As businesses increasingly turn to arbitration to resolve disputes, it`s important to understand what constitutes a material breach of an arbitration agreement.

An arbitration agreement is a contract between parties that dictates how disputes will be resolved. It typically includes provisions on the selection of arbitrators, the process of arbitration, and the scope of disputes covered. A material breach occurs when a party fails to comply with a significant provision of the agreement.

One common material breach is the failure to select an arbitrator according to the agreed upon process. For example, if the agreement requires the parties to select an arbitrator within a certain timeframe and one party fails to do so, this would be a material breach.

Another material breach is the failure to pay arbitration fees. Most arbitration agreements require parties to share the costs of arbitration, including arbitrator fees and administrative fees. If one party fails to pay their share of the fees, this is a material breach that could result in the case being dismissed.

A material breach can also occur if a party attempts to litigate a dispute that is covered by the arbitration agreement. If the agreement specifies that all disputes must be resolved through arbitration, filing a lawsuit would be a material breach.

If a material breach occurs, the non-breaching party can seek remedies such as terminating the agreement, seeking damages, or asking the arbitrator to dismiss the case. It`s important to note that a material breach does not necessarily nullify the entire agreement, but only the specific provision that was breached.

To avoid material breaches of arbitration agreements, it`s important to carefully review and follow the provisions of the agreement. If disputes arise, parties should work together to resolve them according to the agreed upon process. Doing so will promote a smoother arbitration process and prevent unnecessary disputes.