A law review article, entitled “Stiffing the Arbitrators: The Problem of Nonpayment in Commercial Arbitration” by Goetz Fitzpatrick partner Neal M. Eiseman and associate Brian Farkas appears in the Harvard Negotiation Law Review. HNLR is one of the most heavily cited legal journals of arbitration, mediation and negotiation scholarship.
The article discusses the all-too-common situation where one party to an arbitration agreement fails to pay its share of the arbitration fees. These fees, which are ordinarily split between the parties, compensate the organization administering the arbitration and the arbitrators. Non-paying parties can “game the system,” in many cases, because some judges bounce the dispute back to the arbitrators. The arbitrators, meanwhile, can (and usually do) refuse to proceed unless fees have been remitted. This leaves the paying party without an acceptable remedy. The article discusses the varied approaches to this problem and recommends practical solutions to avoid it.
To read a full copy of the article, click here.