Thomas Martin Law Firm recently secured a substantial award for damages for a client involved in a contract dispute in commercial arbitration in New York City. The client, a Denmark-based company engaged in international business, suffered a six-figure US$ loss due to breach of a contract by a U.S. based business partner.
Because the contract contained an arbitration clause that called for arbitration of disputes through the American Arbitration Association to be conducted in New York City, the client avoided having to file a lawsuit with the state courts in the state where the U.S. business partner was located.
Attorney Thomas Thorup represented the client in the arbitration matter, from the filing of the arbitration complaint through the final arbitration hearing before the appointed arbitrator at the American Arbitration Association’s offices in Manhattan, and the arbitrator ultimately awarded the client the entire amount of damages claimed. The entire process lasted around eight months.
The case is a good illustration of the advantages that, in our experience, come with having – good – arbitration clauses in international business contracts with U.S. business partners, as opposed to having to file lawsuit with the regular U.S. state courts. While the arbitration process does involve the added costs of fees to the arbitration institute and the appointed arbitrator(s), it is on the other hand, most often, a much more pragmatic and faster process, which has the added benefit of providing confidentiality with respect to both the parties’ identities and the nature of the dispute.
Lawsuits before the regular courts often take 1-2 years or more, and typically involve substantial work for the parties’ attorneys regarding procedural issues, thereby often greatly increasing the total costs for the clients.
Further, there is no mutual recognition of court judgments between the U.S. and Danish/European courts. Thus, a judgment from e.g. a Danish court against a U.S. counterpart would not (necessarily) be recognized by a U.S. court, and vice versa.
In contrast, because both the U.S. and Denmark (and most countries) are parties to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958, an arbitration award won in e.g. Denmark will be recognized and enforced by the courts of the U.S. While the drafting of a good contract can most often keep you out of legal disputes altogether, it is worth also to agree on the best method for dispute resolution – before disputes arise. At thomasmartinlaw.com, we are attorneys admitted to practice law in both Denmark and the United States and we assist our clients with both contract drafting (whether Danish or U.S. contract law applies), as well as with dispute resolution, both in Denmark and the United States.
Copenhagen, September 24, 2019
Thomas Thorup, advokat (H) (Denmark), attorney (California, U.S. Supreme Court)