Principal Attorney
Many business disputes never reach a courtroom. Instead, the parties resolve their disagreements through binding arbitration, a form of alternative dispute resolution that can often provide a faster and more private path than traditional litigation.
One of the most important documents submitted during the arbitration process is the position statement. Although it does not decide the outcome of the dispute, it helps frame the issues, explain each party’s legal arguments, and provide the arbitrator with an early understanding of the case. A well-prepared position statement can influence how the arbitration proceeds and establish the foundation for a party’s overall strategy.
What Is a Position Statement?
A position statement is a written submission that summarizes a party’s view of the dispute before or during arbitration. It explains the relevant facts, identifies the legal issues, outlines the requested relief, and highlights the evidence supporting that position.
Unlike a lengthy court brief, a position statement is typically designed to give the arbitrator a clear and organized overview of the case without unnecessary procedural detail.
Although arbitration rules vary depending on the administering organization and the parties’ agreement, position statements are commonly exchanged before the arbitration hearing begins.
Why Is a Position Statement Important?
The position statement often serves as the arbitrator’s first detailed introduction to the dispute. A thoughtful presentation can clarify complicated business relationships, identify the primary legal questions, and focus attention on the strongest evidence. Conversely, a vague or poorly organized submission may make it more difficult for an arbitrator to understand the issues before hearing witness testimony.
In many commercial disputes, the position statement also helps establish credibility. It demonstrates that a party has carefully evaluated the facts, understands the governing law, and has developed a coherent legal theory.
First impressions matter.
What Should a Position Statement Include?
While every arbitration is different, most effective position statements address several core topics:
- A concise summary of the dispute
- Relevant background facts
- The legal issues involved
- The applicable contract provisions or governing law
- Key evidence supporting the party’s position
- The damages or other relief requested
- A brief explanation of why the arbitrator should rule in that party’s favor
Supporting exhibits, contracts, correspondence, financial records, or other documents may also accompany the statement when permitted under the applicable arbitration rules.
How Does a Position Statement Differ From a Court Filing?
Although position statements often contain legal arguments, they generally serve a different purpose than motions or briefs filed in court.
Arbitration is intended to be more streamlined than litigation. Rather than focusing heavily on procedural disputes, a position statement usually concentrates on presenting the essential facts and legal arguments in a clear and practical manner.
The tone is often more direct, with an emphasis on helping the arbitrator understand the business dispute rather than addressing numerous procedural issues.
When Are Position Statements Used?
The timing depends on the arbitration agreement and the rules governing the proceeding.
Some arbitrators request position statements before the initial scheduling conference to better understand the dispute. Others require them shortly before the final hearing after discovery has concluded.
In more complex commercial matters, parties may submit additional pre-hearing briefs that expand upon the issues first introduced in the position statement. Understanding the arbitrator’s expectations is an important part of preparing an effective submission.
Common Business Disputes That Involve Arbitration
Binding arbitration appears in many commercial agreements because it allows parties to resolve disputes privately while avoiding many aspects of traditional litigation.
Businesses frequently encounter arbitration provisions in: Commercial contracts, partnership agreements, shareholder agreements, construction contracts, vendor agreements, employment agreements with executives, and certain franchise relationships. Whether arbitration is mandatory depends on the language contained in the parties’ agreement.
Preparing an Effective Arbitration Strategy
A persuasive position statement is only one component of successful arbitration. Businesses should also carefully evaluate the strength of available evidence, identify potential witnesses, understand the governing contract provisions, and consider the practical business objectives they hope to achieve through the proceeding.
Because arbitration decisions are generally more difficult to appeal than court judgments, thorough preparation before the hearing is particularly important. An organized strategy from the outset can significantly affect the outcome.
For additional information regarding commercial arbitration procedures, the American Arbitration Association provides guidance on its business arbitration rules and process.
Resolving Business Disputes Through Alternative Dispute Resolution
Binding arbitration can offer businesses an efficient and confidential method for resolving commercial disputes, but the process still requires careful preparation and a thorough understanding of the legal and contractual issues involved. A well-developed position statement helps establish the framework for presenting a persuasive case before the arbitrator.
At Sul Lee Law Firm, we represent Texas businesses in arbitration, mediation, and commercial litigation involving contract disputes, partnership conflicts, fiduciary duty claims, and other complex business matters. Whether your dispute is headed to arbitration or court, our team can help develop a strategy tailored to your business objectives.