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Can a Court Decline to Enforce a Business Settlement After an Arbitration Process?

Are you unhappy about the settlement that your small business obtained from a larger company during an arbitration process? Read on and discover some of the circumstances under which you could ask a court of law to rule that the settlement is unenforceable. 

Doubts About the Arbitrator's Impartiality

The arbitration clause in the agreement that your small business signed with a larger company may have given the large company the right to select an arbitrator in case there was a business dispute that developed in the course of the two businesses relating with each other.

However, the chosen arbitrator, such as an executive of the big company, may have been biased. You can ask a court of law to disregard the settlement that you accepted if the settlement was agreed upon during an arbitration process that was handled by an arbitrator who wasn't neutral.

Lack of a Written Settlement

You can also ask a court of law to rule that a settlement is not enforceable because the settlement was not documented and signed by both parties to the dispute. Chances are high that the court will agree with you because it is very hard to enforce a settlement whose terms are not spelt out in writing.

Imposition of Unreasonable Fees

Another argument that you can present in your quest to nullify a business settlement is the imposition of unreasonable fees upon you as facilitation for the arbitration process. Usually, both parties in a dispute share the costs of the arbitration process.

You can ask a court of law to disregard a settlement awarded to you after an arbitration process if most of that settlement will be deducted as fees for the arbitration process. The court can then review the settlement and decide on an equitable way to satisfy the aggrieved party in the dispute.

No Chance to Present Evidence

Any dispute resolution process should reasonably permit both sides in the conflict to present evidence to support their claims. It may, therefore, be unfair to you in case the arbitration process from which you were awarded an unfavourable settlement denied you a chance to provide supporting evidence to your claim. A competent court can nullify the settlement if it was obtained after a process that denied you an opportunity to provide evidence to prove your claim.

As you can see, it is not a foregone conclusion that you are bound to accept any settlement that is offered to your small business after an arbitration process. Consult a business attorney for advice on how you can overturn a binding arbitration outcome if you feel that the process was irregular in any way.