Monster Energy recently attempted to stop the global distribution of Coca-Cola’s new energy drink. Shortly after the product launched in Europe, Monster Beverage Corporation filed a suit against Coca-Cola.
Both companies agreed to submit their dispute to arbitration before the American Arbitration Association in October 2018, in an attempt to keep their shared partnership.
The two companies entered a partnership in 2014, that required Coca-Cola to transfer its energy products to Monster and Monster to give its non-energy products to Coca-Cola. Because of this partnership, the two companies attempted to settle their dispute in the quickest and least disruptive way.
On June 28, the arbitrators ruled that the Coca-Cola Energy products were an exception to the agreement Monster and Coke had regarding energy beverages.
Coca-Cola is allowed to launch its products globally and relaunch its current distribution. Both parties accepted the arbitrators’ ruling and are expected to keep their partnership.
Arbitration versus litigation
Because the two companies already had a working relationship, they decided to seek arbitration instead of litigation.
Arbitration involves two disputing parties that agree to work with a neutral third-party to settle a dispute. Litigation, on the other hand, would require both parties to go to court in order to resolve their dispute.
Based on the arbitrations’ ruling, Monster may have fared better had the companies engaged in litigation. If litigation had occurred, Monster’s attorneys would have been able to gather more evidence and better represent Monster’s case, possibly changing the outcome of the ruling. In arbitration, attorney roles are very limited.
If you are facing a dispute, speak with a litigation attorney to see which option is best for you.