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Eight ways to make commercial arbitration efficient

BY JACOB MUTEVEDZI

To escape astronomical litigation budgets and crowded courts, parties often crave a quicker, more economical and more effective way to settle their commercial disputes.  Properly handled, commercial arbitration can provide a swifter, more flexible, and cheaper alternative to court litigation. Arbitration, if handled by inexperienced persons however, can easily become a fool’s errand.  Yet there are numerous practical steps which, if assiduously applied, can 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 rung of the arbitral process.

Get experienced lawyers

One of the main reasons why people opt for arbitration is its vaunted economy and efficiency. Yet the twin benefits of being economical and efficient are often forfeited when parties appoint inexperienced lawyers to represent them in arbitral proceedings. Less experienced lawyers usually unnecessarily apply time-wasting litigation processes. While there is no doubt that both arbitration and litigation are adversarial proceedings, fundamental differences exist between the two. Appreciating these differences is climacteric to the cost- effective presentation of a case.

Attorneys who lack training in the ways of arbitration have a tendency to treat arbitration in the same manner 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 pitfalls, it is important to conduct due diligence or even ask counsel if they have experience in handling arbitral hearings.

Choose the right arbitrator

Time should be devoted to a thorough background check with a view to appointing an arbitrator with the right expertise, personality and experience. It has often been said that every arbitration award is made by a human being, or a panel of them, each with his or her own backgrounds and experiences. It is, therefore, surprising that parties pay little or no attention to this kind of due diligence. The process of appointing an arbitrator starts right at the point when parties draft an arbitration clause. It is at that point that parties should ask themselves, for example, if they want their future dispute to be resolved by an actuary, a lawyer or an accountant. It is important to conduct research on arbitrators’ biographies and 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.

Attend the preliminary hearing

It is important to attend the preliminary conference. This initial hearing affords you an opportunity to figure out the arbitrator, ascertain the other party’s position and contribute to the development of the schedule. The pre-arbitration hearing presents the first opportunity for the parties to present their positions to the arbitrator and discuss a case schedule. It is absolutely not true that only lawyers are supposed to attend; clients are entitled to turn up at these preparatory meetings.

Curtail discovery to what is necessary

Discovery of evidentiary documents should be limited to what is necessary. Discovery costs often comprise the biggest 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 confined to what is reasonable. However, even if there is no such clause, it is in both parties’ best interests 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.

Limits on hearings

Arguably, arbitral hearings constitute the most costly part of arbitral proceedings. This cost can be significantly reduced if the parties set reasonable limits on the scope or duration of hearings in their arbitration agreements. Restrictions of this nature may encourage the parties to bring only the witnesses and testimony most relevant to the settlement of the dispute. 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.

Stick to a budget

A cost-benefit or return-on-investment analysis is critical in deciding whether or not to pursue arbitral proceedings. 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.

Be professional and efficient

Lawyers play an important part in ensuring that the arbitral hearing is completed as efficiently as possible. It is prudent to impose time limits. Bundles of evidence should be indexed and paginated and copies must be availed 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 shun unnecessary sparring with lawyers during cross-examination.

Stick 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. Generalized pleas for fairness or equity rarely impress the arbitrator.

Conclusion

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

  • Jacob Mutevedzi is a commercial lawyer and arbitration practitioner. He can be contacted on jmutevedzi@gmail.com, on Twitter @jmutevedzi_ADR and on +263775987784. He writes in his personal capacity.

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