Arbitration is a way parties can resolve their legal dispute without having to go to court in Michigan. It is a type of alternative dispute resolution (ADR), which also includes mediation and settlement conferences.
A court can order arbitration or it may be chosen by the parties. It can also be required in the contract that was signed. There are some organizations that can help individuals with their arbitration needs, such as the American Arbitration Association (AAA).
Arbitration can be similar to a trial but has fewer restrictions and rules. An arbitrator, or a neutral third party, hears the arguments and evidence from both parties and makes a decision. This person does not have to be a judge or an attorney.
Although arbitration is not as formal as a courtroom trial, it can be more formal than other types of ADR. It is common for the arbitrator to make a binding decision. In contrast, mediation is where a neutral third party helps the parties come to their own agreement.
Arbitration may be a non-binding arbitration or a binding arbitration. In a non-binding arbitration, the decision the arbitrator makes is only a recommendation and is not legally enforceable.
Having a non-binding arbitration lets the parties get expert advice and opinions about their issue without having to be bound to the arbitration outcome. If they are not satisfied with the outcome, they can take their case to court.
In contrast, in a binding arbitration, the decision the arbitrator makes is legally enforceable. The decision that an arbitrator makes is called an arbitration award.
The privacy provided by arbitration is one reason it is commonly used. The arguments and evidence that the parties present during arbitration, as well as the arbitration award, are not made public.
With a trial, on the other hand, the process is usually open to the public and becomes part of the public record. The arbitration process can protect sensitive information, including intellectual property, trade secrets, or personal family issues.
What Is an Arbitration Agreement?
There may be clauses in contracts that state the parties have to use an arbitration agreement to resolve any disputes they have related to the contract. These clauses can also be referred to as arbitration clauses.
Arbitration agreements are often in the body of the contract itself. They usually state that the parties to the contract are only permitted to use arbitration to resolve their issue.
Will an Arbitration Agreement be Enforced?
Individuals who signed a contract may want to know if a Michigan court will enforce the arbitration clause. When the contract involves maritime issues or crosses state lines, the Federal Arbitration Act (FAA) will typically overrule any state laws that limit enforcing a mandatory arbitration agreement.
When the FAA is not applicable, the laws that will apply are the laws of the state where the arbitration is held. It is typical for state and federal courts to enforce mandatory arbitration agreements if the circumstances indicate that the agreement is enforceable.
Arbitration agreement enforcement laws may vary by state. In Michigan, mandatory arbitration agreements are typically enforceable, unless there is a legal or equitable reason it should not be enforced.
A Michigan lawyer can help someone understand all of the details of their contract and whether or not the arbitration clause is likely to be enforced in court.
When Will a Court Enforce an Arbitration Decision in Michigan?
It can be very helpful to get an idea of whether or not a Michigan court will enforce an arbitration decision. In most situations, the parties involved with the arbitration will cooperate with the decision the arbitrator makes.
If one side wins an arbitration award, the party that loses may not want to comply with the arbitration award. When this happens, the winning party can request that the court confirm the award.
When a case is handled by the AAA, the parties to the arbitration can agree that the arbitration award can be entered as a judgment in federal or state court with jurisdiction over the issue. In addition, the parties are also able to agree that the award can be enforced in court.
When an arbitration award gets entered as a judgment by a court, it can be enforced in the same way as other judgments. All states, including Michigan, have their own rules that govern making the parties comply with an arbitration award.
After a non-binding arbitration, the award will not be legally enforceable. After the process is complete, if the parties are not satisfied, they can take their dispute to court.
In the legal sense, it may not seem like a non-binding arbitration serves a purpose. If, however, the parties want to present their issues and arguments to a neutral third party and get feedback, non-binding arbitration is an excellent resource.
A binding arbitration, on the other hand, will be more like a courtroom trial, as the parties must follow the decision made by the arbitrator. During this process, individuals can testify under oath and depositions can be taken as evidence.
If an arbitration is ordered by a court, it is called a mandatory arbitration. When this happens, the arbitrator may be sponsored by the ordering court.
When a court orders an arbitration, the parties have to comply or they can face legal consequences. They must also follow the terms of the arbitration award. Additionally, the parties will not likely be able to file a lawsuit to resolve their dispute.
What if an Arbitration Agreement Is Violated in Michigan?
In the State of Michigan, when an arbitration agreement is violated, it may be invalidated. The parties may have to go to court or try other legal remedies to resolve their legal issue.
A violation of an arbitration agreement may arise if one of the parties does not follow the agreement, such as by not paying for the arbitration or by not asserting their right to arbitrate in a timely manner, leading to a potential waiver of the right to arbitrate.
Depending on what kind of violation happened, the court may still allow the parties to participate in arbitration or it may let the case proceed to court. When, for example, a party will not participate in the mandatory arbitration, they can face a contempt order or be subject to an injunction.
People can also be ordered to pay monetary damages for breach of contract. For more information on what may happen when an arbitration agreement is violated, it is essential to schedule a Michigan lawyer consultation.
Do I Need the Help of a Lawyer for My Arbitration Issue in Michigan?
Enforcing an arbitration agreement or award in Michigan can be very challenging without help from a Michigan business lawyer. Even though the arbitration process may be less formal than a trial, when you have a lawyer’s help from the beginning, you are much more likely to have a favorable outcome.
You can use LegalMatch’s free and convenient attorney matching services to find a Michigan business attorney near you who can help you resolve any concerns or disputes you have. Get started today, as it will only take you about 15 minutes to complete the online submission process and be matched to licensed and prescreened attorneys in Michigan.
