NYSBA SPRING 2018 | VOL. 11 | NO.

New York Dispute

Resolution Lawyer
A publication of the Dispute Resolution Section
of the New York State Bar Association

www.nysba.org/DRS
Message from the Chair
It is always a pleasure to look through with ComFed a regular Spring feature but
New York Dispute Resolution Lawyer. It also to develop closer ties with ComFed so
continues to be a great credit to the Section, as to expand the exchange of ideas and ben-
for which we are all very grateful to Edna efits between the Sections. We are trying to
Sussman, Laura Kaster and Sherman Kahn bring advocates and neutrals together more
who have tirelessly edited it for so many often so that they can benefit from common
years. I am especially pleased to emphasize exchanges and a better understanding of
their work this year because we are looking their respective roles. As a potentially very
forward to a further step which will be to important part of that effort, an outstand-
collect many of the best articles from the ing working group composed of advocates,
publication, which, like the Section, is in its in-house counsel and neutrals, coordinated
tenth year, and to publish them in a single by our Chair-Elect, Debbie Masucci, is
volume. Efforts are under way to review working on a new training program for
the great writing that has been provided advocates in mediation. Both ComFed and
over the years and to compile a timely the Corporate Counsel Section are joining
collection. Daniel Kolb us in that effort. We hope to roll out that new
program in 2018.
In addition to reflecting on how outstanding the pa-
pers in this publication have been over the last 10 years, Another important initiative is to increase the benefits
I think this is an appropriate time to recognize what an of the Section to those living upstate. There have been
extraordinary job has been done by those who brought very significant advances in ADR upstate in recent years
our Section into existence 10 years ago and have so that reflect its importance there, but members upstate
ably developed its offerings to members. Starting with have not had as many opportunities as they should to
the Section’s first Chair, Simeon Baum, those who have benefit from Section offerings. To address that shortfall,
served as Chair before me and those who have chaired we have begun a program of webinars that will benefit
the many committees and activities of the Section have members throughout the state, with two in the Fall and
made it exceptionally successful. Due to their work the two in the Spring. We expect to provide a webcast of our
Section’s benefits include its continually successful Fall Spring Program with ComFed so that it will be available
and Annual Programs; very interesting committee meet- throughout the state. We are increasing cooperation with
ings, including guest speakers and important initiatives the CLE office of the State Bar to develop multiple live
such as our numerous diversity programs, diversity programs upstate, and we are taking steps to draw from
scholarships and rule and legislative recommendations; upstate members recommendations of additional ways in
outstanding training programs in both Arbitration and which we can improve the Section’s offerings for them.
Mediation; the very successful annual Fall Arbitration
Consistent with the better use of webinars and
Moot Competition among the State’s major law schools;
webcasts, we are also in the process of significantly en-
a national writing competition inaugurated in 2017; and
hancing use of social media, including both Twitter and
the recent addition of the Resolution Roundtable blog
Linked-In, to improve communication and outreach.
permitting significant exchanges on important dispute
resolution issues and this great publication. One need My hat is off to those who have brought the Dispute
only go to a committee meeting or program to appreci- Resolution Section to where it is and I very much look
ate the vitality of the Section. forward to the work of the Chairs who follow me who
will, I am sure, be superb stewards for a Section of which
This year we have added still more to the list of
we should all be proud.
Section activities and initiatives. In the spring of 2017
we joined with the Commercial and Federal Litigation
(ComFed) Section for a very successful program. We Dan Kolb
are now moving not only to make such a joint program

2 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 Table of Contents
Page
Message from the Chair .............................................................................................................................2
(Daniel Kolb)
Message from the Co-Editors-in-Chief ....................................................................................................5
(Edna Sussman, Laura A. Kaster and Sherman Kahn)

Ethical Compass
Acts Like a Lawyer, Talks Like a Lawyer...Non-Lawyer Advocates Representing Parties
in Dispute Resolution ............................................................................................................................7
(Professor Elayne E. Greenberg)

Arbitration
Summary of Report of the New York City Bar on Awards of Interest in International
Commercial Arbitration ....................................................................................................................... 11
(Thomas Childs)

Mediation
Business Essentials for Neutrals: Starting, Growing, and Sustaining Your Practice .......................14
(Reginald A. Holmes and Merriann M. Panarella)

