In: Operations Management
Scenario: Your good friends, Jack and Tom, have just met with their company's accountant. They have received bleak news about their profits for last year. Jack and Tom have needed to upgrade their equipment but haven't had the money. They have recently had a small fire in their warehouse. In reviewing the documents, they realize that their insurance company will pay for the replacement of many of the operational tools even though they weren't damaged. Jack and Tom realize that the forms completed by their warehouse supervisor were not completely accurate although the forms contain no outright lies. Jack and Tom's insurance company has sent them a letter that has scheduled an arbitration to set the insurance payment that will be made to them.
Jack and Tom are your best friends and invite you to lunch to discuss these issues and get your advice.
Take a position on what you whether you would revise the forms - explain why or why not.
Considering the fact that the form filled by the supervisor was not accurate and the claim for machinery which wasn't affected was beyond the scope of the insurance coverage policy, I would request Jack and Tom to revise the forms and stick to the actual claim, or else they will lose out all their standings, as well they could be possibly alleged for fraud; hence they might end up with no reimbursement losing all the money.
Define arbitration and explain how it would work.
Arbitration can be defined as a legal technique for the resolution of disputes outside the courts, wherein the parties to a dispute refer it to one or more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), by whose decision (the "award") they agree to be bound. The third-party (arbitrator), hears the evidence brought by both sides and makes a decision. Sometimes that decision is binding on the parties. Arbitration typically provides a speedier resolution than proceeding in court. An arbitrator has considerable flexibility to consider any evidence he/she deems relevant and may issue an award based upon perceptions of fairness or equity and not necessarily on the evidence or rules of law.
Similar to a regular court proceeding, arbitration requires you to submit your issue to a single decision-maker (an arbiter or arbitrator) or a panel of arbitrators, whose decision is final and legally binding. In arbitration, the rules of evidence and procedure, which governs normal court proceedings, are relaxed to nonexistent. You have a better chance of “telling your story” and interacting one-on-one with the arbitrator. In addition, you have more control over who the arbitrator may be. Whereas, in a legal proceeding, you have no control over who the judge would be. Also, if you’re worried about publicity, arbitration may be more private.
Research and identify a case, company or situation that used arbitration to successfully resolve this situation
A WIPO Software Trademark Arbitration (Source: https://www.wipo.int/amc/en/arbitration/case-example.html)
A North-American software developer had registered a trademark for communication software in the United States and Canada. A manufacturer of computer hardware based elsewhere registered an almost identical mark for computer hardware in a number of Asian countries. Both parties had been engaged in legal proceedings in various jurisdictions concerning the registration and use of their marks. Each party had effectively prevented the other from registering or using its mark in the jurisdictions in which it holds prior rights. In order to facilitate the use and registration of their respective marks worldwide, the parties entered into a coexistence agreement which contains a WIPO arbitration clause. When the North-American company tried to register its trademark in a particular Asian country, the application was refused because of a risk of confusion with the prior mark held by the other party. The North-American company requested that the other party undertake any efforts to enable it to register its mark in that Asian country and, when the other party refused, initiated arbitration proceedings.
Following proposals made by the Center, the parties appointed a leading IP lawyer as sole arbitrator. In an interim award, the sole arbitrator gave effect to the consensual solution suggested by the parties, which provided for the granting by the hardware manufacturer of a license on appropriate terms to the North-American company, including an obligation to provide periodic reports to the other party.