of time, money and stress. Here are some basic steps to try and avoid business litigation by finding a legally sound and responsible alternative:

First of all, you should never tackle these types of issues on your own. If you don’t have in-house counsel, seek the advice of an experienced business litigation attorney who understands that not all legal arguments need to end up in front of a judge and jury. Sometimes the best approach to resolving a legal dispute is to start with a mediated conversation designed to address each element of every legal issue, one-by-one, in order to help guide both parties to a responsible and impartial solution. Judicial intervention, then, need only be introduced for the elements that can’t be resolved without outside involvement.

Once you’ve consulted with an attorney, you’ll likely have one of two primary prerequisites to litigation; either request an Early Settlement Conference or attend Arbitration/Mediation. Your attorney can help you to decide which is the most suitable choice for your distinct situation.

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