Podcast Episode 2—Confirming my arbitration award in Texas. What do I need to know?
Podcast Episode Timestamps
00:00 — Topic introduction
00:34 — The fact pattern
00:47 — Applicable law (CPRC ch. 171)
00:55 — How this should work in Texas, Generally
01:15 — Digging Deeper into the Statute
02:30 — Recovery of Attorney’s Fees?
02:48 — Vacating, Modifying, or Correcting an Arbitration Award
04:14 — Where to File the Application to Confirm the Arbitration Award
05:08 — Two Things Every Applicant will Wish was Included in the Agreement to Arbitrate
05:46 — Some Takeaways from this Episode
06:25 — Digression about Debtor-Friendly Nature of Texas and Post-Judgment Collections
07:46 — Digression into TUFTA (Texas Uniform Fraudulent Transfer Act)
08:21 — How Arbitration Confirmation Proceedings can Go Sideways (and why a good attorney’s fees provision in the arbitration agreement can be so important)
09:13 — Hopefully, the Debtor will become Interested in Paying (but if not, post-judgment discovery will allow you to investigate deeply)
09:57 — Conclusion
10:02 — Outro (and disclaimer)
You provided goods or services pursuant to a contract that included an arbitration provision. Your customer failed to pay so you pursued the arbitration and obtained an arbitration award. Congratulations! Unfortunately, the debtor has refused or failed to pay the award.
So, What Should You Do Next?
Because the debtor is a business or individual located in Texas, the next step is to prepare and file an application to confirm the arbitration award in court—with the end-goal of getting a Texas judgment against the debtor. Then, collection of the debt can be pursued via post-judgment procedures.
The Federal Arbitration Act and chapter 171 of the Texas Civil Practice and Remedies Code provide concurrent jurisdiction to state and federal courts for confirmation of the arbitration award. This blog post and podcast focusses on specific relevant provisions of the CPRC.
Confirmation is not discretionary and it is not a chance for the debtor to “take a second bite at the apple.” 171.087 mandates that the court “shall confirm the award” unless very specific grounds are proven to vacate, modify, or correct the award under .088 or .091.
Generally, the narrow grounds to vacate, modify, or correct the award must be pursued quickly—i.e., EITHER within 90 days after learning of the corruption, fraud, or other undue means of obtaining the award; OR within 90 days of delivery of a copy of the award for the defenses of (a) the rights of a party were prejudiced by evident arbitrator partiality, arbitrator corruption, or arbitrator misconduct; (b) the arbitrators exceeded their powers, refused to properly postpone a hearing, refused to hear material evidence, or conducted the hearing contrary to the rules in a manner that substantially prejudiced the rights of a party; or (c ) there was not an agreement to arbitrate.
Where to File the Application to Confirm the Arbitration Award
The rule (CPRC 171.096) instructs to file the application in the county where the debtor resides or has a place of business (or, if there is no such place, then in any county); where the agreement specifies, if any county in the state is specified; or where the arbitration was held, if it occurred in Texas. But if the applicant happens to file in the wrong county, the opponent only has 20 days from service of process to object to the location.
Disclaimer: This audio and blog post are for informational purposes only and should not be misinterpreted as legal or other professional advice. If you have a legal question, you should consult with an attorney in your jurisdiction. Thank you for listening to the Keith Law, PLLC podcast.