If your contract requires mandatory arbitration and you fail to pay the arbitration fee in advance, you automatically waive your right to enforce an arbitration clause, the New Jersey Supreme Court said in a recently published case.
The court rules that the failure to abide by contractual language mandating the advancement of arbitration fees amounts to a “material Breach” of the contract, and therefore invalidates the arbitration clause and will result in the dismissal of an arbitration claim. The failure to advance fees ‘goes to the essence’ of the dispute resolution agreement and amounts to a material breach.
New Jersey courts had never before ruled whether a failure to advance arbitration fees amounted to a material breach of a dispute resolution agreement, but several other courts had reached that conclusion.
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By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Arbitration Attorney