Arbitration:

my arbitration process

There are many ways to manage an arbitration. This section outlines mine.

contents of this section

• to begin: my conflict of interest search
• scope of the arbitration
• arbitration agreement
• my undertaking & terms
• survey & determination of procedure
• setting the timetable
• facilities for hearing the arbitration
• service of materials for arbitration
• offers to settle
• awards & supplementary awards

•  to begin - my conflict of interest search:

Whether my appointment comes about by consent of the parties or by Court Order, I cannot act if I have a conflict of interest. Please send me a list with the full names of all parties to the dispute as soon as you can, so I can make the conflict search and confirm whether or not I can accept the case.

•  scope of the arbitration:

An arbitrator has power only with respect to subject matter expressly delegated to him or her. If the arbitrator makes an award that falls outside the defined scope, that award is void.

Care must be taken, therefore, to ensure that drafting of the clause defining the subject matter of arbitration is clear and contains everything the parties want to include in the proceeding. Language that is incomplete, ambiguous or contradictory -- or language in one document that does not match language in another -- can lead to disputes between the parties, motions within the arbitration and/or in Court, and even a failure of jurisdiction in the arbitrator, which can render an award void, in part or full, all of which can be costly and a waste of time.

•  arbitration agreement:

The Ontario Arbitration Act, 1991, governs arbitration of civil disputes in Ontario. Although parties are permitted in many respects to manage their arbitration process as they like, there are some provisions in the Act that are mandatory, which is to say that parties cannot contract out of the operation of those provisions. Section 3 of the Act lists those provisions. Before drafting an arbitration agreement, therefore, s.3 of the Act should be reviewed as to matters in connection with which contracting out is prohibited.

These issues should be addressed in an arbitration agreement:

• sources of the arbitrator's jurisdiction (contract, statute, Order);
• agreement to submit to arbitration;
• the issues for arbitration;
• waiver of any right to litigate in Court;
• confidentiality obligations;
• how communications are to be conducted;
• governing law;
• time for delivery of the arbitrator's award, and typically a provision that it be in writing with reasons;
• provision for delivery of the arbitrator's supplementary award dealing with interest and costs and any offers to settle, typically also in writing with reasons;
• provision as to finality, appeal, review and enforcement of the award & supplementary award;
• any terms as to withdrawal from arbitration by the party/parties;
• termination of the arbitration by reason of settlement;
• the arbitrator's power to terminate the arbitration;
• the parties' agreements as to the arbitrator's compensation and disbursements incurred in the arbitration process;
• the arbitrator's right to resign, and terms;
• severability;
• formalities of execution & exchange of the signed agreement.

As for procedure by which the arbitration will be conducted, the arbitration agreement may set out the entire procedure agreed upon, or may simply include a commitment by the parties that detailed procedure for the arbitration will be discussed and settled later between them, with such involvement of the arbitrator as may be useful or necessary, and that the terms then reached as to procedure for the arbitration will be recorded in a writing that will be deemed to be part of the arbitration agreement. More information on deciding arbitral procedure is set out below under the heading "survey & determination of procedure".

A timetable for the arbitration cannot usefully be created until the procedure is decided upon, but it works the same way: if arbitral procedure has already been agreed upon, the timetable can be included in the arbitration agreement itself; otherwise, a commitment that the parties will negotiate it later will be included in the agreement, with a provision that the timetable ultimately reached will be recorded in a writing that will be deemed to be part of the arbitration agreement.

•  survey & determination of procedure:

Apart from those provisions of the Act that are mandatory, the Act gives considerable leeway to parties who wish to design a "custom" process for their arbitration — but parties should be aware that the Act also operates as a default. Should the parties fail to provide for any procedural aspect of the arbitration that is left to them to decide, the Act will come into play to provide for that issue. Some parties may be content with the procedure outlined by the Act, and may simply permit it to govern their case in its entirety by default. Others may create a procedure that is partly their own and partly as provided by the Act, either expressly or by default. But parties with particular procedural requirements must be mindful of the default aspect of the Act and ensure that their agreement contains any special procedural provisions that differ from what the Act would otherwise provide by default.

As discussed in the "arbitration agreement" section, above, procedure for the arbitration can form part of the arbitration agreement when it is made, or it can be the subject of later discussions which the parties agree to undertake, in which event their ultimate agreement as to procedure will be recorded in a separate writing that is deemed to be part of the arbitration agreement. In either case, I am available to the parties as a resource, and/or I may participate in the discussions, as the parties prefer or as may be required. Finally, if the parties cannot agree upon a procedural issue, I will decide the procedural issue between them.

