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Orr v. American Arbitration Assn.

A-5964-96T5 (N.J. Super. App. Div. 1998) (Unpublished)

ARBITRATION; FEES—A court should not interfere with an arbitrator’s decision to suspend proceedings pending receipt of its fee from a recalcitrant litigant, even if the unwillingness to pay is an attempt to avoid the arbitration.

In this arbitration dispute, one of the parties refused to pay the arbitrator. As a result, the arbitrator ruled that the matter would not proceed before the outstanding balance was paid in full. The arbitrator then gave the other party the option of paying the outstanding balance. Instead, the complainant sought a court order directing the arbitrator to issue a decision in the arbitration and compelling the non-paying adversary to pay the outstanding arbitration fees. The Chancery Division ordered that if the non-paying party wanted to enter a defense in the arbitration, it would have to pay the arbitration fees. It also ordered that if the complainant paid the outstanding arbitration fees, the arbitrator would be required to award reimbursement of those fees to the complainant.

The Appellate Division, fully conscious that the non-paying litigant had the power to intentionally create an administrative problem in an attempt to avoid arbitration, nonetheless reversed the Chancery Division. The Court chose to categorize the issue of fee payment as an administrative problem fully within the province of the arbitrator. Even though the non-paying party succeeded in suspending the arbitration proceedings by not paying its fees, the Court saw no reason to judicially interfere with the arbitrator’s resolution of the administrative problem. In addition, the Appellate Division felt that the Court’s order went beyond merely ordering the non-paying party to pay its share of the fees when the Chancery Court wrongly directed certain arbitration remedies in the event of a party’s failure to pay.


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