Who’s in Charge of This Arbitration Anyway?

Barbara A. Reeves Neal is a JAMS panelist based in Santa Monica.  She has particular experience in arbitration and mediation of construction disputes in the energy sector.  Barbara is a member of JAMS Global Engineering & Construction Panel.  She can be reached at breevesneal@jamsadr.com.

Who’s in Charge of This Arbitration Anyway? Barbara A. Reeves Neal, Esq. JAMS Mediator/Arbitrator

There comes a time in many arbitrations when a tension develops between the parties and the arbitrator.  While it is common of course for tensions to exist between the parties to the arbitration, most arbitrators strive to work with the parties and keep the arbitration running smoothly rather than getting crosswise with them.

When such tensions develop should the arbitrator bow before what the parties want, or may the arbitrator invoke some higher authority and impose something different? Who’s in charge of this arbitration anyway?

Consider a few examples:

• The parties want litigation-style discovery of documents, witness depositions and voluminous e-discovery; the arbitrator wants limited discovery. • The parties have repeatedly requested that the arbitration hearing be continued; the arbitrator has stated that deadlines will be strictly observed. • The parties want the arbitrator to stay the action while they seek a court ruling in a related matter; the arbitrator wants to proceed unless stayed by a court.

Who’s in charge of this arbitration anyway?

In analyzing these situations, most arbitrators and parties would agree on a few basic principles:

1. Arbitration is a delegated and defined power to make certain types of decisions in certain prescribed ways.
2. The arbitrator’s powers derive from parties’ contract; the arbitrator is not entitled to do anything unauthorized by parties.
3. The arbitrator has an obligation to the process of arbitration itself and must preserve the integrity and fairness of the process, while advancing the fair and efficient resolution of matters submitted for decision.
4. It is the duty of the arbitrator to ensure a timely resolution and that the counsel and the parties understand the time and cost implications of potential time delays or adjournment they seek.
5. The arbitrator should set meaningful limitations in order to preserve the efficiency and integrity of the arbitration process.

These principles can be found in the rules of arbitral providers, the canons of ethics for arbitrators in jurisdictions around the world and in guidelines promulgated by professional organizations. They are straightforward enough, but there are no rules or guidelines that tell arbitrators and advocates what to do when two or more of the principles come into conflict.

As with any system of restricted delegation of power, there needs to be some system of control. The courts have some control, but usually not until after an award is rendered. Meanwhile, who determines whether the arbitrator is acting within the appropriate delegation of power? What if one of the parties goes off track or both parties ask the arbitrator to do something that calls into question the integrity of the process?

The answer seems to be that at different stages of arbitration, as different issues arise, responsibility shifts between the parties and the arbitrator. The parties define the terms of the arbitration, and the arbitrator is responsible for ensuring the integrity of the process and the result. Analogous to a road trip, the parties decide where they are going, the parties and arbitrator together try to develop the best route and the arbitrator is responsible for making sure that the rules are followed en route.

The Preliminary Hearing is an excellent opportunity to organize the proceeding in a manner that will maximize efficiency and economy, and to establish the rules and procedures that the arbitrator and parties will follow. Held shortly after the arbitration is commenced, it provides an opportunity to raise and agree upon procedural rules and practical approaches to controlling the arbitration from beginning to end.

So, who’s in charge of this arbitration? The answer is it’s a team effort, with the parties responsible for the initial framework, and the arbitrator controlling the process, within that framework, in accordance with applicable arbitration rules and arbitration principles.

This article originally appeared in the fall 2013 issue (http://www.jamsadr.com/files/uploads/Documents/GEC-Newsletter/JAMS-Construction-Newsletter.pdf) of the JAMS Global Engineering and Construction Solutions Newsletter.