Arbitration Award in Your Favor? Now What?

Arbitration Award in Your Favor? Now What?Your customer didn’t pay. Because your contract required you to go to arbitration, you did. The arbitration was held and you won your case. Award was rendered in your favor for the full principal balance due together with costs and interest. A copy of the arbitration award was mailed to the customer but you still haven’t been paid. Can you now go ahead, enforce the award and force payment?

You cannot execute on an arbitration award. The award is not enough to force your non-paying customer to pay. The award must be “confirmed” with the State Court to become an enforceable judgment. Only when you have a judgment can you seize assets to satisfy your claim.

Confirming an award is done in State Court. You will need to begin a special proceeding based upon the Arbitration Award. It is then that the non-paying customer will have an opportunity to contest the award (on limited grounds). The Judge will render a decision and if the award is confirmed, you will be entitled to enter a judgment.

Many have clauses in their contracts which provide that in the event of a fee dispute, arbitration or mediation may be required. Understanding the process and procedures and how they affect you as a creditor is vital. To learn which fee dispute clause should be in your contract contact our office.