Page 17 - October 23

What happens if there is a dispute?
Unlike used vehicle transactions in which the buyer and seller are usually close to each other, many aircraft buy-sells are hundreds (or thousands) of miles apart. If one party has a dispute, where shall it be heard? The general rule is that a lawsuit must be filed in the defendant’s home court, which might be cost-prohibitive for the other party. To streamline things and provide a level playing field, an arbitration clause with this basic language is helpful:
“All disputes concerning this Agreement and the sale of the aircraft shall be decided by arbitration, in accordance with the commercial arbitration rules of any alternative dispute resolution service agreed upon by the parties. All parties shall initially advance an equal share of the costs of arbitration (excluding each party’s own attorneys’ fees), with the arbitrator awarding all costs (including attorney fees) to the prevailing party. The decision of the arbitrator shall be rendered within thirty (30) days after the submission of all evidence from all parties to the arbitrator for decision and shall be binding upon the parties. If necessary, a judgment upon the decision rendered by the arbitrator may be entered in any court chosen by the prevailing party.
All mediations or arbitrations shall take place via videoconference without any physical appearance by the parties. Nothing in this section shall prohibit any party from seeking injunctive relief from any court to preserve the status quo pending arbitration.”
While arbitrations are not free, the ability to appear via video or telephonically takes away the distance barrier if the initiating party is far away. Also, without an express provision for attorney fees to the prevailing party, each side must pay their own legal fees win or lose. This causes many legitimate claims to become worthless when the cost of bringing an action exceeds the potential recovery.
Brokers: No two are the same
There are a handful of reputable brokers who specialize in King Air aircraft and using them provides a higher level of professionalism to the entire transaction. However, there are still many lesser-known brokers who insist that everyone uses that broker’s own forms, which often contain very dangerous language:
“In the event of any dispute, both the buyer and seller shall indemnify the broker from any claims made by any other party.”
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OCTOBER 2023
KING AIR MAGAZINE • 15