Automatic Court-Annexed Mediation in New York’s Federal District Courts—Sometimes

Numbers Don’t Lie ...............................................................................................................................21
(Gary Shaffer)

International
M&A Arbitration and Expedited Procedures: A Need for Speed? ....................................................25
(Alejandro López Ortiz)

Globalizing Trends in Ascertaining the Content of the Applicable Law in International

Arbitration—Beyond the Civil-Common Law Divide ....................................................................28
(Mohamed S. Abdel Wahab)

Multilingual Arbitrations: Optimizing Parties’ Agreements, Scope, Costs, Award-Making .........31

(Guido Carducci)

(continued on page 4)

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 3
 Special Feature: Artificial Intelligence and New Arbitration Data Sources
Artificial Intelligence Challenges and Opportunities for International Arbitration .......................35
(Kathleen Paisley and Edna Sussman)

Arbitrator Intelligence: From Institution to Data in Arbitrator Appointments ...............................41

(Catherine A. Rogers)

A Data-Driven Exploration of Arbitration as a Settlement Tool: Does Reality Match

Perception? ............................................................................................................................................45
(Brian Canada, Debi Slate and Bill Slate)

The Unusual Suspects—Easier to Find With GAR’s ART ...................................................................49

(David Samuels)

Book Reviews
The College of Commercial Arbitrators Guide to Best Practices in Commercial Litigation—Taking
a Test Drive Down the Highways and By-Ways of Best Practices (4th Edition) ..................................55
(Reviewed by Simeon H. Baum)
ADR Advocacy, Strategies, and Practices for Intellectual Property and Technology Cases
(Second Edition) ....................................................................................................................................58
(Reviewed by Joseph P. Zammit)

The Roles of Psychology in International Arbitration.................................................................................61

(Reviewed by Jane Wessel and Ben Pilbrow)

Award-Winning Student Papers

Med-Arb: How to Mitigate the Risk of Setting Aside or Refusal of Recognition and
Enforcement of a Med-Arb Award .....................................................................................................64
(Sarah Benzidi)
The Past, Present and Future of the Doctrine of ‘Manifest Disregard’..............................................77
(Carl Mudd)

Section Committees and Chairs ..............................................................................................................87

The Dispute Resolution Section Welcomes New Members ................................................................88

Section Officers and Editors ....................................................................................................................90

