The Use of ADR in the Music Industry
By Roxana Jitariu
In my last blog post, I have discussed the relationship between ADR and the videogame industry. This time, the topic I would like to present is how ADR is applied in the music industry.
In the music industry, parties agree which ADR method to resort to, whether it may be mediation or arbitration.[1] In some situations, contracts include a binding ADR clause, which can either be standard or inserted by the parties, even after a lawsuit has been filed.[2] An example of an ADR clause can be formulating in the following manner: “All disputes arising under this agreement shall be resolved by binding arbitration before [number of arbitrators] in [name of the seat] The Award of the arbitrator shall be final and can be enforced in any court in [name of the state]. The prevailing party shall be entitled to recover his or her reasonable attorney’s fees”.[3] An interest fact to note is that individual arbitrators and mediators can be chosen by the binding contractual clause, meaning that retired judges can find an opportunity to work as arbitrators or mediators for private music companies.[4]
ADR is most commonly used to manage the artists-label relationship. All kind of dispute can be covered, from creative control to managing style.[5] The parties can choose to implement the following options:
1. Prevention and cooperation, e.g. creating an ADR clause
2. Negotiation
3. Standing neutral, i.e. parties use the help of a neutral agent to solve the dispute
4. Non-binding solution: e.g. mediation, arbitration etc.
5. Private-binding solutions
6. Litigation.[6]
Each one of these options are considered based on five criteria: cost, duration, impact on the relationship, effectiveness, publicity of the conflict.[7]
An interesting case law to present is the Graham v Scissor-Tail Inc. US opinion of the Supreme Court of California.[8] The case is between the American promoter Bill Graham and the Scissor-Tail, the company owned by the defendant C. Russell Bridges, who is an artist and performer.[9] When the plaintiff and defendant had first started to collaborate, they signed four contracts.[10] One of these contracts contained a clause which stated that all disputes had to be submitted, heard, arbitrated an determined.[11] The determination was to be conclusive, final and binding to the parties.[12] When the case was first brought to arbitration, the full award claimed by Scissor-Tail was issued against Graham.[13] The case was then brought to a superior court, which confirmed the arbitral award.[14] However, the Supreme Court of California addressed two issues: 1) whether the parties signed a contract of adhesion and 2) whether the arbitral award was enforceable.[15] The conclusion was that considered the contract was of adhesion but not enforceable, therefore the award was unenforceable and the court reversed the judgement.[16]
This case teaches us that it is not easy to handle difficulties that come in the entertainment industry. In fact, an interesting quote by Dr. Kalyan Chakravarthy Kankanala, Indian IP lawyer, who stated “Entertainment law is not as entertaining as entertainment”. [17] My personal interpretation of the quote is that entertainment, and art in general, is much more enjoyable when disputes are solved as peacefully and quickly as possible. Therefore, this is the reason why it is important for the parties to clarify all the ADR clauses and other legal aspects of the collaboration before signing the contract.
[1] Glenn Litwak, “Music Industry Advice: Alternative Dispute Resolution” Music Connection (2016) < https://www.musicconnection.com/music-industry-advice-alternative-dispute-resolution/ > accessed on 5 June 2021
[2] Ibid
[3] Ibid
[4] Ibid
[5] Eymard, V.R. Litigations between artists and recording companies: a trial of strength (PM World Journal, Vol. VIII, Issue I, 2009) 4
[6] Eymard, V.R. Litigations between artists and recording companies: a trial of strength (PM World Journal, Vol. VIII, Issue I, 2009) 5
[7] Eymard, V.R. Litigations between artists and recording companies: a trial of strength (PM World Journal, Vol. VIII, Issue I, 2009) 5-6
[8] Graham v Scissor-Tail, Inc., 1981 28 Cal.3d 807 (Cal.1981), 171 Cal. Rptr. 604, 623 P.2d 165
[9] Graham v Scissor-Tail, Inc., 1981 28 Cal.3d 807 (Cal.1981), 171 Cal. Rptr. 604, 623 P.2d 165, para 812 (I)
[10] Ibid
[11] Graham v Scissor-Tail, Inc., 1981 28 Cal.3d 807 (Cal.1981), 171 Cal. Rptr. 604, 623 P.2d 165, para 813 (2)
[12] Graham v Scissor-Tail, Inc., 1981 28 Cal.3d 807 (Cal.1981), 171 Cal. Rptr. 604, 623 P.2d 165, para 813
[13] Graham v Scissor-Tail, Inc., 1981 28 Cal.3d 807 (Cal.1981), 171 Cal. Rptr. 604, 623 P.2d 165, para 815
[14] Graham v Scissor-Tail, Inc., 1981 28 Cal.3d 807 (Cal.1981), 171 Cal. Rptr. 604, 623 P.2d 165, para 816
[15] Graham v Scissor-Tail, Inc., 1981 28 Cal.3d 807 (Cal.1981), 171 Cal. Rptr. 604, 623 P.2d 165, para 817
[16] Graham v Scissor-Tail, Inc., 1981 28 Cal.3d 807 (Cal.1981), 171 Cal. Rptr. 604, 623 P.2d 165, para 831
[17] Fort hose interested to read more about Dr. Kankanala and his expertise, here you can find more information:
BananaIP Counsels, “Dr. Kalyan C. Kankanala: Managing Partner” (2020) < https://www.bananaip.com/dr-kalyan-c-kankanala/ > accessed on 7 June 2021