No matter how well written a contract is, or how genuine the parties’ intentions are in performing its obligations, unforeseen disputes frequently arise and can be especially detrimental in the entertainment industry where there are numerous contracts required for nearly every production.
Due to the amount of individuals and companies involved in a production, a dispute between only a few parties can cause a major disruption to the entire project. It occurs so frequently, that a majority of entertainment contracts utilize an out-of-court system to help expedite the dispute resolution process, namely, arbitration.
What is Arbitration?
In short, arbitration is a form of alternative dispute resolution that allows a neutral third party to hear from both parties and decide on a resolution that is confidential, binding and often not eligible for appeal. It circumvents procedural and statutory requirements required in traditional state and federal courts and is also unrestricted by the limited budget and staff resources that contribute to an already lengthy and drawn out litigation process.
Should I use arbitration?
It depends. Often in entertainment contracts, an arbitration provision for dispute resolution is already written into the agreement should a dispute arise. There are many different forums for arbitration and each forum has its own rules. For instance, the Independent Film & Television Alliance (“IFTA”) has guidelines to which the parties agree and submit, and in that instance an IFTA arbitrator will be assigned to the case.
Careful planning during the drafting and negotiation stage of an agreement will not only minimize future disputes during performance of the contract, but also ensure that the most advantageous dispute resolution process will be implemented in the event of a dispute.
For more information, visit our website or contact Shahrokh Sheik to request a consultation. Our team specializes in business and entertainment transactions and litigation and can ensure (i) your agreements are properly drafted to provide the right type of dispute resolution protection and (ii) you are adequately protected in the event you have to initiate or defend an arbitration.