Imagine this: You have worked with your attorney on crafting the perfect arbitration agreement. You have an issue that goes to arbitration and are in the middle of arbitrating when you get notified that the arbitration is being cancelled for non-payment and you are headed back to court. What!?!?
It’s true. If you’re in arbitration (an alternative to going to court), you have to pay certain fees to keep the process going. California law says those fees must be paid within 30 days of when they’re due—unless your arbitration agreement says otherwise.
If you don’t pay on time, arbitration can get shut down, and you could get dragged back into regular court even if you had a valid arbitration agreement. This statute was recently upheld by the California Supreme Court in Hohenshelt v. Superior Court (No. S284498, Aug. 11, 2025).
What this means for you:
- Don’t ignore invoices. Pay them right away, or make sure your team has a reliable system for tracking and paying.
- Build in flexibility. When you draft arbitration agreements, you can write in a little extra time for payments.
- If you miss a payment, act fast. Courts might give you a break if the missed payment wasn’t intentional and it didn’t hurt the other side, but you don’t want to count on that.
