Arbitration procedure question

[tamarian]

In the UW's Legal center article 7.1.2.b  states the following:

"Rejection of Arbitration or non-participation by one party: If one party elects to take the matter to Arbitration and has submitted the Arbitration Payment (“Participating Party”), and the other party rejects Arbitration, fails to submit the Arbitration Payment or does not respond within 5 calendar days of the Notice of Arbitration Demand (“Non-Participating Party”), Freelancer and Client agree that Upwork Escrow is authorized and irrevocably instructed to immediately release the funds in Escrow, if any, to the Participating Party. This will close the Escrow Dispute ticket. To the extent the parties wish to take legal action to enforce their contractual rights, Upwork may provide contact information on file for Client or Freelancer, consistent with Upwork’s Privacy Policy."

My question is: in this case, what happens with the payment done by the participating party? Does it get refunded (since the arbitration will not take place)?

Thank you!

[NikolaS · Accepted solution]

Hi Marian,

Thank you for reaching out to us. Yes, if one party pays the arbitration fee and the other does not, the case cannot proceed to arbitration and so the arbitration fee paid is refunded. However, If the case does go to arbitration, that fee is non-refundable even for the winning party.

[idumlupinar]

Arbitration is a serious matter. It would be best if you thought twice. However, there are some clients that use this as a way of escaping from fixed-price contracts.