It's one of the lesser-known facts about world-renowned rap artist Jay-Z, but he's big in the arbitration scene. For law nerds and music lovers like us, the combo has got us Crazy In Love. Here's the lowdown on two recent cases.
In 2018, Jay-Z was caught up in a US$200M trade mark dispute with clothing company Iconix. Iconix commenced arbitration proceedings with the American Arbitration Association (AAA). Under the AAA rules for arbitrator appointment, the AAA selects a list of 10 arbitrators from it's national roster and sends the list to the parties to attempt to agree on a single arbitrator. After reviewing the AAA's list, Jay-Z noticed that there was only one African-American arbitrator candidate. Jay-Z decided to apply to the New York courts to stay the arbitration proceedings on the basis of public policy and the risk of unconscious bias.
Unfortunately for Jay-Z the Court said that arbitration is a private right, in contrast to the public right to access to justice through the courts, and that the parties chose to draft the AAA referral clause into their contract. In other words, Jay-Z should have consulted with the AAA and decided whether he was happy with the diversity of it's arbitrators before agreeing to the clause. The Court did grant a temporary stay, but ultimately the AAA was able to offer five African-American candidates and Jay-Z agreed for the arbitration to continue. Sadly for fans like us, the outcome of AAA arbitrations typically remain private so it's unlikely we'll get to weigh in on the final outcome.
In 2019, Jay-Z is back knocking the hustle in the arbitration scene. This time the dispute concerns his online music service Tidal (co-owned by other artists including Beyoncé, Kanye West, Rihanna and Madonna). Norway's economic crime body is pursuing a fraud investigation, claiming that Tidal manipulated streaming figures in Norway to get higher royalty payouts for certain artists. Tidal applied to the Supreme Court of Norway earlier this year to prevent its offices being searched but was unsuccessful. Tidal Poland has since notified the Norwegian government that it intends to commence international arbitration proceedings against it, saying the government has expropriated its property and treated it unfavourably as a Polish investment company. Why Tidal Poland, you ask? Poland and Norway are parties to a 1990 bilateral investment treaty. The purpose of the treaty is to encourage foreign investment between Poland and Norway, by making certain commitments to protect investor companies and to allow for the resolution of any disputes through uniform international arbitration rules. Australia is party to a similar treaty with Poland, as well as a number of other countries including the Czech Republic, Romania, Vietnam and Chile. If the arbitration proceeds, this would be the first ever investment treaty claim against Norway. Excited? We sure are.
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