How We Won One of Our Largest Arbitration Awards to Date Based on Contract Arbitration Awards Per 2014 Texas VerdictSearch

The email last week from the American Arbitration Association is one for the record books. At Hendershot Cowart P.C., we were excited to share it with our client, who was just as pleased as we were - more so - to hear the good news.

The email started out innocently enough - "By direction of the Arbitrators we herewith transmit to you the duly executed Award..." - but when we opened the attached file, we found that we'd won an award that was larger than the second highest contract arbitration award in Texas in 2014, according to VerdictSearch.

At its heart, this case was about corporate espionage and conspiracy to defraud, and we did all we could to prove it.

What It Means to Breach a Contract

In general, two parties create a binding contract when (1) there's an offer; (2) acceptance of that offer; and (3) something of value given by both parties to the transaction. Out of all of this comes a duty to "hold up your end of the bargain," as it goes, and if one or both of the parties fail to do so, there may be what we call a breach of contract claim.

That is the essence of what happened in 2013, when two companies came together to execute a Master Distribution Agreement, an agreement that would facilitate the sale of certain medical equipment in the U.S. Our client, a Korea-based manufacturer, would provide medical equipment to what would become the opposing party, whose goal was supposed to be to sell them.

But that wasn't its real goal.

Not only did we prove to the arbitrators that the opposing party breached the contract, but that it had intended to breach the contract from day one through fraud, fraudulent inducement, and conversion. We proved that if the opposing party could get its hands on as much of our client's technology as possible, it would then misappropriate the technology for itself, and slap its own name on it.

What We Did To Prove Breach

We led our client through a hearing that lasted six days. We offered hundreds of exhibits as evidence. We elicited the testimony of multiple witnesses. And at the end of it, the three-arbitrator panel gave us its decision: an award of $2,218,765 for our client, a declaratory judgment as to the agreement itself (entirely in our client's favor), and a denial of every single one of the opposing party's claims.

To paraphrase, the arbitrators wrote that they were "particularly disturbed" by evidence we brought to light showing that the opposing party's executives had intended to take advantage of our client's trust from the very beginning, in order to gain access to proprietary information, with the goal of using our client's technology for themselves.

As it turned out, breaching the contract wasn't a great business strategy for our opposing party.

Learn More about Resolving Business Disputes: Call (713) 909-7323

If you're facing a business dispute, the lawyers of Hendershot Cowart P.C., can help you. From litigating breach of contract claims like this one to shareholder oppression or patent infringement defense claims, the common denominator toward the possibility of a favorable outcome is unwavering commitment: Your lawyer should be 100% committed to his or her client, as we are, no matter how tough or complex the case is.

In the end, you might end up with one of the largest arbitration awards of the year.


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