4 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
Message from the Co-Editors-in-Chief
This expanded issue reflects some new efforts
by our Section. It includes two award-winning
student papers that are longer than our typical ar-
ticles. Lela Love, Director of the Kukin Program for
Conflict Resolution at Benjamin N. Cardozo Law
School, describes the competition that led to these
papers and the awards as follows:
On the evening of October 26, 2017, at New
York Law School, after the annual confer-
ence of the New York State Bar Association
(NYSBA) Dispute Resolution Section, the
winners of the 2017 National Champion-
Edna Sussman Sherman Kahn Laura A. Kaster
ship ADR Law Student Writing Competi-
tion were honored. Sara Benzidi, the winner of the
grand prize ($10,000), flew in from Belgium for the scholarships to encourage greater opportunities for
ceremony. Sara completed her LL.M at Harvard Law women and minorities;
School this past academic year, and winning the
2. Diversity Mentorship Program: This new program
competition was the crown on her year. Her champi-
will provide training, support, and connections to as-
onship paper was titled “How to Mitigate the Risk of
sist women and minorities to become active partici-
Setting Aside or Refusal of Recognition and Enforce-
pants in ADR;
ment of a Med-Arb Award.” Carl Mudd of Brooklyn
Law School won the $1,000 New York Competition 3. Call for diverse speakers, panelists and writers: We
with his paper, “The Past, Present and Future of the seek to expand opportunities for women and mi-
Doctrine of ‘Manifest Disregard.’” norities to demonstrate their skills and expertise by
providing them with greater exposure;
John Wilkinson, who led the NYSBA Dispute Reso-
lution Section’s participation in the competition, 4. Symposium on Diversity in Dispute Resolution:
described the organization of the competition, a col- Each year the Diversity Committee offers a program
laboration between the NYSBA DR Section and the focused on how to break through. This year, the
American College of Civil Trial Mediators (ACCTM); Committee held a Symposium on February 26 focus-
the careful and difficult judging process by 16 ing on solutions to this pernicious problem by learn-
judges; and the 55 entries. He said that the quality of ing about the successes of experts in a wide range of
all the papers was remarkable. industries;
These articles are published in this issue. 5. Dispute Resolution Clinic: This new clinic develops
the skills of law students and new lawyers to repre-
In addition to our traditional Ethics column by Elayne
sent parties who would otherwise be unrepresented
Greenberg and the usual arbitration, mediation, inter-
in mediation and arbitration proceedings. The clinic
national, case notes, and book review topics, this issue
starts with a training seminar and includes experi-
includes a special section on Artificial Intelligence and
enced advocates as mentors;
New Arbitration Data Sources. Artificial Intelligence is up-
ending many areas, including valuation for the purpose of 7. Arbitration Moot: 2018 will be the fourth year that
settlement and mediation. With respect to New Arbitration the Section, the American Arbitration Association,
Data Sources, in arbitration, the argument can be made the New York International Arbitration Center, and
that the greater the available information on arbitrators, the Chartered Institute of Arbitrators will sponsor a
the more likely that parties and counsel will select arbitra- moot in which law students at New York region law
tors who are not just “the usual suspects.” We always at- schools compete as advocates for parties in a mock
tempt to bring you information from the field that suggests arbitration; and
new trends and ideas.
8. Writing Competition: As discussed above, our writ-
From its inception, our Section has been engaged in ing competition resulted in the two stellar articles
addressing the diversity issues that face our profession published here.
and has supported and encouraged equality in our dispute
resolution field. The Section is committed to providing In the upcoming year, the Section will expand activi-
opportunities and developing skills of women, minorities, ties by establishing a Task Force to examine what else can
law students, and young lawyers and to increasing their be done to break barriers for women and minorities in the
representation in our Section. field. We hope you will join us in making all of this happen.

Some of the Section’s efforts include: Our Section and this publication continue to be in the
forefront of our profession and we hope you will become an
1. Diversity Scholarship: For the second year, the Sec- active participant in our efforts.
tion is offering five mediation and five arbitration

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 5
 N E W Y O R K S TAT E B A R A S S O C I AT I O N

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 Ethical Compass
Acts Like a Lawyer, Talks Like a Lawyer…Non-Lawyer
Advocates Representing Parties in Dispute Resolution
By Professor Elayne E. Greenberg

The Ethical Issue:

