Archive for April, 2013

Note of an intervention in a recent discussion

“If a Layman may comment on what seems an esoteric legal debate.  I suggest that ordinary arbitration is not a process at law.  Nor are arbitrators judges; Equally they are not delegates.  The word tribunal is misleading; arbitrators form a panel or ad hoc committee.
To justify by Natural Law the duty of each member to form his own opinion while seeking to achieve a collegiate finding would perhaps take too long, (I expect that I will try that one day.)  Suffice to say that the duty of the empanelled members to seek common ground is well-founded in custom; remember the two arbitrators who used to refer to an umpire only if they could not find that common ground.
If the three arbitrators cannot, in all conscience, sign the award, or if someone cannot sign it without expressing reservations, then the Collegiate process has failed.
But these arbitrators are paid by the parties alone.  With the most sincere respect to the Supreme Court in Jivraj v Hishwani, they are still servants of the parties if not employees.  The parties are entitled to know what went wrong.  Just as they have a right to the reasons for the Award, they have a right to the reasons for dissent.
The danger, we are told, is that the memorandum of dissent will be taken into account by a Court in proceedings for setting aside or for enforcement.  The answer to that, I suggest, is simple.  The dissenter is either wrong or right.  If the dissent is wrong, the Court will discard it; no harm done.
If, on the other hand the dissenter is right, then the Court will no doubt find accordingly and harm, possibly serious harm will be averted.
It seems entirely logical, but then I’m an Engineer and no Lawyer.​”

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I was talking, well chatting over the Internet, about the cost of arbitration when a  friend said, “And what about the cost of all that disclosure?”.  It made me think, because, before I studied Law, I had to learn a smattering of Swiss Law rather quickly, having been appointed as arbitrator on a panel in Switzerland.  Berne actually – it may be the capital but it was not easy to get scheduled flights from London or Budapest.  You might argue that both sides were equally inconvenienced.

Anyway, there was no discovery and, as I recall, no requests for disclosure.  To common lawyers, that may seem strange.  Those piles of documents are part of the fun, as is sitting in an opponents office reading his files in case there’s anything interesting there – there never is, but the Client is paying . . .

But why discovery?  To answer that, one must go back to the first meeting with the arbitrator.  One party, often the respondent, will say, “We don’t know how much time and what witnesses we need until we know their case.”  Really?  These parties have been wrangling for months, perhaps years, over every jot and tittle of the facts and the arguments that got them here.  In the Arbitration Act 1996 (England and Wales – by the way, the University of Glamorgan is now subsumed into the University of South Wales) is the proposition, “The object of arbitration is to obtain the fair resolution of disputes . . .”.   There has to be a dispute, a claim that is not accepted, for an arbitration to exist at all.  It’s no good saying, as one might in a Court, “I’m sure he’s liable for something, let me sift through his papers to see what it is.”.

I don’t say that disclosure is never necessary but it isn’t necessary for the creation of a case, for making a claim.  It may be necessary as proof but then the claim has been set out and it’s proof that is needed.

I’ve never known whether English/US style discovery is purely for fishing of if lawyers hope that the prospect of all those documents will persuade their opposite numbers to make a deal.  Whichever it is, it doesn’t often work.  The high cost of disclosure and the associated reading and copying – never selective – seems to be slipping into International Arbitration, as if it weren’t expensive enough.  It would be good to avoid it.

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