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The entertainment
industry encompasses diverse relationships. With the adoption of ever-changing
developing technology, novel problems are emerging which require creative
solutions. For example, the abundance of contractual relationships creates the
likelihood of disputes. This article will look into the contracts between
record labels and artists with a focus on the peculiarities in the relationship
with creatives that has made arbitration desirable for dispute resolution.

In the
entertainment industry, timeliness of decisions and transactions, limited
resources for protracted litigation, and the need to secure relationships are
key considerations. Disputing parties are increasingly intolerant of the cost,
delays and risks of litigation, paucity of jurisprudence and industry expertise
of judges, possibility of appeal, loss of privacy and confidentiality, and the
emotional toll which characterize litigation as a method of resolving disputes[1]. Thus, Arbitration is gradually
gaining ground as a better option for parties to employ in resolving their
disputes.
WHAT IS ARBITRATION?
Arbitration is an
Alternative Dispute Resolution mechanism where parties appoint independent
arbitrator(s) to resolve their disputes by granting an award which is legally
binding on the parties and final. The parties may in their contract commit to
arbitration in the event of a future dispute by inserting an arbitration clause
in the contract.
A typical example
of an arbitration clause is modeled in this manner:
In the event of any dispute or difference arising between the parties
to this agreement from or in connection with this agreement or its performance,
construction or interpretation, such dispute shall be referred to arbitration
by a single arbitrator in accordance with the provisions of the Arbitration and
Conciliation Act CAP 18 Laws of the Federation of Nigeria 2004 or any
amendments thereto, whose decision in relation to any such dispute or
difference shall be final and binding on all parties hereto.”
[2]
DISPUTES ARISING
FROM ARTIST-RECORD LABEL CONTRACTS
There are many
sources of disputes in artist-label relationships. Many disputes arise out of
artist complaints focusing on several concerns, including inequitable recording
contracts, poor royalty schemes, injurious accounting policies and
content-ownership issues.[3]
Some other
disputes arise from the breach of the contract by an act or omission of any of
the parties. Also, there might be some form of ambiguity in the terms of the
contract which might give rise to dispute between the parties and thus, such
terms should be properly interpreted.
Another area of
the artist-label relationship in which disputes arise frequently is
infringement and ownership issues after the determination of the artist -record
label contract.
THE NEED TO INSERT AN ARBITRATION
CLAUSE IN AN ARTIST-RECORD LABEL CONTRACT
The artist-record
label contractual relationship in entertainment industry is a very peculiar one
with characteristics which has made arbitration very desirable as a method of
resolving disputes arising from this relationship. The need to always insert an
arbitration clause in the artist-record label contract cannot be
over-emphasized as disputes must always be envisaged while drafting a contract
and the means to resolve such when it arises must be properly provided for.
WHY IS ARBITRATION DESIRABLE?
Due to the nature
of the Artist–Record label contracts, arbitration is well suited as the method
for resolving disputes arising thereof for the following reasons:
Expense/cost
The financial
implication of every action is always very important in business. The
Record labels and the artists are in the music industry for business and as
such, should naturally go for a less expensive but effective option of
resolving disputes when they arise. It is also common for an artist or even a
record label to lack the financial strength needed to carry through with a lengthy
lawsuit.
Arbitration costs
generally are significantly low and predictable if compared with that of
litigation. Trial-related matters which consume time and money such as
extensive evidentiary issues, proposed findings of fact, endless authentication
of documents, qualification of experts, cumulative witnesses are more limited
in arbitration than in litigation. Hence, Attorneys’ fees and other expenses
are minimized in arbitration.
Technical
expertise
Entertainment
matters often involve complex legal issues and technical industry concepts,