Professor Elayne
What are the ethical implications for lawyer media-
E. Greenberg is Assis-
tors, arbitrators and dispute resolution providers when
tant Dean for Dispute
the lines between the roles of lawyers and the non-lawyers
Resolution, Professor
who are representing clients in dispute resolution become of Legal Practice and
blurry? Traditionally, non-lawyer advocates (hereinafter Director of the Hugh
NARs) have represented clients in the negotiations, me- L. Carey Center for
diation and arbitration of legal matters without cause for Dispute Resolution
concern. Yes, labor union representatives, sports agents, at St. John’s School
and special education advocates are three familiar exam- of Law. Please send
ples of non-lawyers who represent clients in negotiations, your comments to her
mediations and arbitrations, informing clients of their about this topic at greenbee@stjohns.edu.
legal rights. Routinely, the lawyers and neutrals presid-
ing over the dispute resolution procedure have warmly
welcomed these non-lawyers, viewing these non-lawyers
as valued participants who provide their clients beneficial procedures by “employing inappropriate business prac-
subject matter expertise to help resolve the legal dispute at tices,” and some NAR firms posted photos of settlement
hand. However, that welcome has now turned tepid and checks in violation of confidentiality agreement to help
tentative as FINRA and its neutrals question the ethics of market the firm’s value.3
some of those non-lawyers who are representing clients in In response to these complaints, on October 18, 2017
FINRA arbitration. FINRA issued regulatory notice 17–34 inviting FINRA
forum users to comment on their experiences with NAR
The Immediate Problem That Re-ignited the firms.4 In this notice, FINRA acknowledged that although
Controversy some NAR firms offer a valuable service to some ag-
grieved investors, NAR firms are unregulated.5 FINRA
The FINRA Codes of Arbitration and Mediation Pro-
also recognized the impact of any restrictions on NAR
cedures provides in relevant part that parties in securities
firms will ultimately have a cost and benefit to investors.6
arbitrations and mediations may be represented by NAR
For example, although the implementation of practice
so long as such representation does not conflict with state
restriction on NAR firms might serve to protect aggrieved
law proscribing such representation.1 Thus, pursuant to
investors from the cost of NAR firms’ misconduct, these
the FINRA code, aggrieved investors have opted to be
restrictions might also serve to incentivize aggrieved in-
represented in their settlement talks and dispute resolu-
vestors to instead retain lawyers at an additional expense.7
tion procedures not only by lawyers but also by family,
friends, law school clinics and NAR firms. NAR firms
have proliferated, ostensibly to offer public investors an The Broader Ethical Issue
alternative representation to lawyers in FINRA securities The FINRA-NAR issue is actually a reflection of a
mediations and arbitration. broader problem: How do we ensure access to justice for
all? For many, the escalating costs of retaining lawyers
However, FINRA had been receiving complaints from
presents a barrier in their quest to access justice. In lieu
lawyers and neutrals who question the ethics of a small
of lawyers, some are seeking a more affordable alterna-
number of these NAR firms and have requested that FIN-
tive and are turning to NARs. As one familiar example,
RA take steps to address these concerns.2 Included among
the New York Unified Court System provides funding to
the complaints of unethical behavior were allegations that
Community Mediation Centers who use NARs to provide
some NAR firms required the aggrieved investor to sign a
those unrepresented with legal advice.8 Some embrace the
retainer agreement to pay the firm a $25,000 non-refund-
use of NARs in this context while others argue that NARs
able fee for representation; some NAR firms advocated
are just providing basement justice for the have-nots.
frivolous or stale claims as leverage to elicit settlements;
some NAR firms have misused FINRA dispute resolution

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 7
 Adding to the challenge of this problem, there is no (a) A lawyer shall not practice law in a jurisdiction in
consensus on whether lawyer representation as opposed violation of the regulation of the legal profession in
to representation by NARs will actually provide individ- that jurisdiction. (b) A lawyer shall not aid a non-
uals with a better outcome. It may be a fantasy that any lawyer in the unauthorized practice of law.16
lawyer will provide the client with a better outcome than
However Rule 5.5 does not help the lawyer media-
a NAR. Our respected colleague Jean Sternlight states
tor and arbitrator differentiate between permitted subject
that whether legal representation is actually a benefit
matter support and the unauthorized practice of law.
compared to NAR representation is not easily proven by
the research.9 Sternlight notes, and this author agrees, For this writer, New York Rule 2.4, Lawyer Serving as
that all legal counsel is not alike. While we have great Third-Party Neutral reinforces a practice boundary that
pride in observing skilled lawyers advance their clients’ may be tested when there is a NAR supporting a party in
interests, we have also cringed when observing lawyers mediation or arbitration. Explicitly Rule 2.4 provides that:
who do not know the law and misguide their clients to
unfortunate outcomes. (a) A lawyer serves as a “third-party neutral” when
the lawyer assists two or more persons who are
Another respected colleague, Sarah Cole, looks at the not clients of the lawyer to reach a resolution of
access to justice issue from a different vantage point and a dispute or other matter that has arisen between
provokes us to consider whether there are some types them. Service as a third-party neutral may include
of cases where NAR representation is actually the un- service as an arbitrator, a mediator or in such other
authorized practice of law and should not be allowed.10 capacity as will enable the lawyer to assist the par-
Cole explains that during the past three decades arbitra- ties to resolve the matter. (b) A lawyer serving as a
tion practice has evolved and is now used to resolve an third-party neutral shall inform unrepresented par-
increasing number of statutory claims.11 While arbitra- ties that the lawyer is not representing them. When
tion was initially created to resolve routine contractual the lawyer knows or reasonably should know that
business disputes by applying business customs and a party does not understand the lawyer’s role in
norms, now arbitration is also used to resolve statutory the matter, the lawyer shall explain the difference
claims by applying the law.12 Cole asserts that whether or between the lawyer’s role as a third-party neutral
not we classify the representation clients by non-lawyers and a lawyer’s role as one who represents a client.
in statutory arbitrations as the unauthorized practice of
law, clients need lawyers to represent them in the arbitra- This rule recognizes the mistaken belief held by
tion of these statutory claims to protect these clients from many unrepresented participants that their arbitrator or
harm.13 mediator who is also a lawyer, despite statements to the
contrary, will protect the unrepresented participant from
legal harm or mistakes. Two for the price of one.
The Ethical Codes Maintain the Blurry Lines
This rule also reminds lawyers serving as a neutral
How should lawyer arbitrators and mediators ethi-
of their ethical obligation to remain anchored in their
cally respond to non-lawyer advocates who represent
neutral role, and not be pulled to take a more legal rep-
parties in mediation or arbitration? Lawyer mediators
resentational role by providing legal advice to an unrep-
and arbitrators may turn to both the New York Rules of
resented party. However, practicing lawyer mediators
Professional Conduct and the relevant neutral ethical
and arbitrators often confess how challenging it is not to
codes for guidance and still remain unsure of how to pro-
correct an unrepresented parties’ faulty legal reasoning.
ceed ethically. These ethical codes don’t explicitly clarify
Moreover, lawyer arbitrators and mediators find them-
what constitutes the unethical practice of law, or advise
selves in an ethical quagmire when lawyers representing
neutrals about what to do when a neutral believes that
parties just got the relevant law wrong. Might this chal-
a NAR has crossed the blurry line into the unauthorized
lenge for lawyer mediators and arbitrators be exacerbated
practice of law. For example, the ethical codes for media-
when parties are represented by NARs? Depending on
tors14 and arbitrators15 explicitly advise that neutrals
the lawyer mediator and arbitrator, the neutral might feel
should uphold the integrity of their respective dispute
even more pulled to provide legal advice if the neutral
resolution procedures. Are arbitrators and mediators up-
doesn’t consider NAR as a representative or if the NAR
holding the integrity of the process if they encourage or
gets the law wrong.
discourage the participation of NAR? Should NAR par-
ticipation be permitted in some disputes and not others? Some readers may be more dizzied after reading
these rules and remain unsure about how to proceed if a
We could also look at New York Rule 5.5 that ad-
NAR is engaging in the unauthorized practice of law in a
dresses unauthorized practice of law. Rule 5.5 explicitly
dispute resolution procedure in which you are a neutral.
provides that:
You are not alone. However, we can always take solace
in the knowledge that neutrals always retain the right

