Executive Summaries » Interplay Between Arbitration And The Courts

Interplay Between Arbitration And The Courts

February 10, 2014

Counsel choosing between arbitration and litigation when negotiating contracts need to consider the litigation implications of either decision. Parties choosing arbitration are not necessarily choosing to keep the matter out of court. Arbitration forums and the courts can interact in many ways, including judgment enforcement. Arbitration and litigation create a complex topography, and navigating it requires understanding and strategy; decisions made in one forum may have significant implications later in another. 

In house counsel and outside arbitration or litigation counsel therefore need to consider tactical steps in light of their strategic goals. The conduct of the arbitration needs to take into account the requirements of the venues where interim relief or recognition of the award may be sought and the resulting judgment executed.

Prior to the initiation of arbitration, or during its course, parties may need to seek interim relief from actions of the other party. The availability of judicial remedies to parties who are bound to arbitration, even before arbitration begins, varies among federal circuits as well as under state law. Relief may also be found within the arbitration itself.

Once judgment is entered, the award holder, now a judgment creditor, has the same rights as any other federal judgment creditor to enforce the judgment within the federal court. As disputes progress, counsel need to keep an eye on issues of asset dissipation and other efforts to thwart the award, and possibly complex, multi-jurisdictional efforts at judgment enforcement.

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