The functions of a tribunal are determined by a combination of the provisions of the arbitration agreement and the procedural laws applicable to the seat of the arbitration. The extent to which the laws of the seat of arbitration allow for “party autonomy” (the ability of the parties to establish their own procedures and rules) determines the interaction between the two. To commence arbitration, a claimant submits a request for arbitration, arbitration clause, or court order to ADR Services, Inc., and the other party (respondent) may file a response to the claim. The neutral arbitrator gathers evidence and hears arguments from both parties, and then makes an arbitral award. Pre-hearing conferences determine the procedural issues for the arbitration hearing (e.g., whether the arbitration should be confidential). At the arbitration hearing, the parties present opening statements, evidence such as documents and tangible evidence, as well as witnesses who testify and are cross-examined. Concluding observations may also be made at the hearing or subsequently in the form of a written statement after the hearing. The arbitrator then makes an arbitral award. The arbitrator`s decision consists of a written decision, which may consist simply of a statement of the remedy granted to each party or a written explanation of the arbitrator`s findings. Appeal or review of an arbitrator`s decision is limited and must be based on exceptional circumstances.
UNCITRAL does not conduct arbitration, but has published a number of recommended rules and procedures for the alternative settlement of international commercial disputes. These rules are widely used and cover all aspects of arbitration. In U.S. arbitration law, there is a small but important jurisdiction that deals with the power of courts to intervene when an arbitrator`s decision is fundamentally contrary to applicable legal principles or contract. [41] However, this jurisprudence has been called into question by recent Supreme Court decisions. [42] In general, it should not, by its very nature, be challenged in the ordinary sense of the term in arbitration. In most countries, however, the court retains a supervisory role in setting aside arbitral awards in extreme cases such as fraud or in cases of serious legal irregularities on the part of the court. Only domestic arbitral awards are subject to set aside proceedings. [Citation needed] By entering into an arbitration agreement, the parties agree to refer their dispute to a neutral court to decide on their rights and obligations. Although sometimes described as a form of alternative dispute resolution, arbitration is not the same as mediation or arbitration.
A mediator or arbitrator can only recommend results, and the parties can choose whether or not to accept these recommendations. In contrast, an arbitral tribunal has the power to make decisions that are binding on the parties. Arbitration is a procedure in which a dispute is submitted in agreement with the parties to one or more arbitrators who make a binding decision on the dispute. When choosing arbitration, the parties opt for a private dispute resolution procedure instead of going to court. The U.S. Supreme Court ruled that the Federal Arbitration Act (FAA) of 1925 established public policy in favor of arbitration. For the first six decades of its existence, the courts did not allow arbitration for “federal claims” through a clear doctrine of “non-arbitration,” but in the 1980s, the U.S. Supreme Court struck down and began using the law to require arbitration if it was included in the treaty for federal legal claims. [21] Although some jurists believe that it was originally intended to apply only to federal courts, courts now regularly require arbitration under the FAA, regardless of state laws or ignorance of public order by state courts.
[21] In consumer law, model contracts often contain mandatory dispute resolution clauses that require consumer arbitration. Under these agreements, the consumer can waive their right to a lawsuit and class action. In 2011, one of these clauses was included in AT&T Mobility v. Concepcion. [21] By accepting arbitration, the parties are renouncing, perhaps among other things, their fundamental constitutional right to be heard by a jury of peers. They cannot have a de novo (second) procedure after being submitted to arbitration. Unless otherwise agreed, the decision is legally binding and cannot be appealed except in extremely limited circumstances, such as fraud or collusion by the arbitrator. These forms of “last offer arbitration” can also be combined with mediation to create hybrid MEDALOA processes (mediation followed by last offer arbitration). [50] Contract arbitration is a legal proceeding that resolves a dispute arising out of or in connection with a contract.
It is based on a contentious agreement between the parties. In contract arbitration, the parties have agreed, in accordance with an arbitration clause in their contract, that in the event of a dispute, the matter will be resolved by arbitration. In most cases, contract arbitration is legally binding.