Arbitration Essentials: How to Initiate and Navigate an International Arbitration, Part 2: Hearings

Rules and Procedures: Hearings

JAMS provides a comprehensive spectrum of conflict prevention and dispute resolution services to meet the unique needs of today’s global business environment. Those services include arbitration, which offers a private, efficient and binding way to resolve disputes outside of court. This FAQ series is designed to guide you through the key steps of initiating and conducting arbitration to enforcing an award under our rules and procedures. Part 1 of this series addressed the early stages of arbitration. Part 2 addresses arbitration hearings.

This installment features insights from Shelby R. Grubbs, Esq., J.D., FCIArb. Mr. Grubbs joined JAMS in 2020 after nearly 45 years as a litigator. Having worked across a broad spectrum of complex commercial litigation, he draws on extensive experience to resolve—efficiently and expeditiously—even the most challenging cases. He serves as an arbitrator, mediator and court-appointed neutral/special master, handling matters that span a wide range of practice areas.

Under the JAMS International Arbitration Rules, are tribunals limited in how they conduct hearings?

With two limitations, a JAMS international tribunal has discretion to conduct a merits hearing however it thinks best. The first of these limitations guarantees a hearing if requested by a party. Thus, upon request, the tribunal must convene a hearing “for the presentation of witnesses, including expert witnesses.” The second limitation on the tribunal’s discretion requires that hearings be conducted in private unless the parties agree to (or relevant law requires) a public hearing.

Subject to those exceptions, the tribunal’s broad discretion expressly includes:

• Electing either to conduct an evidentiary hearing or proceed on the written record
• Deciding whether to hold the hearing virtually or in person
• Deciding how and when evidence is to be presented
• Deciding whether to admit evidence and, if admitted, what weight to give it

How do the Rules address dispositive motions?

It is often said that the use of dispositive motions in alternative dispute resolution proceedings is controversial because there is a widely held belief that the typical lengthy delays occasioned by dispositive motions in court proceedings are antithetical to the spirit of cost-effective and speedy arbitration. So, while the Rules do provide a mechanism for resolution through dispositive motions, such motions are permitted only in narrow circumstances.

After consulting with the parties, the tribunal may, in its discretion, make a sua sponte determination that any claim or defense advanced by any party is outside of the tribunal’s jurisdiction or “manifestly without merit.” This enables the streamlining of and enhancements to the overall efficiency of the proceeding if it is obvious to the tribunal, but not one of the parties, that a claim or defense ultimately will not succeed. That is so because the tribunal’s early, sua sponte determination can prevent the wasteful litigation of that manifestly unmeritorious claim or defense that otherwise would have resulted from a party’s failure to move for dismissal. For example, a tribunal might exercise this power in cases involving claims against a nonsignatory to an arbitration agreement when none of the legal bases for compelling a third party to arbitrate apply.

What determines the laws a tribunal must follow?

Under ordinary circumstances, the tribunal is obligated to follow the law the parties have chosen to apply to their agreement or, in the absence of such choice of law, the national law or any other principles of law the tribunal determines should be applied. However, the parties can agree to confer additional powers on the tribunal that permit it to decide a dispute according to the tribunal’s own notions or principles of equity, fairness and justice as they may apply to any question that arises for determination during the course of the proceedings.

Essentially, the parties can free the tribunal from the strict confines of the law and enable it to dole out justice according to its own discretion, even if the law ordinarily would not permit that particular form of “justice” to be done. In other words, they can permit the tribunal to decide the dispute as amiable compositeur or ex aequo et bono. Under such circumstances—which do not arise frequently because parties rarely elect to so empower the tribunal—the only limitation on the tribunal’s powers is the tribunal’s own discretion.

Is interim relief available to parties under the Rules?

Yes. Under Article 31, which came into effect in June 2021, the tribunal is empowered to grant interim relief, including:

(i) injunctive relief;

(ii) measures for the preservation of evidence;

(iii) measures to protect or conserve property; and

(iv) measures to secure payment of any award that might be rendered.

With respect to applications to preserve evidence and measures to conserve property, the requirements of Article 31.2(a) and (b), which are discussed in the paragraph that follows, apply only to the extent the Tribunal deems appropriate.

The standard—which now aligns with the standard for interim measures of protection contained in the UNCITRAL Arbitration Rules—requires the party seeking protection to demonstrate to the tribunal that “(a) harm not adequately reparable by an award of damages is likely to result if the measure is not ordered and such harm substantially outweighs the harm that is likely to result to the party against whom the measure is directed if the measure is granted; and (b) there is a reasonable possibility that the requesting party will succeed on the merits of the claim.” Use of the UNCITRAL standard is unique among provider rules. It effectively obviates the need to prove irreparable harm and increases the likelihood of success.

Up next in the JAMS International Arbitration FAQ Series: our final installment, which explores how arbitral awards are issued, reviewed, and enforced under the JAMS International Arbitration Rules.

Disclaimer: This content is intended for general informational purposes only and should not be construed as legal advice. If you require legal or professional advice, please contact an attorney.