Arbitration process

Sometimes it is hard to deal with all the anger Amazon sellers have when problems with the account arise. You may be absolutely sure that you are right, that everything’s okay with your account and you have proof of that, but Amazon does not seem to care most of the time. Sometimes the escalation of the issue to higher resorts, including the all-powerful Jeff Bezos’ Team, makes no difference at all. If you have been selling on Amazon for a longer time you may know by now that Amazon can be unqualified and stubborn. That may be the time you started thinking of suing them. However, Amazon is quite tricky.

Maybe you didn’t notice, but when you started selling on Amazon, you entered into a contract with Amazon named Amazon Services Business Solutions Agreement (can be found here: https://sellercentral.amazon.com/gp/help/external/G1791). According to the provisions of the Agreement, conflicts must be resolved through American Arbitration Association.

In this article, our task is to make a detailed but simple description of the procedure of filing a Demand for arbitration against Amazon. First of all, to comply with the provisions of the Agreement, you should send a notice to the representatives of Amazon that you are ready to take legal action against them. It must be done by writing a letter to Amazon registered agent (CSC Services of Nevada, Inc., 112 N Curry Street, Carson City, NV 89703). The letter should be rather short but precise, covering everything you are not satisfied with and in form of a demand. Amazon lawyer will contact you through e-mail answering the claims you made. This usually takes a few weeks.

Then it is time to file a request for arbitration to American Arbitration Association. Taking into consideration that AAA has slightly different procedures for US residents and internationals this article will be divided into two parts.

Let’s start with US residents. Commercial Arbitration Rules and Mediation Procedures regulate the rules of submitting a lawsuit for US residents. When filing your Demand for arbitration, you must attach an arbitration agreement with Amazon and pay an administrative fee.

A Demand of any sort must include:

1. the name of each party;
2. the address for each party, including telephone and fax numbers and e-mail addresses;
3. if applicable, the names, addresses, telephone and fax numbers, and e-mail addresses of any known representative for each party;
4. a statement setting forth the nature of the claim including the relief sought and the amount involved.

The Demand can be sent either through the AAA website or to any AAA administrative office. At this stage, you should also send the opposing party a copy of a Demand and all the supporting documents.

Getting back to the administrative fees, the amount of the fee varies depending on the monetary amount of a claim excluding interest, attorneys’ fees, and arbitration fees and costs. The lowest fee would be $1,725 – for the monetary amount of a claim under $75,000.

There also is a convenient mechanism of paying the fees: standard fee (two-payment schedule) and a flexible fee (three-payment schedule). The detailed schedule on the fees can be seen here: https://www.adr.org/sites/default/files/Commercial%20Rules.pdf. The arbitrator’s fee depends on the number of arbitrators and the process and ranges from $750 to $3500. But, to talk not only of expenses, but Amazon will also reimburse the fees that are less than $10,000 in case your Demand succeeds in the arbitration. Also, Amazon won’t be demanding you to reimburse their attorney’s fees.

As for the hearings, they can be conducted by telephone, based on written submissions, or in person at a location the parties mutually choose. The date, time, and place for each hearing are appointed by the arbitrator. The parties must cooperate, willing to have a hearing on the earliest day possible, and show up for the hearings. The AAA will send a notice of hearing to the parties 10 days prior to the hearing.

Now we get to the international (non-USA) residents. The arbitration process for internationals is regulated by International Dispute Resolution Procedures. And there are certain differences comparing to Commercial Arbitration Rules and Mediation Procedures.

First of all, requirements for the containing of the Demand (for internationals they call it Notice of Arbitration for some reason) are more precise:

• demand that the dispute be referred to arbitration;
• the names, addresses, telephone numbers, fax numbers, and email addresses of the parties and, if known, of their representatives;
• a copy of the entire arbitration clause or agreement is invoked, and, where claims are made under more than one arbitration agreement, a copy of the arbitration agreement under which each claim is made;
• a reference to any contract out of or in relation to which the dispute arises;
• a description of the claim and the facts supporting it;
• the relief or remedy sought and any amount claimed; and

g. optionally, proposals, consistent with any prior agreement between or among the parties, as to the means of designating the arbitrators, the number of arbitrators, the place of arbitration, the language(s) of the arbitration, and any interest in mediating the dispute.

The International Centre for Dispute Resolution (ICDR) will contact you to clarify all the information mentioned above in (g). There can be also a conference held by ICDR to facilitate the party’s agreement for those matters.

The parties can make arbitrator’s appointments by themselves, or they can ask ICDR for help. If the parties have not chosen the arbitrator within 45 days, ICDR can appoint one all by themselves. The same applies to the place of arbitration as well. The language of the arbitration is also to be agreed upon by the parties. Different fees (basically just higher) apply for the internationals. The payment schedules are the same, but the sums are larger. For example, the minimum amount here would be not $1,725 but $2000. The standard and flexible fee schedules are applicable. All the administrative fees for internationals are listed here: https://www.adr.org/sites/default/files/ICDR%20Rules_0.pdf