Chapter 12 - § 12.6 • FAILURE|INABILITY|REFUSAL OF ONE PARTY TO PAY FEES

• Jurisdiction: Colorado

§ 12.6 • FAILURE/INABILITY/REFUSAL OF ONE PARTY TO PAY FEES

None of the statutes has direct provisions relating to the arbitrator's fees and expenses.

What happens if a party is unable or unwilling to pay its share of the arbitration fees and costs?

• Annot., Liability of Parties to Arbitration for Costs, Fees and Expenses, 57 A.L.R. Fed.3d 633.

CRUAA

The CRUAA, C.R.S. § 13-22-221 (2016), "Remedies - Fees and Expenses of Arbitration Proceeding," in subsection (2) provides:

(2) An arbitrator's expenses and fees, together with other expenses, shall be paid as provided in the award.

This provision provides little assistance to the arbitrator who desires progress payments of his or her fees as the arbitration proceeds. It is possible that an award would provide for one or both parties to pay the arbitrator unpaid fees. Query if it could be reduced to judgment?

AAA Rules

The Commercial Arbitration Rules of the AAA, Rule R-57, "Remedies for Nonpayment," provides:

If arbitrator compensation or administrative charges have not been paid in full, the AAA may so inform the parties in order that one of them may advance the required payment.
(a) Upon receipt of information from the AAA that payment for administrative charges or deposits for arbitrator compensation have not been paid in full, to the extent the law allows, a party may request that the arbitrator take specific measures relating to a party's non-payment.
(b) Such measures may include, but are not limited to, limiting a party's ability to assert or pursue their claim. In no event, however, shall a party be precluded from defending a claim or counterclaim.
(c) The arbitrator must provide the party opposing a request for such measures with the opportunity to respond prior to making any ruling regarding the same.
(d) In the event that the arbitrator grants any request for relief which limits any party's participation in the arbitration, the arbitrator shall require the party who is making a claim and who has made appropriate payments to submit such evidence as the arbitrator may require for the making of an award.
(e) Upon receipt of information from the AAA that full payments have not been received, the arbitrator, on the arbitrator's own initiative or at the request of the AAA or a party, may order the suspension of the arbitration. If no arbitrator has yet been appointed, the AAA may suspend the proceedings.
(f) If the arbitration has been suspended by either the AAA or the arbitrator and the parties have failed to make the full deposits requested within the time provided after the suspension, the arbitrator, or the AAA if an arbitrator has not been appointed, may terminate the proceedings.

A Fifth Circuit decision involved the AAA directing the parties to make deposits to cover the hearing fees and expenses.¹⁸ The claimant paid its share, but the respondent did not, asserting that it had no funds or assets to pay its share of the deposits. The claimant refused to pay the respondent's share. Pursuant to Rule R-54 (now R-57), the panel indefinitely postponed the hearing.

The claimant commenced the civil action to compel the respondent to pay its portion of the deposits...