Sunday, August 1, 2021

Mediate First

Be careful not to jump the gun into arbitration when a contract requires other alternative dispute resolution processes as conditions precedent. An appellate court in Texas affirmed the vacatur of an arbitration award because mediation was a condition precedent to arbitration under the governing contract and was not satisfied or waived by the parties prior to arbitration. In affirming the vacatur, the court held that the dispute was never properly before the arbitrator and therefore exceeded his powers in issuing the award. Sometimes an arbitrator in a private arbitration is not given a copy of the entire contract upon being selected. This needs to happen early and counsel should ensure they are on the same page procedurally in order to avoid an expensive and wasted outcome. The agreement at issue essentially stated any controversy shall be resolved by mediation, and if such mediation is unable to resolve it, then exclusively by binding arbitration. The court reasoned that the controversy was not properly before the arbitrator unless and until the parties mediated. There was no sympathy to the appellant’s repeated attempts to mediate with appellees prior to arbitration and the court held ignoring such demands was not inaction or a waiver of the right to mediate. See more here-- and