Published in Dispute Resolution Journal (June 2020, Vol. 74, No. 3), the flagship publication of the American Arbitration Association. © 2020, American Arbitration Association. It is reprinted here with permission.
EXCERPT:
“There is a deceptive simplicity about the way in which arbitral proceedings are conducted… In fact, the appearance conceals the reality.”
Introduction
Arbitration is simple. Parties select a person or persons — the arbitrator(s) — whose expertise or judgment they trust to resolve their differences in a privatized forum. After each party puts on their case, the arbitrator(s) consider the arguments and evidence and renders a binding decision.
Given the simplicity, informality, and efficiency offered by arbitration — as compared to courts of law — it is easy to understand why arbitration has been a readily accepted approach to dispute resolution around the world. This appeal has been especially true for the construction industry, where arbitration has become the predominant form of dispute resolution because it offers a method that is better able to manage the complex, multi-faceted, and highly technical features of construction disputes than the U.S. federal or state courts.
But as the quote above indicates, notwithstanding arbitration’s conceptual simplicity, in practice, arbitration proceedings vary widely depending on the legal traditions of the parties, counsel, and arbitrators. In other words, although arbitration is widely accepted in jurisdictions around the world, the practical reality is that not all arbitrations look the same. Accordingly, given that arbitration is part of a much broader global phenomenon, what can we learn about the practice outside the United States to help improve the U.S. approach to arbitration?
In that vein, this article questions some of the current norms associated with the management of U.S. domestic construction arbitrations and submits that international arbitration procedures may improve efficiencies and outcomes in many construction cases. This is particularly true for megaproject disputes, where it is increasingly paramount for parties to carefully present and organize their case in front of the arbitrator(s) given the significant complexities and facets associated with those arbitrations.
In the United States, there is no shortage of guidelines, protocols, or model rules, that aim to improve efficiencies associated with construction arbitration as compared to U.S. courtroom litigation. However, parties, counsel, and arbitrators in the U.S. domestic arbitrations commonly utilize procedures that, more often than not, mimic the practices seen in the U.S. courts. Certainly, it is understandable that U.S. attorneys naturally gravitate toward U.S. federal and state court practices as a model for domestic arbitrations. But why is it necessary for U.S. litigation practice and procedure, in general, to so heavily influence U.S. domestic arbitrations?
As arbitration has become widely adopted in jurisdictions around the world, it has largely become a lingua franca for the resolution of transnational disputes. As a result, over the course of the last several decades, the modern practice of “international arbitration” has developed. International arbitration — generally arbitration involving parties from different countries, counsel from different legal traditions, and/or a dispute located outside the United States — blends common and civil law legal traditions into a single dispute resolution process. Thus, despite falling under the broad umbrella of “arbitration,” international arbitration retains characteristics that are noticeably distinct from practices utilized by most U.S. domestic arbitrations.
This article introduces five distinct international arbitration procedures and explains how those practices might be utilized in U.S. domestic arbitration proceedings. In doing so, the authors hope to spark a broader debate about whether domestic arbitration practices in the United States should begin to shift away from typical U.S.-styled litigation practices in favor of a different model.
This article is structured as follows. First the authors provide a generalized introduction into international arbitration and highlight some of the conceptual features that make the dispute resolution process distinct from U.S. domestic arbitrations. Second, the authors outline five distinct procedures utilized in international arbitrations — (A) Statements of Claim Memorials; (B) Witness Statements; (C) Document Disclosure; (D) Order of Evidence; and (E) Joint Expert Procedures — that parties, practitioners, and arbitrators should consider applying to U.S. domestic arbitrations when attempting to determine how best to manage the proceedings.