Originally from The Reasoned Arbitration Award in the United States: Its Promise, Problems, Preparation and Preservation

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 Twelve discusses how much detail is needed to tell an award’s factual story.

PREVIEW

from Chapter 12. Narrating the Facts

Most arbitrations are decided on their facts, as, for that matter, are most cases tried in court. Even awards that sound as if their most important conclusions are couched in legal language often turn out to be driven by factual judgments that control the law’s application. Not surprisingly, the focus of the awards in Appendices A and B is almost entirely factual.  Many arbitrations do not contain any material dispute of law.

A.  The Centrality of Facts

Even when the parties do dispute some aspect of applicable law, the main issues that require hearing time, thought, and award explanation tend to be found in the parties’ radically divergent views of the facts.  So, too, when parties opt for arbitration because they want specialized expertise in their decision-makers, usually what they are looking for is a factual expertise in an industry or body of knowledge, not judge-like nimbleness with the law. 

It has long been the case that courts only very, very rarely overturn arbitrators’ factual conclusions. Indeed, when courts recite the generalization that they cannot invade the merits, having “no business weighing the merits” as the Supreme Court said in its Steelworkers trilogy, what they almost always are talking about are the facts.  Courts’ right to invade the arbitrators’ conclusions of law is a more complex topic because the law of arbitration offers several inroads for courts to reconsider the arbitrators’ legal conclusions – challenges for exceeded powers, misreadings of public policies based upon law, unwaivable statutory rights, the manifest disregard doctrine, and consensual review of the law in jurisdictions where those agreements are enforced. No similarly varied set of paths open up judicial review of the facts.

It remains as true today as it was when John Torrey Morse wrote it in his nineteenth-century treatise on American arbitration that questions of fact are “peculiarly within the scope of [the Arbitrator’s] authority” and that arbitrators’ decisions in the factual realm are “absolutely final, and not subject to review or examination,” with an exception only when it can be proven that gross corruption or some other extreme bias or misconduct distorted the decision.

Even though arbitrators receive more deference for their fact findings and interpretations than their legal conclusions and interpretations of their powers, care about the facts is centrally important to award writing. A careful rendition of the facts about, say, a contract breach or an allegedly false statement often decides a dispute without any decision needed on applicable law and what it means.

Facts should tell the story of why an arbitrated dispute exists at all. They should point toward the ultimate questions and their resolution. The facts should appear in the award, of course, with an eye to the burden of proof. They should unfold in a way that makes clear why the arbitrators find one side’s story more credible and more persuasive under the applicable burden of proof. A well-written award often indicates who will prevail by its factual narrative even if it comes before any serious discussion of legal standards and applications.

A reasoned award must include the major facts on which both sides rely. It must resolve all material factual disputes. Not only must it find whatever facts support the victor’s story, but it must explain why the losing party’s factual allegations were not persuasive enough. Readers should not be left in any doubt about how the dispute arose, what it is about, what happened, and how the equities of the dispute stack up.