Partnerships empower entrepreneurs to combine their resources and expertise to achieve shared goals. However, like any relationship, partnerships can face conflicts and disagreements.
When you cannot resolve these disputes through informal means, arbitration may be the best alternative. By learning more about the role of arbitration in a dispute, you can make the best choice for the future of your business.
Arbitration is a dispute resolution process where a neutral arbitrator evaluates the case and makes a final decision. The arbitrator’s decision, or award, is legally binding and enforceable. This alternative to litigation offers several benefits for those in a partnership dispute.
Unlike court proceedings, which are typically public, arbitration takes place in a private setting. This allows partners to keep their business matters confidential and avoid public exposure.
Arbitration tends to be quicker than going to court. In the legal system, court cases can take months, if not years, to reach a verdict. In contrast, you can schedule arbitration more promptly. This can reduce the time partners must endure the stress and uncertainty of an ongoing dispute.
Partnership disputes often involve intricate business issues. Arbitrators are typically experts in the relevant field and can better understand the nuances of the conflict. This expertise helps ensure accurate assessments, increasing the chances of a fair outcome.
Once the arbitrator reaches a decision, it is binding on both parties. This finality can provide a sense of closure, allowing partners to move forward with certainty. Moreover, the decision is enforceable through legal channels if necessary.
As of September 2023, FINRA reports the filing of 2,443 new arbitration cases. Arbitration is the dispute resolution method of choice for many business owners and partners.