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Ely
Ely, Counselor at Law
Category: Legal
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If my franchise agreements requires me to arbitrate in a different

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If my franchise agreements requires me to arbitrate in a different state vs. California in which i have the franchise business, can the arbitration be moved to California vs. the state which is listed as location (Connecticut) of the arbitration process in the franchise agreement?
Hello friend. My name is XXXXX XXXXX welcome to JustAnswer. Please note: (1) this is general information only, not legal advice, and, (2) there may be a slight delay between your follow ups and my replies.

I am sorry for your situation. On this website, I do not always get to give good news, and I am afraid that this is one of these times.

If your contract states that you must arbitrate in Connecticut, then the arbitration state cannot be moved to CA unless the other side agrees to the relocation.

A clause spelling out the jurisdiction for a legal action, mediation, and/or arbitration is generally binding if included in such a contract, if it contains such limitations. Advanced Micro Devices, Inc. v. Intel Corp., 885 P. 2d 994 - Cal: Supreme Court 1994.

So if the other party agrees (in writing) to relocate the arbitration to CA, then yes. However, if they do not, I am afraid that the matter for arbitration is placed in CT.

Please note: I aim to give you genuine information and not necessarily to tell you only what you wish to hear. Please, rate me on the quality of my information and do not punish me for my honesty. I understand that hearing things less than optimal is not easy, and I empathize.

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Customer: replied 3 years ago.

is there a california state law that requires arbitration procedure to be conducted in california and not anywhere else?

K,

Thank you for your follow up.

is there a california state law that requires arbitration procedure to be conducted in california and not anywhere else?

I am afraid not. No provision under the Business and Professions Code, Code of Civil Procedure, Civil Code, or Commercial Code specifically mandates that a matter must be arbitrated only in California. You can do a search for this yourself here. The contractual clause that names the jurisdiction in such a matter normally controls.

Gentle Reminder: Again, surely you prefer that I be honest in my answer – please remember that rating negatively due to receiving bad news still hurts the expert – it is simply the way that the system is set up. Please use REPLY button to keep chatting, or RATE my answer when we are finished. (You may always ask follow ups free after rating.)
Customer: replied 3 years ago.

is there no way to move arbitration procedure to california from connecticut, if the franchisor does not agree to it? rumors are that all arbitrators are indirectly bought out by the franchisor because of the frequency of arbitration proceedings and in order to continue to earn those big fees, 99% of time arbitrators always rule in favor of the franchisor. the franchisor is a HUGE corporation with over 25000 franchisees in US and international arena.

Ketan,

is there no way to move arbitration procedure to california from connecticut, if the franchisor does not agree to it?

Correct, there is no way. Granted, this is impractical to you, but this is part of the reason why they insist on inserting this clause into the contract - to discourage the arbitration since it would be in another state. One can always object to this clause, of course, but it has to be done at the time of the formation of the contract.

99% of time arbitrators always rule in favor of the franchisor.

This is not true - at least it should not be. The whole point of the arbitrator is that they should be neutral. If one feels that they were not, then the arbitration award may always be appealed to the Court, citing the arbitrator's lack of neutrality/fairness, and if so, the Court (if agrees) will set it aside and hear the matter anew. But the answer remains in that the original arbitration must be brought in whatever state the contract states it should be. Again, I am sorry.

Gentle Reminder: Please use the REPLY button to keep chatting, or RATE and submit your rating when we are finished.
Customer: replied 3 years ago.

a local california attorney is telling us that there is a state law in california that requires arbitration in this state and not elsewhere and she is "VERY CONFIDENT" according to her but we have not proceeded with her services yet. how do you feel about this local attorney's response?

Ketan,

In CA, statutes about arbitration may be found in the California Code Sec. 1280 et seq, here. If you look through it, you will find nothing that specifically states that any arbitration must be brought within the state.

You and her may have miscommunicated and you may have simply told her that there is a clause for arbitration (in which case, if so, then one may use CA as the state of jurisdiction, possibly), but have not told her (or she did not hear) that the clause also contains a LIMITATION which mandates that the arbitration takes place in CT.

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Customer: replied 3 years ago.

thanks ely. will research more and get back to you if need further clarification.

You are very welcome. Good luck, and please don't forget to rate my answer in one of top three faces and then SUBMIT – it is the only way I get credit for my time with you – or, please REPLY to keep on chatting – I want you to be satisfied.

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