Arbitration Flashcards
Arbitration Institutions
> function as support services for arbitrators
- connects them with potential clients
- gives space to hold arbitrators
- rules for conducting arbitrations
- billing services for collecting their fees
- AAA, JAMS, and CPR after general arbitration services
Arbitration Process
> most arbitrations involve a hearing
- witness are sworn, examined, cross-examined, and exhibits are entered into evidence
after all evidence and briefs are in, arbitrator issues a decision
arbitral award is final and binding and enforced by the courts cannot be appealed. very few grounds for annulment
Reasons to choose arbitration over litigation
> relative speed and economy
privacy and avoidance of precedent
choice of expect decisionmaker
informality, arbitral flexibility, finality
How to dispute enforcement of arbitration clauses (2 FAA)
Unconscionability, fraud, mistake, lack of capacity, duress, and severability
Types of Arbitration
(1) labor management (between employers and unions)
(2) commercial arbitration
(3) international arbitration
others: administrative/regulatory, family, public sector
Labor Management Arbitration
> between employers and unions
governed by 301 of National Labor Relations Act (NLRA)
collective binding agreement
Commercial Arbitration
between:
(1) 2 or more business entities
(2) businesses and consumers or
(3) employers and non-unionized employees
- construction, leases
all of these are governed by the Federal Arbitration Act (FAA) and related state arbitration laws
Binding Arbitration
> arbitration process
parties agree through contracts/agreements to submit their dispute to a neutral party whom the have selected to make a decision
- used in industrial labor relations and commercial and consumer disputes
- parties customize the proceeding
International arbitration
governed primarily by 1958 UN Convention of the recognition and enforcement of foreign arbitrational awards as adopted by Congress in 2018 and the new york convention and the faa
Administrative/Regulatory Arbitration is governed by…
federal statutes
Family and Public Sector arbitration is covered by…
state law
Arbitrator
- parties can select their decision maker based on subject matter expertise
- not credentialed by state or national boards
- like judges, they are granted immunity from civil liability when they act in their adjudicative capacity
Separability Doctrine
the doctrine calls for the arbitration provision in a larger contract to be treated as a presumptively valid contract that is separate from the larger contract.
Section 3 and 4 of the FAA
requires the court to enforce an agreement to arbitrate when the court is satisfied that an agreement to arbitrate has been made
Most fraud cases are direct at the
entire contract
Unconscionability
> the most common defense
the the provision is substantively and procedurally too one sided or unfair to be enforced by a court of law as a matter of policy; must be bother substantively and procedurally unconscionable before striking it down
Procedural unconscionability
establishing surprise, such a placement of the arbitration provision in an obscure part of a larger contract between the parties
Substantive Unconscionability
established by showing an arbitration provision is too one sided, overly harsh, shocks the conscience, or sometimes frustrates the reasonable expectations of the parties
Sobel
- the award as it is should be enforced
- you cannot force the arbitrators to give reasons for their award
Section 10(a)(1)
provides for an award to be vacated where the award is procured by corruption, fraud, or undue means. The standard is high
Section 10(a)(2)
provides that an arbitral award may be vacated where there was evident partiality or corruption in the arbitrators, or either of them
Active Partiality
refers to actions by the arbitrator indicating that they is predisposed in favor or against one of the parties
Passive Partiality
circumstances surrounding the arbitrators that may give rise to inferences of partiality, even where there is no demonstration of active partiality, such as an arbitrators relationship with one of the parties
Section 10(a)(3)
provides that an arbitral award may be vacated where the arbitrators are guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced
Section 10(a)(4)
provides that an arbitral award may be vacated where the arbitrators exceeded their powers, or so imperfectly execute them that a mutual, final, and definite award upon the subject matter submitted was not made.
- Arbitrators exceed their power when they issue an award not presented to them in the submission of the arbitration or when they fail to adhere to other constraining criteria prescribed by the parties
Manifest disregard
the claim is that the arbitrators award contradicted clearly controlling law, that the arbitrator knew what the law was and deliberately disregarded it.
Arbitration award, public policy
to determine if an arbitration award violates public policy, a court must assess whether the specific terms in the contract violate public policy by creating an explicit conflict with other laws and legal precedents
Other non statutory grounds
courts have also vacated arbitration awards that are arbitrary and capricious or are irrational
Punitive Damages Awards
Arbitrators routinely award punitive damages even when the agreement of the parties may not expressly authorize them. Some courts have held that arbitrators cannot award punitive damages. Some have held only punitive damages if they are specifically provided for in the parties agreement.
Gunboat diplomacy
companies invested in foreign countries and hoped their governments would protect them if they were not treated well
BIT
bilateral investment treaty model
BITs were designed to provide for the protection of foreign investment in each country and for treatment that is no different from the experienced by the host country investors
Can you go to court and have the resolution enforced?
yes
Essence Test
- Bargaining power is usually one sided to the boss
- Unionizing raises the bargaining position of the employees
- Fundamental role of the arbitrator is to interpret the collect bargaining agreement
7 elements of the arbitration agreements
Consent, scope of the dispute, institution and rules, seat of arbitration, choice of law, language, method of appointment
NY Convention
force the party to arbitrate (null void and inoperable, look at domestic law
Enforcement of the award
article 4 of the ny convention
annulment of the award
domestic law of the seat
severability
judges can sever the arbitration clauses from a contract and force the company w/ more bargaining power to pay