which may be difficult for a Judge to understand. Arbitration provides the
parties with the option to select ADR professionals with substantial experience
in entertainment and intellectual property matters.
By selecting
neutrals with unique practice area-specific experience, the parties can save
time by not having to educate Judges and jurors with little to no knowledge of
the industry and the law[4].
Confidentiality
and Public Perception
Publicity of
ongoing disputes between labels and artists may contribute negatively to the
public’s perception of the music industry. The consumers may have less respect
for record companies or the artists.
Confidentiality
is usually maintained during arbitration proceedings and the award is always
being delivered only to the parties, counsel and any applicable organization.
Arbitration guarantees the privacy of the disputes which in turn prevents any
form of negative publicity that may be generated if such were publicized.
Preserving
the Relationship
Since so many of
the disputes between artist and their record labels arise during the actual
contractual relationship, it is important to have an effective means of
resolving those disputes, while still maintaining a good relationship[5].
Properly
conducted arbitration provides a means to work out any issue while still
permitting the parties to preserve, build or re-establish good working and
personal relationship.
Time
In the music
industry, there are always deadlines and public expectations to meet. Hence,
time is always of essence and also very critical. Whenever a dispute arises
from the contractual relationship between an artist and a record label, a less
time consuming method of resolution should be employed as time is always very
crucial.
Arbitration
offers a quick process of resolving disputes. Several reasons explain the
saving of time associated with arbitration: it is always governed by few and
less stringent rules of evidence; the parties have greater control over the
speed and length of the proceedings; it is less susceptible to multiple
proceedings; and an arbitral award is generally not subject to subsequent
judicial review. In a nutshell, Arbitration provides a fast method of obtaining
a final and binding resolution of a dispute.
CONCLUSION
It is worthy of
note that arbitration’s objective is to provide a fair, faster, lower-cost,
party-structured method for the full and final disposition of disputes by a commercially
experienced neutral person, in a private and more relaxed atmosphere, with
confidentiality of the process and the award, which may preserve or enhance the
parties’ relationship despite the dispute[6].
Hence,
Arbitration preserves the artist-label good working relationship, improves the
music business and subsequently, the quality of music produced. This is
beneficial for record labels, artists as well as the consuming public and as
such, arbitration is well-suited to resolve artist-label disputes and
therefore, quite desirable.
REFERENCES
2 Sander H.
Gibson C.ARB, MCI ARB (2015): Advantages and Disadvantages of
Commercial Arbitration: Arbitration In The Canadian Film & Tv Industry
retrieved
from http//www.sanderhgibson.com/englishsite/arbitrator assessed on 29th June,
2017.
3 Bello Adesina
Temitayo (2014): Why Arbitration Triumphs Litigation: Pros Of Arbitration;
Singaporean Journal Of Business Economics, And Management Studies Vol.3, No.2,
2014
[3] Kaleena Scamman (2008):
ADR In The Music Industry: Tailoring Dispute Resolution To The Different Stages
Of The Artist-Label Relationship; Cardozo Journal of Conflict Resolution, 10
(fall) 269-304 retrieved from http://cardozojcr.com/vol10no1 assessed on 29th June,
2017
[4] Jeffrey Grubman (2013):
Taking advantage of ADR in the entertainment industry: IP cases in the
entertainment industry are great candidates for mediation and arbitration;
INSIDECOUNSEL.COM: Business Insights For Law Department Leaders (April 16,
2013)
[5] Kaleena Scamman (2008):
ADR In The Music Industry: Tailoring Dispute Resolution To The Different Stages
Of The Artist-Label Relationship; Cardozo Journal of Conflict Resolution, 10
(fall) 269-304 retrieved from http://cardozojcr.com/vol10no1 assessed on 29th June,
2017
[6] Sander H. Gibson C.ARB,
MCI ARB (2015): Advantages and Disadvantages of Commercial Arbitration:
Arbitration In The Canadian Film & Tv Industry
retrieved from http//www.sanderhgibson.com/englishsite/arbitrator assessed
on 29th June, 2017

Adejorin D. Abiona

Associate Attorney |
Writer | Public Speaker 



Ed’s Note – This article was first published here


Photo Credit – www.musiclawupdates.com