Calling All Arbitrators: Reclaim Control of the Arbitration Process—the Courts Let You - Chapter 19 - AAA Handbook on Arbitration Practice - Second Edition
Author(s):
David E. Robbins
Page Count:
50 pages
Media Description:
1 PDF Download
Published:
December, 2015
Author Detail:
David E. Robbins has been an AAA arbitrator for 30 years and is a partner in Kaufmann, Gildin & Robbins LLP, in New York City, where he specializes in commercial arbitration, mediation and disciplinary proceedings before regulatory authorities. Previously, he served as Special Deputy Attorney General of New York State and was Director of the Compliance, Arbitration and Disciplinary Hearings Departments of the American Stock Exchange. The author of the Securities Arbitration Procedure Manual (5th ed., 2015, Matthew Bender/Lexis/Nexis), he also writes the annual "Practice Commentary" in Article 23-A of the New York General Business Law for McKinney’s Consolidated Laws of New York. In addition, he chairs the New York State Bar Association program on securities arbitration and mediation.
Description:
Originally from:
AAA Handbook on Arbitration Practice - Second Edition
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CHAPTER 19
CALLING ALL ARBITRATORS: RECLAIM
CONTROL OF THE ARBITRATION PROCESS—
THE COURTS LET YOU
David E. Robbins
I. Introduction
Arbitration has been billed as the cost-effective, expeditious
alternative to commercial litigation. It has, however, to a large extent,
become a costly, dilatory and unpredictable melding of litigation and
arbitration, primarily due to the parties’ representatives who are
responsible for grafting the implements of litigation onto the much simpler
system of arbitration. The forum of equity has become the forum of law.
Regrettably, arbitrators are often their “aiders and abettors” when
they permit attorneys to wrest control of the process. Such arbitrators are
fearful that the courts, when reviewing their conduct, will vacate their
awards. That fear is unfounded and this chapter will show you why that
is so. The consequence of arbitrators relinquishing responsibility for
managing the arbitration process is twofold: first, it will lead constituents
of arbitration—i.e., businesses and attorneys—to lose respect for the
process. Second, it will cause those arbitrators to suffer a loss of income
(not surprisingly), since users of the process want an efficient arbitration
and will no longer select them. The purpose of this chapter is to provide
a backbone transplant to my fellow arbitrators, to endow them with the
courage to reclaim control of the process while still affording all parties a
fair opportunity to present their case.
The places to look to resolve this problem are court decisions on
motions to vacate awards. Hindsight is 20/20 and we can learn from it.
The disappointed parties who filed these motions hoped for an arbitration
afterlife, but what they more often found was a second loss in the courts.
Despite the occasional headline declaring the overturning of an
arbitration award, courts have overwhelmingly held that they will not
second-guess arbitrators since the parties voluntarily agreed to arbitrate
their dispute and since arbitration is a forum of equity. Doubts as to the
correctness of arbitrator conduct are outweighed by the agreement of the
parties to forgo certain judicial procedures in exchange for a hearing by
an experienced arbitrator of their choosing who is mandated by ethical
principles to “cut to the chase.” Since arbitration is intended to be a final
and binding process, courts steadfastly resist efforts by parties to get a
“second bite of the apple”—i.e., another arbitration hearing between the
same parties.
This chapter explains the grounds for vacating arbitration awards
primarily based on arbitrator conduct and rulings. Arbitrators are given
wide latitude in managing cases, but when they go seriously “off
course”—such as in failing to make required disclosures, or deciding
issues not in the pleadings, or taking part in ex parte communications, or
refusing to grant a reasonable adjournment request or admit pertinent and
material evidence, or denying parties the basics of due process—courts
will vacate their awards. But not often.
II. What the Law Demands of Arbitrators
Generally speaking, arbitration requires an impartial decision maker,
fair procedures, an adequate opportunity for the parties to present their
case and an award based on the evidence and not on an arbitrator’s surmise
of “what really happened.” Thus, if an impartial arbitrator provides the
parties with an opportunity to make their arguments and offer evidence to
enable the arbitrator to make an informed decision, the benchmark of
fundamental fairness is met.1 However, since arbitration is intended to be