ARBITRATION II:Varieties of Arbitration, Process of Arbitration, Contents of Arbitration Act

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Conflict Management HRM624

Lesson 38

ARBITRATION II

Quotation

"Excellence is to do a common thing in an uncommon way". Booker, T.

(Moving from complicated court procedures to simplified and more human procedures to resolve disputes

among individuals.)

We will learn the following points in this lecture

1. How the arbitration process works.

2. The situations in which courts intervene to enforce, modify, or eliminate the process or outcome of

arbitration.

3. The many ways in which the law supports a deferential attitude toward the arbitration process.

4. The reviewability of arbitration awards.

5. The problems of choice of law in interstate, international, and multinational arbitration.

Arbitration

Mediation, arbitration, and litigation are the main forms of ADR.

Local Govt. Ordinance 2001, have many sections relating to ADR (Alternative Dispute Resolution).

Arbitration is a legal process whereby a neutral third party (arbitrator) hears the dispute and issues an award.

Arbitration awards are final and binding on the parties and can only be challenged in very exceptional

circumstances. An arbitration award has a status similar to a judgment and arbitration.

Arbitration award:

The binding decision issued by an arbitrator is called arbitration award.

Executory agreements to arbitrate:

Agreements to submit future disputes, not currently in existence, to arbitration are called executory

agreements to arbitrate.

De novo: Latin, meaning, "a new." In the law, a retrial of a previously decided dispute, in which all of the

legal and factual issues may be relitigated and redecided. A trial de novo is in contrast to an appeal, in which

only errors of law can be the basis for a change in outcome.

Varieties of mediation

Formality and

Informal arbitration: arbitration characterized by

rigidity of the

minimal participation by lawyers, minimal

process

discovery, procedural rules, or rules of

evidence. Arbitrator may act in a facilitative

manner.

When a contract to

Executory arbitration: agreement to arbitrate

arbitrate is formed

predates dispute.

Types of labor

Interest arbitration: arbitration to determine

arbitration

terms of collective bargaining agreement

Private or public

Private arbitration: arbitration not under

sector

auspices of public sector.

Varieties that restrict High-low arbitration: arbitrator's decision is

the nature of the

restricted to a range of possible outcomes by

arbitrators award

prior agreement of the disputants.

Bindingness of the

Binding arbitration: arbitration in which the

outcome

outcome is binding on all disputants ("true"

arbitration).

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Conflict Management HRM624

Varieties of Arbitration

Beyond the dichotomy between traditional and legalistic arbitration, there are other variants commonly seen

in today's arbitration practice.

Executory and Ad-Hoc arbitration:

Executory arbitration is arbitration provided according to an executory agreement.

Ad-hoc arbitration is arbitration agreed to after the fact of a dispute.

Administered and non-administered arbitration:

Another way to distinguish forms of arbitration is to consider whether the arbitration is administered or non-

administered.

Interest and Rights Arbitration:

Labor arbitration is divided into interest arbitration and rights arbitration according to the sorts of issues being

arbitrated.

Other arbitration varieties: One can distinguish between private arbitration and court-based arbitration.

Litigation

Arbitration

Mediation

Formal process

Less formal process

Least formal process

Formal rules of evidence

Rules of evidence

Rules of evidence do not

relaxed

apply

Formal discovery

Limited discovery

Informal fact-finding

Public record

Hearings are private

Private and confidential

Judge/Jury makes

Arbiter makes decision

Parties make decision

decision

Verdicts final, subject to

Decisions can be binding Parties decide whether

appeal

with limited appeal

to settle; agreements

rights

are enforceable

contracts

Expensive and time-

Often quicker and

Quicker, cheaper and

consuming

cheaper than

less stressful than

litigation

Process of Arbitration

Arbitration consists of eight basic steps:

1. Creating the arbitration contract

2. Demanding, choosing, or opting for arbitration

3. Selecting the arbitrator or penal of arbitrators

4. Selecting a set of procedural rules

5. Preparing for arbitration

6. Participating in the arbitration hearing

7. Issuing the arbitration award

8. Enforcing the award

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Conflict Management HRM624

Creating the Arbitration Contract

Arbitration always begins with a contract to arbitrate, the arbitration contract may be executory (developed

prior to the development of a dispute) or ad-hoc (develop to resolve an existing dispute).

As with any other contract, arbitration contract should be designed to minimize the chances of dispute

escalation, should anticipate future developments, and should be appropriately fair and equitable.

Additional points for arbitration contract are given below:

Contents of Arbitration Act

1. The matters to be arbitrated should be set out explicitly.

2. The expenses of arbitration (arbitrators' fee, cost of transcripts, and cost of hearing room) should

be shared equitably among disputants.

3. Arbitrators' selection and qualification should be considered carefully.

4. The agreement should specify whether discovery is to be permitted.

5. The hearing of hearings and their duration may be explicitly scheduled.

6. Privacy and confidentiality should be addressed.

7. The roles of arbitrators should be clarified duly.

8. Rules of evidence may be specified with mutual agreement.

9. The disputants should agree about the provision of specified documents with a schedule for

submission.

10. The contract should specify the nature of arbitrators award (just outcome or with explanatory

opinions).

11. Reviewability and enforcement of the award may be specified (law must be in purview).

12. Choice of law may be spelled out in the agreement, especially if the arbitration is between different

states.

13. Provisional remedies or temporary injunctions may be needed in an arbitration contract.

14. Disputants may like to include a class providing mediation as a first resort in any executory

agreement to arbitrate.

Law of Arbitration

Arbitration would be an extremely simple process if everyone involved in every arbitration proceeding

accepted it with enthusiasm. However, arbitration, being an adjudicatory process, frequently leads to at least

one dissatisfied customer. And when a disputant is dragged, kicking and screaming into an arbitration he

consider loathsome, the disputant is likely to search for ways to avoid the process or its outcome.

Before Arbitration

When should a dispute be arbitrated?

Enforceability and arbitrability.

Enforceability: Whether the contract to arbitrate is valid and can be enforced against the party seeking to

avoid arbitration.

Arbitrability: Whether a particular dispute is subject to an agreement to arbitrate.

After Arbitration

1. Enforcement of arbitration awards.

2. Review of arbitration awards.

3. Choice of law during arbitration.

4. Choice of law in matters of enforceability, arbitrability and reviewability.

Summary

Arbitration contract is extremely important. It should be explicit and comprehensive as it will guide the

process of arbitration. It also assures enforceability and implementation. It improves the acceptance of the

award by all the disputants. In short a good arbitration contract is a guarantee for the successful

implementation of the award.

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