Defining the Questions - Chapter 10 - The Reasoned Arbitration Award in the United States: Its Promise, Problems, Preparation and Preservation
John Burritt McArthur has been serving as an arbitrator since 1994. He has 23 years of experience as an arbitrator, 34 years as a trial lawyer in state and federal courts around the country, and is licensed to practice in Texas, California, and Alaska as well as in a variety of federal courts. He was a Partner at Susman Godfrey LLP, worked for Hosie McArthur LLP for several years, and today has a solo practice that combines arbitration practice with complex commercial trials. He has major litigation and arbitrator experience in five main areas: Energy, Oil and Gas, Electricity; Contract and Tort Business Disputes, including UCC Disputes; Antitrust; Investment Disputes, Fiduciary and Joint Venture Claims, Securities and Insurance. Mr. McArthur's broad work experience is equally suited to business and commercial arbitrations. He has represented plaintiffs and defendants in large, often highly technical commercial cases throughout his career. He has handled federal and state court cases, arbitrations, cases in MDL proceedings and class actions. His clients have ranged from some of the world's largest corporations, including Aetna and British Petroleum, to Alaska native corporations, States, individuals and small businesses. Mr. McArthur has been acknowledged for his litigation experience by his peers. He is currently chair of the LCA's International Institute on Natural Resources, Energy and Environmental Law. He has long held an "av" rating from Martindale-Hubbell. He is a member of the Million-Dollar and Multi-Million-Dollar Advocates Forum. He has published dozens of articles on legal issues, including on energy issues, arbitration, case management, various aspects of deregulation, and antitrust. He has also served as an expert in energy cases.
A statement of his arbitration philosophy can be found at http://www.johnmcarthurlaw.com/arbitration.htmz.
Chapters Nine–Fourteen: How to write a reasoned award. The six chapters in Part Three, the book’s longest section, discuss how to write reasoned awards. They are written primarily, of course, for arbitrators. Because these chapters propose standards for writing adequately reasoned versions of the award’s various sections, they can also assist parties and their counsel when they are considering challenging awards for lack of reasons, or considering defending them against such attacks. The chapters should help courts weighing the merit of attacks that claim the award needed to say more than it did as well. Chapter Ten tackles the crucial question of how the arbitrators should identify the arguments, issues, and claims that they need to address, a very important decision that often deserves more attention and care than it gets;
Chapter Ten tackles the crucial question of how the arbitrators should identify the arguments, issues, and claims that they need to address, a very important decision that often deserves more attention and care than it gets;
from Chapter 10. Defining the Questions
The general rule for careful arbitrators is this: A reasoned award should explain at least every potentially dispositive claim, counterclaim, defense, and remedy. Moreover, in discussing them, it should identify and resolve whatever disputes the parties raise over those bundles of rights. It should discuss the main arguments at the level the parties used in their presentations, whether that requires the award to discuss a case, an internal memo with an alleged admission, testimony on a key event by multiple witnesses, or a Perry-Mason-like breakdown in the witness chair.
Awards exist to answer questions posed by parties. In general, a reasoned award is one that indicates the arbitrators’ rationales, given the evidence, the law, and the parties’ claims and arguments, as well as any concessions by the parties, on the issues of fact and law that have to be decided. What has to be decided is determined by two inputs: (1) the questions the parties put into dispute during the arbitration, and (2) whatever reframing the arbitrators do as they organize the parties’ presentation into the questions the arbitrators find necessary to decide liability and any relief.
Sometimes these two inquiries point to the same questions, sometimes the questions the arbitrators conclude are important end up being phrased differently from the way the parties presented them. To be sure that it responds adequately to the parties, a skillful reasoned award should make sure it addresses the parties’ questions in words recognizably close to their substance, even if the arbitrators then go on to reframe the questions. This is true even though usually an award only has serious exposure to challenge and vacatur when it fails to answer the dispositive questions the way the arbitrators frame them. Put another way: like judges, arbitrators are free to characterize the questions needing answers, as long as they do so with objective as well as subjective honesty.
Many points that a clever person might expect to arise from a set of facts are not at issue in a given arbitration. They may not be at issue because a party slipped up, but the seemingly obvious may be omitted because the parties know things that even clever outsiders do not. Sometimes certain claims, counterclaims, and defenses that were pled are not supported at all in later briefing and evidence. Arbitrators need not belabor hypothetical issues when that happens. An award does not have to provide an independent explanation on issues the parties raised but did not contest, or on arguments they alleged once or twice but did not maintain. But if the reason for not addressing a once-important point, and certainly any claim or defense, is that the parties have abandoned it or not supported it plausibly, arbitrators writing a reasoned award still need to make sure the award describes, even if briefly, why they see such a stark lack of support. What the arbitrators must not do is ignore claims and defenses by giving them the silent treatment.