Counsel Behavior That Risks an Adverse Decision from the Arbitral Tribunal - Chapter 4 - The Dark Side of Arbitration
Originally from The Dark Side of Arbitration
I. The “All-or-Nothing” Approach
As part of their advocacy tactics, counsel occasionally adopt an approach which, though neither disloyal nor dishonest, may be just as dangerous. I refer to the “all-or-nothing” approach that sometimes counsel take in their prayers for relief in respect of the entitlement to their client’s claims (A), the arguments put forward to defend themselves against opponent’s claims (B), or the amount of damages claimed (C).
Counsel probably act this way because they believe that, if they were to maintain before the arbitral tribunal, even as an alternative or subordinate request, that they may not be entitled to all the claims they advance, that their only defense arguments might fail, or the amounts claimed as damages might possibly be adjusted downwards should the arbitrators find reason to do so, the opponent or the arbitral tribunal might equate their position with “hedging” and see that as a sign of weakness.
As a consequence, they fail to submit to the arbitral tribunal alternative or subordinate positions aimed to offer arbitrators a road map in the event that the tribunal opts for a full or partial rejection of counsel’s claims, defenses or request for damages.
The effect of this attitude is that the arbitrators, faced with insufficient evidence, may merely reject counsel’s claims, defenses or request for damages outright precisely for lack of evidence, and may take the view that, since no alternative or subordinate claims, defenses or request of damages have been introduced, to possibly consider alternative or subordinate claims in the award would be ultra petita. Additionally, the arbitrators may maintain that, since the party has not pleaded for a partial recognition of its claims or of the amount sought, the opponent has not been placed in a position to possibly develop its counter arguments. Consequently, should the arbitrators adopt ex officio a decision other than to reject the claims outright, and indeed choose to themselves develop in the award the reasoning for a decision that recognizes only part of the claims or of the amounts sought, they could violate the principle of due process and expose the award to the risk of being set aside. Every arbitrator would hesitate to take this risk, as one of the primary tasks of an arbitral tribunal is to ensure the safety of the award.