How to make commercial arbitration e cient

WHO among us does not wish to escape substantial litigation budgets and clogged courts? Parties can hardly be faulted for seeking out a swift and cost- effective mechanism for resolving their commercial disputes. Handled carefully, commercial arbitration frequently turns out to be a quicker, more flexible, and cheaper alternative to litigation. Left to inexperienced practitioners, however, arbitration can easily become a fool’s errand. There is an assortment of practical steps which, if religiously applied, often result in an efficient and cost-effective arbitration. This article explores specific techniques whose application can yield efficiency, minimize expense, and guarantee a quick resolution at every stage of arbitral proceedings.

1. Appointing the right arbitrator

Invest some time in conducting a rigorous background check in order to select an arbitrator with the right expertise, personality and experience. It is a truism that every arbitration award is made by a human being, or a panel of them, each with his or her own background and experiences. It is, therefore, imprudent to pay little or no attention to this kind of due diligence. The process of appointing an arbitrator commences at the point when parties draft an arbitration clause. It is at that point that parties should determine, for instance, if they want their future dispute to be resolved by a lawyer, an architect or chartered accountant. Research on arbitrators’ biographies is mandatory and one can even request feedback from those who have previously dealt with a particular arbitrator. The internet can be a treasure trove in this regard. Choosing the right arbitrator will save you time, money and even tears.

2. Hiring experienced lawyers

People usually choose arbitration because of its reputed economy and efficiency. Yet the twin benefits of being cheap and efficient are often lost when parties appoint inexperienced lawyers. Inexperienced lawyers have a knack for unnecessarily applying time-wasting litigation processes. While both arbitration and litigation are adversarial proceedings, fundamental differences exist between the two. Appreciating these differences will go a long way in yielding a cost- effective presentation of a case.

Lawyers without arbitration training have a tendency to treat arbitration in the same fashion that they handle court litigation. This almost always results in requests for voluminous discovery, pedantic adherence to adjectival law and unnecessary motion practice. To avoid these drawbacks, it is important to conduct due diligence or even ask counsel if they have experience in handling arbitration proceedings.

3. Reducing discovery to what is necessary

Discovery of evidentiary documents should be confined to what is necessary. Discovery costs often comprise a substantial portion of your litigation budget. Arbitration should not be held to ransom by this unduly extensive approach to discovery. The parties can even agree on an arbitration clause which stipulates that discovery will be limited to what is reasonable. However, even if there is no such clause, it is in the best interests of the parties and the duty of the arbitral tribunal to come up with a discovery schedule that is restricted to the exchange of information necessary to enable the arbitrator to understand and fairly decide the case. Interrogatories or requests for admissions are seldom appropriate.

4. Attending the preliminary hearing

Attendance at the preliminary conference is a must. This hearing gives you an opportunity to figure out the arbitrator, ascertain the other party’s position and contribute to the development of the case schedule. The pre-arbitration hearing presents the first opportunity for the parties to make their positions known to the arbitrator and to discuss a case schedule. It is not true that only lawyers are supposed to attend a preliminary hearing; clients are allowed to attend. Nowadays travelling costs are no excuse because these meetings can be conducted online.

5. Curtailing the duration of hearings

Oral hearings often comprise the most costly part of arbitral proceedings. This cost can be considerably reduced if the parties set reasonable limits on the scope or duration of hearings. Restrictions of this nature usually encourage the parties to focus on the most relevant witnesses. In appropriate cases, parties can agree that their disputes will be determined on the basis of documents alone provided, of course, that they can also stipulate that the arbitrators can determine, after consultation with the parties, that a hearing is appropriate.

6. Staying within your budget

A cost-benefit or return-on-investment analysis is critical in deciding whether or not to pursue arbitration. Parties should instruct their attorneys to come up with a budget which they will regularly update throughout the various phases of the case. Generally, and barring special circumstances, your arbitration decisions should be guided by traditional cost-benefit or return on investment analyses.

7. Being professional and efficient

Lawyers play an indispensable role in ensuring that the arbitral hearing is completed as efficiently as possible. It is wise to impose time limits. Bundles of evidence should be indexed and paginated and copies must be provided to all the participants. Slides or other such demonstrative visuals can be effective presentation tools. Both counsel and witnesses should avoid making faces and producing irritating sounds like groaning, scoffing or giggling when an opponent is presenting its case. When rendering testimony, parties should direct their comments to the arbitrator and avoid unwarranted arguments with lawyers during cross-examination.

8. Confining yourself to the facts

Arbitrators are usually experts on the subject matter in dispute. They tend to pay attention to the facts of your case than to generalized pleas for fairness and equity. Arbitrators seek to appreciate how your case fits into a framework which they have already experienced. It is, therefore, advisable to present your claims in the clearest way possible and to focus on illustrating how the particular facts of your situation warrant relief. The trick is to focus on the key issues in dispute. Generalised pleas for fairness or equity seldom impress the arbitrator.

Conclusion

Following the tips and techniques detailed above will increase the efficiency, minimize expense and ensure a quick resolution at each step of the arbitral hearing.

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