The following are examples of procedural issues the parties might wish to consider:

• Can the arbitration be conducted entirely in writing?
• Is there to be a live hearing of the arbitration, like a trial?
• Could the hearing be hybrid - part live, part writing?
• If any part of the hearing is to be live, what is the most convenient & economic place to convene it?
• Is there to be pre-hearing questioning of the parties, like discovery in a litigation case?
• Is there to be an exchange of "will-say" statements as to the evidence of party and/or non-party witnesses?
• What provisions should be made as to production of documents?
• Will there be any expert witnesses?
• Are the parties in agreement on some facts that could be stipulated in writing? Some documents that could be jointly admitted?
• Should provision be made for attendance at a relevant site?
• Are the any issues for accommodation (eg., translation, ensuring access, serious medical issues)?

If I am involved in this process as arbitrator, I manage it by canvassing with counsel in detail as to their procedural preferences for every step. I also canvass for time estimates at each step. I encourage counsel to consult with one another as they consider my questions, in the hope that some or all of the procedural steps can be agreed upon between them.

Once I have their responses, I determine the areas in which they are agreement, and the areas in which their responses differ, if any. After hearing from them by telephone as to any such differences, I decide the steps in dispute and finalize the procedure for the arbitration. The procedure for the arbitration is then either incorporated into the arbitration agreement itself as it is drawn, or recorded later in a writing that is deemed to be part of the arbitration agreement, as discussed above.

•  setting the timetable:

Once the arbitration procedure has been set, I use counsels' time estimates to negotiate a timetable for the arbitration. If any disputes arise as to timing, I will decide them after consultation with the parties. I then prepare a timetable that is served on all parties, which is deemed thereafter to be part of the arbitration agreement.

•  my undertaking & terms:

In consideration of appointment as arbitrator, once I receive the signed arbitration agreement, I provide the parties with a written undertaking to serve as arbitrator, in a document that also sets out the terms on which I act, including -

• the powers created in me;
• my obligations of neutrality and confidentiality;
• a provision preserving my ownership of my notes; and
• provisions as to fees and my obligations to account for the retainers paid by the parties.

A copy of this document as I prepared it in a commercial case can be reviewed at the side tab "My Undertaking & Terms", above.

•  facilities for hearing of the arbitration:

These concerns do not arise if the parties have agreed to conduct the arbitration entirely in writing, but in cases in which there is to be live hearing of the arbitration, in full or in part, arrangements must be made for premises for that hearing.

I have no premises of my own to make available, and I do not get involved in making such arrangements - this is left to counsel.

A typical arrangement would be facilities comprised of one hearing room large enough to accommodate a spacious working table for me and for counsel for each party, as well as a table for the use of the witnesses. Extra care may be required in accommodating any access issues or special needs with respect to privacy, etc.

In addition to the hearing room, I require the use of a separate room to which I may withdraw during breaks and in order to review the case, study and write. No special features are required in connection with this room, except that it be reserved exclusively for my use throughout the hearing. Counsel may wish to have separate rooms of their own, which I leave to them.

If there is to be a Court reporter present taking a transcript, counsel must cooperate in the booking and payment of the reporter.

Once the hearing date has been fixed, counsel for the parties will book the necessary facilities, and arrange that all invoices be forwarded to them, directly, without my involvement in either the arrangements or the billing.

If counsel are unable to agree on the particulars of any of these arrangements, I will decide the issue.

•  service of materials for arbitration:

•  offers to settle:

The parties may agree not to contract out of the operation of s.54(4) of the Ontario Arbitration Act, 1991, as to offers to settle, which will permit them to make offers to settle for leverage with respect to costs, just as in a civil suit.

•  awards & supplementary awards:

My usual practice is to deliver my Award with respect to all issues submitted for arbitration within 30 days of the parties' final submissions, whether written or oral.

Pursuant to s.38(1) of the Ontario Arbitration Act, 1991, the Award is required to be made in writing, with reasons, unless it is made on consent of the parties.

In my Award on the issues, I typically direct that the parties make further submissions as to interest, costs, and any formal offers to settle that may be in place, stipulating the time or times within which such submissions are to be delivered.

I typically release a Supplementary Award as to interest, costs and the effect of any offers to settle, in writing and with reasons, within 7 days of receipt of the parties' submissions on these issues.