We’ve written a lot about hashish arbitrations earlier than, and why these proceedings could make extra sense in your state of affairs (see hyperlinks on the backside of this publish!). However if you want quick, injunctive aid, a previous settlement to arbitrate can doubtlessly be disastrous.
Arbitration is way slower than different litigation to get began — although arbitration is often considered extremely environment friendly and having an general shorter timeline. If you wish to file a lawsuit in state or federal courtroom, you draft a grievance and file. In arbitration although, it’s important to put together a requirement, appoint an arbitrator or a number of arbitrators, and comply with guidelines. This will take a number of weeks.
The issue
Typically this isn’t a problem, however typically it’s. Many hashish litigation instances can contain requests for “injunctive aid” – this implies, a celebration will not be (solely) asking for cash damages, but in addition an order from the courtroom that restrains a celebration from doing sure acts.
A traditional instance is that if a hashish firm is suing considered one of its ex-employees for spreading its commerce secrets and techniques to the general public. In that case, you want quick aid – one thing like a brief restraining order, or a preliminary injunction, or a everlasting injunction. A courtroom has inherent authority to order that ex-employee to cease disseminating commerce secret data. Not solely that, however the courtroom’s authority is also backed by authorities authority to implement that order or injunction (in addition to energy to problem sanctions or cite events for contempt in the event that they don’t obey). Sadly, arbitrators don’t have the inherent authority.
The answer
So, when you intend to incorporate a binding arbitration clause in your hashish enterprise contract, take into account together with an exception or carve-out for injunctive aid claims. The purpose will probably be to permit the events to hunt injunctive aid by means of the courts however resolve all different claims by means of arbitration.
It’s vital to have a talented contract lawyer draft this clause, as a result of the particular language issues. The language must clarify that arbitration will not be the unique treatment in these conditions. However, the language additionally must clarify that together with a request for injunctive aid doesn’t hold your entire dispute out of arbitration.
For extra posts about hashish arbitration, please see: