KRS 244.609: Resolution of disputes between microbrewer and distributor --

Arbitration.

In the event the microbrewer and distributor cannot agree on the fair market value as set

forth in KRS 244.608(4)(g), then the parties shall arbitrate in accordance wi th the

following:

(1) If the parties fail to reach an agreement not later than thirty (30) days after the

distributor receives the microbrewer's written notice to terminate, the distributor or

microbrewer may send a written notice to the other party and th e American

Arbitration Association, or its successor in interest, declaring the party's intention to

proceed with final and binding arbitration administered by the American Arbitration

Association under the American Arbitration Association's Commercial Arb itration

Rules. Thereafter, an arbitration shall be held for the purpose of determining the fair

market value of the distributor's total investment in the microbrewer's products

being terminated. For the purpose of this subsection, fair market value shall be the

value that would be determined in an arm's length transaction entered into without

duress or threat of termination of the existing distributor's right and shall include all

elements of value, including goodwill and going-concern value.

(2) Notice of intent to arbitrate shall be sent, as provided in subsection (1) of this

section, not later than thirty -five (35) days after the distributor receives written

notice to terminate. The arbitration proceeding shall conclude not later than forty -

five (45) days after the date the notice of intent to arbitrate is mailed to a party.

(3) Any arbitration held pursuant to this section shall be conducted in the city within

Kentucky that:

1. Is closest to the distributor; and

2. Has a population of more than twenty thousand (20,000).

(4) Any arbitration held pursuant to this section shall be conducted before one (1)

impartial arbitrator to be selected by the American Arbitration Association. The

arbitration shall be conducted in accordance with the rules and procedures of the

American Arbitration Association.

(5) An arbitrator's award in any arbitration held pursuant to this section shall be

monetary only and shall not enjoin or compel conduct. Any arbitration held

pursuant to this section shall be instead of all other remedies and procedures.

(6) The cost of the arbitrator and any other direct costs of any arbitration held pursuant

to this section shall be equally divided by the parties engaged in the arbitration. All

other costs shall be paid by the party incurring them.

(7) The arbitrator in any arbitration held pursuant to this section shall render a decision

not later than thirty (30) days after the conclusion of the arbitration, unless this time

period is extended by mutual agreement of the parties or by the arbitra tor. The

decision of the arbitration is final and binding on the parties. Under no

circumstances may the parties appeal the decision of the arbitrator.

(8) A party who fails to participate in the arbitration hearings in any arbitration held

pursuant to this section waives all rights the party would have had in the arbitration

and is considered to have consented to the determination of the arbitrator.

(9) Nothing in this section shall be construed to limit or prohibit good -faith settlements

voluntarily entered into by the parties.