Arbitration: $4.5 Million In Attorney Investigative Fees And $36,653 In Post-Arbitration Confirmation Costs To Prevailing Parties Affirmed On Appeal

Broad Contractual Dispute Resolution Clauses Supported The Appellate Results.

            As we have said many times in this category, arbitration awards—unless against public policy—are hard to overturn because the merits of the award are usually not subject to rescrutiny by trial or appellate courts.  Also, the emerging trend is that post-arbitration court proceedings fees are awardable as a continuation of that process.  8minutenergy US Manager v. MDS Capital, Case No. A165588 (1^st Dist., Div. 3 June 30, 2023) (unpublished) is a recent opinion fortifying those conclusions.

            There, defendants prevailed in an arbitration involving a failed solar energy development joint venture.  There were broad contractual clauses between the parties allowing for recovery of “fees and expenses of the arbitration” and further having language suggesting that the recovery extended to fees expended in obtaining any judgment reached in connection with the arbitration award.  To the prevailing parties, the arbitrator awarded over $4.5 million in fees based on attorney investigation into management breaches, and the trial court subsequently awarded $36,653 for successful efforts to confirm the arbitration award.

            The appellate court affirmed.  The contractual arbitration clause was broad enough to encompass the substantial attorney investigation costs.  With respect to the post-arbitration confirmation fees, they are generally part of the arbitration continuation process (Code Civ. Proc., § 1293.2; Marcus & Millichap Real Estate Investment Brokerage Co. v. Woodman Investment Group, 129 Cal.App.4^th 508, 513 (2005)), bolstered by the fact that the contractual alternative dispute resolution clause did have broad language including judgment efforts were within the scope of arbitration work.