Originally from The College of Commercial Arbitrators Guide to Best Practices in Commercial Arbitration, Fifth Edition

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The goal of arbitrators who are members of a three-arbitrator tribunal is to conduct their interactions so as to best ensure a fair, expeditious, and cost-effective proceeding and secure for the parties the benefits they sought when they elected to have their dispute determined by more than one arbitrator.

I.           INTRODUCTION

Commercial arbitrators often serve on three-arbitrator tribunals. Achieving effective performance of tripartite arbitration tribunals is not easy, due in part to the tremendous diversity that often attends their use and composition. Such tribunals are used in a wide variety of arbitrations. Many tripartite arbitrations involve claims encompassing multiple millions of dollars, while claims for less than a million dollars are often, but by no means always, heard by a sole arbitrator. For example, when the parties’ contract incorporates the AAA Rules, Rule L 2(a) provides that claims for $1 million or more will be resolved by three arbitrators unless the parties agree otherwise.

A $1 million claim still reflects a substantial sum in dispute. But if one considers how quickly costs accrue when three experienced arbitrators and a minimum of two experienced lawyers acting as counsel, along with paralegals and legal assistants, are charging their hourly rates, the total arbitral costs can easily amount to a significant percentage of the total amount in dispute in a million-dollar claim. Moreover, many commercial contracts provide for tripartite arbitration of any dispute arising under the contract, with the result that tripartite arbitrations sometimes involve claims of significantly less than $1 million. The default process under the CPR Non-Administered and Administered Rules calls for a tripartite tribunal regardless of the size of the claim. CPR Non-Admin. and Admin. Rule 5.1. In addition, disputes that appear from the original pleadings to involve very large claims may actually involve less for a variety of reasons, including some advocates’ propensity to inflate their damage assertions. In short, tripartite panels usually govern big cases, but they may also hear small cases or anything in between.