Jul 14, 2017

Resolving Artist-Record Label Disputes: Why Arbitration Is Quite Desirable | Adejorin D. Abiona

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.

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]

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 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.

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:

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.

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.

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.


2 Sander H. Gibson C.ARB, MCI ARB (2015): Advantages and Disadvantages of Commercial Arbitration: Arbitration In The Canadian Film & Tv Industryretrieved 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 Industryretrieved 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

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