It Is the Parties' Arbitration - Chapter 18 - 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 Seventeen–Eighteen: Reforms to make arbitration more reasoned when that is what the parties want.
Chapter Eighteen ends the book with a reminder of arbitrators’ core responsibility to carry out the parties’ wishes. That duty extends to requests about the award’s form. Parties can have many reasons for wanting reasons. Arbitrators often never learn those reasons. When the parties make their choice clear, arbitrators, who after all serve at the will of the parties, are obligated to carry out the requests without second-guessing the parties’ thinking.
Ours is a service profession. We do not write awards for our own edification. We must not resist the form of award, and the type of decision-making, that the parties select.
from Chapter 18. It Is the Parties' Arbitration
If arbitration is to keep up with the greater role that continues to be thrust upon it, it is vitally important that arbitrators not forget that they are bound to obey the parties’ instructions, including on the form of award and on the rule of law. Complying with requests for reasons is not a matter of personal arbitration philosophy, arbitrator discretion, or the arbitrator’s feelings about the needs of the arbitration system as a whole.
Arbitration has been moving toward reasoned awards, these awards increasingly are the default form in most arbitration rules, and the Supreme Court decided in the late 1980s that arbitrators were authorized to decide federal statutory claims after all because it had become confident that arbitrators and arbitration processes would be adequate to identify the law and to follow it. Why, then, do many arbitrators fail to give reasons, which would provide direct evidence that arbitrators are indeed doing their job, when parties ask for them? If there is a core principle of arbitration that overrides all others, surely it is that arbitration is a consensual process and arbitrators are hired to carry out the parties’ wishes on the kind of arbitration they want. Honoring requests about the form of award should be an easy obligation to fill. It should be a classic no-brainer.
This book repeatedly has asked what arbitrators who did not issue reasoned awards, when that requirement clearly applied, thought they were doing. Consider the seventeen-day (three weeks and two days!) hearing, with its over 800 exhibits, that did not produce reasons in Tully Construction Co. v. Canam Steel Corp., not even in the second, post-vacatur and post-remand “Enlarged” award; Galloway Construction, LLC v. Utilipath, another construction case, with its 600 exhibits but no reasons on rejected counterclaims and defenses; Cat Charter, LLC v. Schurtenberger with five days of hearing but whose arbitrators wrote just two pages to offer a few ultimate conclusions and ignored four of six claims and all of the defenses; Leeward Construction Co. v. American University of Antigua (AUA)-College of Medicine, with its five-day hearing after which each side provided a proposed reasoned award as the arbitrators asked, but the arbitrators instead wrote a highly complex, oddly ordered award that looked like neither proposal and never explained why they multiplied the dozen or so questions the parties identified in their proposed awards – the questions truly “in” the case – into a whopping 68 questions and then announced their answer to each without explaining how they arrived at those 68 answers; and Rain CII Carbon LLC v. ConocoPhillips, with over $17 million at stake in past damages alone but whose arbitrator took the losing party’s drafts, removed the reasons it contained, but assiduously avoided including any of his own thinking, before finalizing the award (for the other party!).
Why were the arbitrators in these cases so eager to be so silent even though they knew they were to write reasoned awards?