Arbitration and Shah v. Shah

There are many options open to a couple who has decided to divorce. It
is becoming more and more common now that the couple will ultimately settle
some or all of the issues involved in their divorce through mediation
or arbitration. Arbitration is a process through with the parties agree
on a neutral third-party who will hear evidence from both sides and then
make a determination. This decision is often binding, just as a decision
from a judge would be. There are many advantages to arbitration, including
a divorce reaching a quicker conclusion and without having to have a public
divorce trial. However, the parties must agree to submit to mediation.
In a recent case styled
Shah v. Shah, the New Jersey Appellate Court was faced with the issue of what to do
in a case where parties agree to arbitrate, but the arbitration then never happens.

In that case, the parties resolved some, but not all, of the issues in
their divorce in 2003. At that time, they entered into an agreement to
submit the remainder of their issues to an arbitrator. Although they agreed
on an arbitrator and paid his fee, several years then passed without the
parties going to arbitration. He eventually returned the retainer. In
2008, the parties agreed on a new arbitrator, but neither party took any
steps to actually retain him. In 2009, the husband filed a motion to compel
arbitration, as per the parties’ agreement. The court duly appointed
a new arbitrator. However, arbitration never happened with that arbitrator,
either, as neither party ever signed his retainer agreement. Finally,
in 2015, the husband once again requested that the court compel arbitration.
The wife filed her own motion, asking the court to terminate the parties’
agreement to arbitrate. The trial court granted the wife’s motion,
due in part to a determination that the parties had waived their right
to arbitrate. The husband appealed.

The Court of Appeals determined that the trial court had made the correct
decision in finding that the parties had waived their right to arbitration
by not proceeding for the twelve years following the initial agreement.
The court found that the parties had unduly delayed in going to arbitration,
which was especially true in light of the husband’s admission at
the motion hearing that he failed to move forward with the third arbitrator
in light of his unhappiness with the arbitrator’s fee schedule.

We are experienced in helping our clients understand their rights and responsibilities
under settlement agreements. Call us today at (732) 529-6937 and we can
talk about your divorce and what we can do to help it to its conclusion.