Business transactions are complex in nature, especially when involving major business organizations and deals. Even when negotiating with long-time business partners, there is no way to predict when issues and disputes may arise. All parties will want the best deal that favors them; unfortunately, this isn’t always possible with business negotiations and deals. Some parties will gain more than others, and vice versa. Therefore, it is crucial to involve the services of a law firm or legal service to perform arbitration in case of business disputes in New York.
What is Arbitration and its Role in Business Disputes?
Arbitration is a form of alternative dispute resolution employed for businesses going through a dispute process. Before you can enter the arbitration process, both parties must sign an arbitration agreement. Most business and commercial contracts have a clause that allows all parties to pursue arbitration and other dispute resolution methods.
Once all parties agree to undergo arbitration, you must designate an arbitrator. It should be any party without bias to any parties involved in the business dispute to ensure parity and neutrality. It works like a paid private trial wherein a third party settles the dispute based on the evidence presented. The goal is to resolve the dispute among the parties involved instead of going to court, which is more costly and time-consuming.
It also works like a court trial wherein lawyers from all sides present an oral argument. The decision made by the arbitrator is considered final and binding. You must assess the situation and the facts surrounding the dispute before entering the arbitration process. In particular, you must consider the potential benefits and drawbacks.
Benefits of Arbitration for Business Disputes in New York
Quicker and flexible resolution
Arbitration is faster and more flexible in delivering a resolution than a traditional court. It is especially true in New York, wherein courts handle thousands of cases, which could seriously delay your being able to set a court trial date, thus extending the resolution of your business disputes. Arbitration is easier and faster to schedule so that you can start arbitration hearings sooner.
Simplified rules and procedure
Arbitration hearings are straightforward and less complex than court trials. They do not follow the same processes as a public court. You can start the arbitration proceedings immediately which saves time and involves less cost.
Maintain privacy
As mentioned, arbitration for business disputes in New York is held privately. Therefore, you can resolve disputes in privacy instead of in a New York Court wherein everyone can witness the proceedings.
More affordable
Arbitration hearings are executed faster, and have more finality once the arbitrator releases their final decision. In contrast, the court allows the opposing party to appeal the court’s decision. You can end up saving more on attorney’s fees with arbitration.
Potential Drawbacks of Arbitration for Business Disputes in New York
No chance for appeal
The decision of the arbitrator is considered final with no chance to appeal. Therefore, you must have a strong case and all the necessary evidence to ensure that the arbitrator’s decision will favor your party. Otherwise, you give up your right to appeal.
Unpredictable outcomes
Arbitration follows a uniquely different format from the court proceedings, which could lead to unpredictable outcomes. An arbitrator could base their decision on evidence that a court wouldn’t typically honor in trial. It could be damaging to your case.
Question of fairness
The arbitrator holds power in resolving business disputes in New York as they make the final decision. The validity of their decision weighs heavily on ensuring that it is a completely unbiased third party.
Ways to Prevent Business Disputes
While it’s essential to understand the role of arbitration in handling business disputes in New York, the goal is to prevent disputes. Here are suggestions on how to minimize the risk of being involved in a business dispute.
- Draft legally binding contracts. Hire a law firm or lawyer to draft your business contracts and ensure that all parties sign that contract. A clear and well-written contract written by a legal expert can help avoid future disputes.
- Seek legal advice. If there are any potential misunderstandings or confusion in the contract or business deal, seek advice early. It is easier to resolve business disputes at the onset instead of waiting for the conflict to grow more serious.
- Keep everything documented. Keeping written records of all paperwork involved in a business transaction or negotiation is good business practice. Keep a copy of emails, notes, loan documents, meeting minutes, accounting reports, etc. The more documents and evidence you have, the stronger your case should the other party dispute your case.
