International dispute involving California company finds resolution

March 12, 2014

International dispute involving California company finds resolution

Article provided by Dorazio Law Office
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Business entities often have specific legal needs that are much different from those that most individuals require. When a business is international, or does business with foreign companies, disputes can produce complicated legal issues.

According to a report by the San Diego Business Journal, Accelrys, Inc., a company based out of San Diego, and Borealis AG, a company headquartered in Vienna, Austria, recently settled a dispute, in which Accelrys agreed to pay $16 million to Borealis. The dispute had been in the resolution process through ongoing arbitration, according to information filed with the United States Securities and Exchange Commission.

The dispute between the companies allegedly arose based on issues dating back to 2010, when Accelrys acquired a company called Symyx. Borealis claims that there were agreed-upon terms relating to professional services and software that were unmet. Through the arbitration process, the parties filed various claims against the other. The terms of the multi-million dollar settlement include no admission as to the liability of either party for any of the claims, and all outstanding claims would be released. The report indicates that nearly one-third of the settlement money will be paid by Accelrys, with the remaining funds paid by its insurance company.

The arbitration involving the companies was likely as complex and complicated as the products the highly technical companies produce. Still, for many companies dealing in international business transactions, arbitration is a favored means of dispute resolution. It is important that any contract between two businesses anticipate disputes, and provide for resolution of disputes as effectively and efficiently as possible.

The Chartered Institute of Arbitrators, a professional organization of those involved in dispute resolution, with members in over 110 countries, produced a report in 2011 surveying the costs and other results of International Arbitration. The survey indicated various findings:
-Two in every three international arbitrations were administered by an arbitral institution, meaning a specific group or body that governs the process. The Accelrys dispute was administered by the London Court of International Arbitration.

-The rate of recovery success was higher when the parties claimed smaller recovery amounts, and decreased consistently as the amount sought increased.

-The highest costs involved were external legal fees, followed by experts' fees, external expenses, witness fees, and arbitration management fees, respectively.

-The average arbitration was between 17 and 20 months long.

Arbitration can be an effective means of resolving business disputes, and each arbitration process will be different from another. The report from the Chartered Institute of Arbitrators was summed up with a fitting quote by Roland Burrows, a British legal scholar, who stated "Arbitration can cost just as much or as little as the parties wish it to cost."

If your business is in the process of contracting with another business, or if a dispute has surfaced, the assistance of experienced legal counsel can lead the way in your dispute resolution process, and help produce the best and most economical results possible.