Question

Jr winery grows grapes and produces wine in the state of delaware. it purchases its corks from cork masters, a california cork importer. despite a written contract, cork masters has informed jr winery that it will immediately be raising the cost of corks 20 percent. jr winery disputes the added charges and claims a breach of contract. both companies agree that they want to resolve the dispute through binding arbitration. the arbitrator finds in favor of jr winery. what, if anything, can cork masters do if it wants to dispute the arbitrator's decision?

Answer 1

Generally, before a dispute is solved by an arbitrator, both parties must sign an agreement where they accept the arbitrator's decision and that makes it binding for both sides. Since both parties reside in different states (interstate commerce), federal law applies. The American Arbitration Act states that arbitration is a legal and valid way to solve disputes outside a courtroom and that the decisions taken by the arbitrators are final and binding.

In this case, Cork Masters must obey the arbitrator's resolution.