Arbitration in Divorce: Key Insights from Alikhan v. Alikhan Case Study

Introduction to Alikhan v. Alikhan

The case of Alikhan v. Alikhan, decided by the Texas Appellate Court in Austin on July 22, 2021, serves as a pivotal learning opportunity for those engaged in or considering arbitration. This case highlights the critical aspects of timing and the strategic necessity to thoroughly review and negotiate arbitration agreements.

Arbitration in Divorce Case

During divorce proceedings, the parties involved agreed to engage in binding arbitration as stipulated by their temporary orders. These orders outlined that the parties were bound by both the arbitration agreement and the rules, which were to be provided by the arbitrator. Notably, the arbitration agreement specified that there would be no court reporter present. The arbitrator would initially act as a mediator, and if mediation failed, the arbitrator could use information from the mediation in making the final arbitration decision.

The couple reached a partial Marital Settlement Agreement (MSA), and the unresolved issues were subsequently decided through arbitration. Following this, one of the parties, referred to as H, changed legal counsel and attempted to challenge the arbitration award.

Legal Challenges and Court Decisions

H's new attorney filed a motion to vacate the arbitration award, alleging that the award was obtained through undue means since H was compelled to sign the arbitration agreement and rules without proper opportunity to review them. This, they argued, deprived H of his right to have the proceedings recorded. However, H did not schedule a hearing for this motion, and the trial court proceeded to issue a final decree.

Upon appeal, the Court of Appeals found several procedural faults with H’s approach. The primary issue was his objections under CPRC 171.088.

(a) were not timely filed—they needed to be submitted within 90 days of when the arbitration agreement and rules were signed.

Additionally, H failed to bring his motion to vacate to the trial court's attention. Which meant the court never had the opportunity to rule on it.

Key Lessons and Recommendations

The appellate court emphasized that arbitration statutes guarantee rights such as being heard, presenting evidence, and cross-examination. They do not inherently grant a right to a recorded transcript. If a party desires a record, this must be explicitly included in any written arbitration agreement.

Conclusion: Strategic Considerations in Arbitration

This case underscores the importance of careful review and negotiation of arbitration agreements and rules. Legal practitioners and parties to arbitration should ensure that terms expanding the client’s rights, including those related to appellate review, are stipulated.

Under existing statutes, arbitration awards are generally not reviewed for errors of law or fact. However, parties can negotiate terms in their arbitration agreements allowing for reviews concerning the legal and factual sufficiency of evidence and legal errors. The lesson from Alikhan v. Alikhan is clear: do not hastily sign any arbitration agreement or rules without thorough consideration and negotiation.