Arbitration as a Forum of Equity

Arbitration as a Forum of Equity

Arbitration is a forum of equity based on evidence, and parties who take this route should get to the issue at hand without slowing down the process with the unnecessary trappings of litigation. From the perspective of an experienced arbitrator and practitioner, this article provides insight and guidance on arbitration hearings.


Once arbitrators are comfortable with the fact that arbitration is not a substitute for litigation; that they have the power and obligation to provide an equitable forum based on the evidence; and, that their Awards will almost always remain unchallenged by the courts, they should discourage parties from attempting to graft onto the process the dilatory and expensive trappings of litigation. With these things in mind, arbitrators will get more quickly to the central, substantive issues in dispute since their single mandate is to provide a full, fair and expeditious opportunity for parties to present their cases.

Main Points

Setting the Tone for the Hearings

I have been involved in the arbitration of commercial disputes for 30 years (as a practitioner, arbitrator, administrator and author) and begin each hearing that I chair with the following: "This is a forum of equity. The rules of evidence don't apply but we will decide this case based on the evidence. You can assume that every document you wish to enter into evidence will be admitted and that every witness you want to present will be heard. With that license comes this obligation: Don't waste our time. You've selected us to be your arbitrators. You should assume that it will not take us long to 'get it' and that repetitive testimony and duplicative exhibits will slow down these hearings and may cause us to lose focus on the central issues in dispute. We have read the pleadings. We understand the main arguments. We will ask questions of witnesses when we need subjects explained in a clearer fashion. At the end of the hearing, I'll ask each of you whether you've had a full and fair opportunity to be heard. That's our commitment to you." This opening statement is usually followed by a great sigh of relief by the attorneys who, until then, had been referring to the Federal Rules of Evidence and, in their pre-hearing memos of law, to strings of 'cases on point.'

What does it mean to provide an equitable forum and what should arbitrators understand about their powers?

Courts overwhelmingly hold that they will not second-guess arbitrators since the parties voluntarily agreed to arbitrate their dispute. Since arbitration is intended to be a final and binding process, courts resist efforts by parties to get an "adversarial mulligan" (i.e., vacate an arbitration Award and start all over again with a new panel). Arbitrators are given wide latitude in managing cases, but when they go seriously "off the reservation"- such as failing to make required disclosures about themselves; deciding issues not in the pleadings; taking part in ex parte communications with parties or their counsel; or, refusing to grant a reasonable adjournment request or to admit pertinent and material evidence -- courts may very well vacate their Awards.

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