A recent decision of the Supreme Court of Nevada addresses the question whether a party’s ignoring a provision in a commercial contract requiring mediation prior to commencing litigation may be grounds for dismissal of the action. In MB America, Inc. v. Alaska Pacific Leasing Company, the court said it was, confirming the award of summary judgment in favor of the defendant.
Alaska Pacific agreed to be a dealer to sell certain rock-crushing machines manufactured by MBA. The contract provided:
Any disputes or questions arising hereunder… shall be submitted to mediation… with the rules of the American Arbitration Association…. If mediation between the parties does not result in a mutual satisfying settlement withing 180 days after submission to mediation, then each party will have the right to enforce the obligations of this Agreement in the court of law of Reno, Nevada with all reasonable attorney fees, court costs and expenses incurred by the prevailing party in such litigation to be paid by the other party.
