Facts of the Case
Both parties to the case had entered into an agreement regarding distribution in early 2020, both abiding by the law & order of the United States of America.
The first instance of the dispute was observed when the Petitioner Company, i.e., VPX Sports, terminated the contract without any solid grounds for the same, holding Pepsico accountable for not their best in distributing the products, as agreed upon in the contract.
The same was countered by Pepsi through the invocation of arbitration procedures to mitigate the situation in an emergent sense, taking this plea before the American Arbitration Association (AAA), the grounds for which were claimed to be unreasonable expectations from VPX Sports, which went beyond the requirements of the contract. Further, Pepsico also noted that the petitioner failed to give a three years’ notice before they terminated the contract, which went against the agreed-upon clauses in their original contract.
Through the invocation of the arbitration procedures, the respondents also requested an emergency arbitrator to alleviate and provide emergent relief, to which the arbitration panel ruled in favour.
While the emergency award of the arbitration panel was made in favour of Pepsico, the winning company followed the procedure of American law and sought final approval from a District Court on said order, which was a mandated requirement before any award can be enforceable by law.
VPX Sports went ahead and expressed dissent before the court regarding the interim award provided as injunctive relief, this dissent was further rejected by the Court, and the petitioner approached the court on the grounds of another argument, claiming that any appeal to an interim award during arbitration cannot confirm its finality and supported the same with the AAA’s rules on Optional Appellate Arbitration.
Final Decision of the Court
The Court in finality approved of the respondent’s application for confirmation of the interim relief award passed by the arbitrational panel, rejecting all the claims brought forth by VPX Sports, striking down each of them by justifying in totality the fact that an emergency arbitrator’s interim injunctive award, especially in this case, cannot be waived especially when the agreement between two parties makes a specific clause rejecting the invocation of an emergency arbitration panel for the same.
Further, the Court justified the rejection of the petitioner’s pleas because the Optional Appellate Arbitration Rules were not applicable in the present case. After all, the agreement made no mentions for the use of the same.
Hence, the interim emergency relief order was passed and confirmed by the District Court, and the decision was passed in favour of Pepsico.
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