Joseph Gallagher, Megan Gao Author New York Law Journal Article on Minimizing the Impact of Defaults in Commercial Arbitration

March 24, 2026

Harris St. Laurent LLP partner Joseph Gallager and associate Megan L. Gao authored an article for the New York Law Journal analyzing why payment defaults can disrupt commercial arbitration and how parties can mitigate the impact.

In “Minimizing the Impact of Defaults in Commercial Arbitration,” the authors explain that, unlike litigation, arbitration requires parties to share costs—typically on a 50/50 basis. When one party refuses to pay, proceedings can stall, increasing costs and delaying resolution.

The article outlines how arbitration rules address defaults, noting that arbitrators generally may not issue awards based solely on a party’s nonparticipation. It also examines options available to non-defaulting parties, including advancing fees, pursuing claims in court or seeking to compel payment—each with potential drawbacks.

Gallagher and Gao emphasize that these approaches are largely reactive and suggest that parties instead address payment defaults at the drafting stage. Because arbitration is governed by contract, carefully structured clauses can establish consequences for nonpayment while preserving arbitration’s key benefits.

Read the full article on mitigating risk from non-paying parties in arbitration here.

Gallagher litigates complex commercial, employment, and partnership disputes, and advises clients on regulatory and enforcement investigations. His clients include high-level financial services executives and other professionals, companies, partnerships and startups.

Gao advises public and private companies and individuals in high-stakes complex commercial disputes and investigations, with a focus on employment litigation, counseling and investigations.