A few months ago, I had the honor of participating in a dispute resolution forum as part of a panel of legal experts from around the world. The panel, entitled “IRG Disputes Group Virtual Series: Staying Ahead of the Curve,” was hosted by the international professional services network IR Global. This post will summarize my comments from the second of three sessions.
The question posed to the panel in the second forum session was, “How do you go about securing an advantageous jurisdiction or legal code for post-arbitral enforcement proceedings, if not specified in an existing contract?” Most of the enforcement agreements that I have seen have already been addressed in pre-existing contracts. If you don’t have this agreement in place, you can agree on the enforcement location as you go into arbitration.
In the U.S., one or more state jurisdictions will be specified as acceptable locations. If the parties involved don’t come to any formal agreement as to jurisdiction, statutes in the individual states have their own procedures in place to permit enforcement for any party doing business in those states.
In the majority of arbitration enforcement situations, the most convenient strategy is to choose the state or state where the parties are already located. In most cases, the choice of state or states should not convey any significant advantage to any of the parties, either in enforcing a settlement or defending against one. This is because most states base their arbitration enforcement statues on the UAA, or Uniform Arbitration Act. This statutory language has served as a common denominator among participating states for 60 years. It helps to ensure that no party in an arbitration dispute has an unfair enforcement advantage based on the state in which they do business (with some relatively rare exceptions).
Other factors tend to play more important roles in enforcing post-arbitral proceedings, including convenience and cost factors. This is why I tend to encourage my clients to choose a state or states where an arbitration judgement award can be enforced with minimal effort. When the choice is made wisely, the post-arbitral proceedings are often as simple as one party writing a check to the other party for the award amount. By removing the extra struggle of trying to enforce a judgement in whatever state is listed as the state of jurisdiction, we may be able to eliminate a great deal of additional time and expense.
The final part of this three-part series will summarize my comments from the third session of the “IRG Disputes Group Virtual Series: Staying Ahead of the Curve” panel discussion, with a focus on arbitration clauses. You can find the first summary of the panel discussion HERE. The final installment of this series can be found HERE.
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This website and article have been prepared by Harrison Law, PLLC for informational purposes only and does not, and is not intended to, constitute legal or financial advice. The information is not provided in the course of an attorney-client relationship and is not intended to substitute for legal advice from an attorney licensed in your jurisdiction.
