The California Court of Appeal recently held that an arbitrator cannot cure a party’s failure to pay arbitration fees. Cvejic v. Skyview Cap., LLC, No. B318880, 2023 WL 4230980 (Cal. Ct. App. June 28, 2023). As a result, when the party that pressed for arbitration does not pay its fees on time, the opposing party is entitled to unilaterally withdraw from the arbitration.
In an action brought by a former employee, employer Skyview Capital successfully compelled arbitration. However, when Skyview failed to pay its arbitration fees by the deadline, the former employee moved to withdraw from arbitration. The Court of Appeal held that Skyview’s failure to pay the fees timely constituted a material breach of its arbitration agreement with the former employee, entitling him to withdraw from arbitration pursuant to California Code of Civil Procedure section 1281.98. The Court of Appeal further held that nothing in section 1281.98 empowers an arbitrator to cure a party’s missed payment. This decision shows the importance of strict compliance with all arbitration payment deadlines.
