Achieving Fairness and Efficiency in Complex Commercial Arbitration - Part 3 - Chapter 4 - AAA Yearbook on Arbitration and the Law - 24th Edition

Lawrence W. Newman is Of Counsel at Baker & McKenzie LLP’s New York office, where his practice focuses on international arbitration and litigation. He has represented clients in numerous international arbitrations over several decades and has served as arbitrator under the rules of various institutions. He is a Fellow of the Chartered Institute of Arbitrators and a Fellow of the College of Commercial Arbitrators. Mr. Newman is the editor, co-editor, author and co-author of many books, articles and chapters in books, including The Leading Arbitrators’ Guide to International Arbitration, 2nd Edition (JurisNet), International Arbitration Checklists, The Practice of International Litigation and Litigating International Commercial Disputes (West 1996), excerpts of which have been published in Spanish in Mexico and Japanese in Japan, and Take the Witness: Cross-Examination in International Arbitration. Mr. Newman is the originator of symposia and seminars dealing with aspects of international arbitration, including the Leading Arbitrators’ Symposia on International Arbitration (Vienna, Singapore and New York) Cross-Examination in International Arbitration (Paris, Vienna and New York) and the forthcoming Presentation of Damages Evidence in International Arbitration (New York, 2012). He has been the co-author and author, since 1982, of a column in the New York Law Journal, “International Arbitration.”

He has been, since 2007, Chairman of the Arbitration Committee of the CPR International Institute of Conflict Prevention and Resolution. Previously he was Chairman, for four years, of the International Dispute Committee of the New York City Bar Association. He is a founder of and Chairman of the Steering Committee of the International Arbitration Club of New York. He has been, since 2010, Chairman of the International Legal Practice Committee of the New York City Bar Association.

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Originally from: AAA Yearbook on Arbitration and the Law - 24th Edition

It has become fashionable for complaints to be made, particularly by corporate counsel, claiming that arbitration has become more timeconsuming and expensive than it is supposed to be. It is not clear whether there is empirical evidence to support these complaints, but the perceptions that are there are strong enough to cause all participants in arbitration—counsel, arbitrators and parties—to consider how arbitration proceedings in which they are involved, or those in which they may become involved, may be handled more speedily and economically, consistent with the achievement of a just, commercially reasonable result.

It is presumably complex commercial arbitrations on which criticism has focused in recent years. The comments about excessive time and costs have discussed this kind of arbitration as being much like U.S. litigation. Some years ago, complaints about arbitration were different -- that arbitration compared unfavorably to litigation in terms of result, not cost in time and money of getting to the result. Has greater perceived fairness of arbitration been achieved at a cost in money and time?

Notwithstanding the criticism that has been made, it is not likely that businessmen entering into cross-border transactions will be likely to choose courts over arbitration when the courts of their contracting party’s home country have a reputation for exorbitant delays or for being susceptible to corruption. What businessmen need is a tribunal that is likely to produce a fair result and to do so through procedures that are prompt and understandable—and also predictable in the sense that they do not give rise to surprises. Arbitration is therefore the logical alternative to unfamiliar or untrusted courts. Businessmen must realize, however, that even with a fair, transparent and predictable process, the presentation of a complex commercial dispute to a panel of arbitrators in place of a court can be painstaking and therefore costly in time and money. This chapter discusses ways in which efficiency and predictability can be achieved in complex arbitrations.