Administered vs. Non-Administered Arbitration - Chapter 15 - AAA Handbook on Commercial Arbitration - 2nd Edition
Glen H. Spencer is vice president of educational outreach with the American Arbitration Association, specializing in training legal and human resource professionals in employment-related disputes.
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Arbitration is a well-established dispute resolution process, which is regularly used to resolve both domestic and international disputes.1 As such, various arbitral options exist for the users of the process. Central to the question of “how to arbitrate” is the question of administration. That is, is it necessary or desirable for an administering agency to handle the arbitration, as opposed to the parties and the arbitrator directly administering the process themselves?2 Whatever the choice, it is clear that parties cannot escape the need for procedural management of the arbitration process, and someone, or some organization, has to do it.
For example, someone must ensure that written notice of the arbitration hearing is delivered to all parties in accordance with arbitration statutes. Similarly, someone must ensure that the arbitrator issues the award in a timely manner to ensure its finality. Apart from these legal requirements, there are a host of additional responsibilities that an administrator would regularly perform.
Three possibilities for “administrator” exist: (1) an independent and neutral third-party administrative agency, (2) the arbitrator or chair of a three-person panel, and (3) the parties themselves. So, the question is not whether arbitration should or should not be administered, it is, rather, who is best situated to perform the administrative functions. Ultimately, the parties will want to achieve the triune purpose of arbitration-speed, economy, and finality.