Arbitration agreements are increasingly used to settle issues outside of the courtroom. Arbitration is just as expensive as litigation. These agreements are often signed by both parties before purchasing a car or even employment agreements. The terms are binding on each party, and must be followed with very little exception.
For example, imagine you and a friend agreed to sign a contract to work together on a project. The contract stated that you and your friend must arbitrate your grievances in front of an arbitrator determined by the contract before being able to sue in a court.
A grievance arose about the contract, and you and your friend began an arbitration process to resolve the dispute. During arbitration on the issue, you concluded you did not like the arbitrator for some reason. You would still be required to complete the arbitration hearing, and would not be able to bypass the hearing and go straight to a court. The reason courts are very unwilling to interfere or interrupt any arbitration process is out of respect for the parties’ freedom to contract. However, it is not likely that you can purchase a car without signing an arbitration agreement.
In the case of Norvell v. Parkhurst, the widow of a deceased partner wanted to interrupt an ongoing arbitration process and settle an unrelated matter in a court. An issue arose during arbitration regarding whether the living partner had properly followed the terms of the agreement. Instead of allowing the arbitrator of the dispute to come to a final decision, the deceased widow sent a request to the trial court to come to a decision regarding the issue. The trial court granted this request. However, the appellate court reversed the trial court’s interruption of the arbitration.
The appellate court held that it was error for the trial court to consider matters that the parties agreed to arbitrate. The burden was on the widow to establish that the arbitration agreement should not be enforced, which she had not done. Instead, it was proper to allow the arbitrator to proceed with its review of the records and resolve the dispute without intermediate judgments.
The lesson here is that if you sign an Arbitration clause, a court is going to enforce it. The Courts are unwilling to make intermediate judgments during an arbitration process. While there are narrow exceptions, Courts will almost always uphold the arbitration contract that both parties willingly signed. However, if there is a dramatic unforeseen situation that arose during arbitration, there may be ground for pausing the process.
It’s important to read the terms of any arbitration agreement before signing it. If you find yourself in a situation involving an arbitration dispute, you should have an experienced, knowledgeable attorney on your side to ensure that you make the best arguments. Contact INGRAM LAW LLC at 205-438-6666 for an attorney with the experience and knowledge that can make all the difference.