Client's ComplaintI was just ripped-off by net-arb (an arbitration company) used by elance. I outsourced my work in India, and after 6 months of delay, the contractor didn't finish the project. I asked for elance to proceed with refunds as the contractor didn't finish the project. I eventually filled for arbitrataion. The arbitration started and without even asking from contractors, the arbitrator give a decision in favor of contractor. The arbitrator didn't release his name during the whole arbitration, didn't ask a single question from contractor, put all the burden on me and then without looking into the message board, the arbitrator gave a decision in favor of contractor. I eventually raised this matter to elance which they directed me to support@net-arb.com so that I will communicate with arbitrator, and I eventually got an email from them saying that they don't want me to communicate with them. NET-ARB is a fraud and SCAM. No matter what you do, you will see this SCAM clearly once you go through the arbitration process. Lesson Learned: Do not trust Indian people and NET-ARB.
Our Response
Case Synopsis
The project was to ghost-write an eBook. The client wanted the freelancer to sign a non-disclosure agreement (NDA) at the beginning of the job and asked the freelancer to provide one. To make a long story short, the NDA was forgotten about and did not come up again until the end of the project.
The project ended when the client, not totally happy with the freelancer's work (that 's what was meant by "contractor didn't finish the project"), decided to take what the freelancer produced and move on. That's when the NDA was talked about again, and the freelancer sent the client a standard NDA form. The client added a term to the form that the freelancer wouldn't agree to, so the NDA wasn't signed and the client filed for arbitration.
The term the client wanted to add dealt with the legal issue of "choice of law". Coice of law comes into play when the parties to a lawsuit come from different jurisdictions (in this case countires) and if the particular issue in dispute is treated differently by the two different sets of laws. In other words, if we one country's laws the case comes out one way but if we apply the other country's laws it comes out the other way, which laws should we use? As you might imagine, this kind of conflict comes up rarely.
What was learned in the hearing is that the client's intent was alotgether different. He thought the choice of law term gave him the right to sue the Indian freelancer in a Canadian court - that's why he was so adamant about adding term #7 and why he thought it worth going to arbitration.
The client asked 4 things when the hearing began:
1. Sign the amended NDA (Non-Disclosure Agreement)
2. Release the EBook and transfer the copyright
3. Reimburse the arbitration fee
4. and move on with life
The arbitrator made sure he was given a standard NDA singed by the freelancer. He could not recover his arbitration fee but he received the book with complete ownership rights.Quotes from the Complaint"The arbitration started and without even asking from contractors, the arbitrator give a decision in favor of contractor"
Both the client and the contractor provided opening statements that outlined their case. From those statements and the records on Elance it was immediately obvious that the dispute centered around the client having added a term to a contract that the contractor objected to and refused to sign. Naturally the questioning began with the client to justify the addition. You will see as you continue reading that the arbitrator quickly discovered the case had no legal basis and rendered an early decision. "The arbitrator didn't release his name during the whole arbitration"
Our arbitrators introduce themselves at the beginning of every hearing and every email from the arbitrator has the arbitrator's name in the heading. For security, all of our arbitrators use first names only. You can read more about why anonymity is necessary in our FAQs. "... didn't ask a single question from contractor, put all the burden on me and then without looking into the message board, the arbitrator gave a decision in favor of contractor"
As explained above, the issue centered around the new term insisted upon by the client. There was never a need to ask the contractor a question but the contractor did add relevant commentary along the way. The Elance message board was considered in this case as it is in every Elance case. "I eventually got an email from them saying that they don't want me to communicate with them."
After the decision we received numerous emails from the client protesting the outcome. Here he is referring to the final email he received from our Support team after numerous emails had already been exchanged.
Arbitrator's ExplanationUnder net-ARB policy, the arbitrator must provide a written explanation supporting the decision. Here is a copy of the explanation that accompanied the decision. I don't know who advised you with respect to adding term #7 to the NDA, but that does not permit you to sue in your home country. To do that you have to talk about 'personal jurisdiction' whereas your clause talks about 'choice of law'. They are totally different things. What term #7 does is tells an Indian court that if there is a conflict between Indian law and Canadian law that would result in different outcomes, they must use Canadian law in deciding the lawsuit. Choice of law clauses are very common in contracts but not for the reason you stated - 'personal jurisdiction' determines 'where' you get to sue a defendant and term #7 does nothing to change that, not that the client always gets to choose though. So even if I upheld the NDA with that clause, you still have to bring the lawsuit in India. |