8 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
to withdraw from a dispute resolution procedure if the
neutral does not believe they can carry on their neutral
role. For some, the right to withdraw is a welcome escape
hatch. For others, the right to withdraw is a punt that
NYSBA’s
fails to address the more nuanced issue: how should
neutrals ethically proceed when a party is represented by
CLE On-Demand
a NAR?
Bringing CLE to you...
Conclusion
As I write this column, I am coming to the sobering
when and where you want it!
reality that this problem raises questions with no simple
answers. This topic calls into question whether we truly
believe in the clients’ right to self-determination in which
they are free to choose their own representative when Select from hundreds of
participating in a dispute resolution procedure or wheth-
er we adopt a more maternalistic stance, believing clients NYSBA CLE Video/Audio
need to be protected when selecting a representative.
We are also forced to confront the limitations of access to
On-Demand Courses
justice for all and the remedies we are willing to support
to right this egregious wrong. Yes, this problem is also www.nysba.org/cleonline
entrenched in the politics of maintaining the exclusivity
of the legal profession. Ultimately, however, this issue
forces us to personally consider as lawyer mediators and Our online on-demand courses combine
arbitrators what it means to us to maintain a dispute streaming video or audio with MP3 or MP4
resolution procedure of integrity. download options that allow you to down-
load the recorded program and complete
your MCLE requirements on the go.
Endnotes Includes:
1. See http://www.finra.org/sites/default/files/Regulatory-
Notice-17-34.pdf. • Closed-captioning for your convenience.
2. Id.
3. Id. • Downloadable course materials CLE acces-
4. Id. The deadline for the comment period was December 18, 2017. sible 24 hours a day, 7 days a week.
5. Id.
6. Id. • Access CLE programs 24 hours a day,
7. Id.
7 days a week.
8. https://www.nycourts.gov/ip/adr/cdrc.shtml.
9. Jean R. Sternlight, Lawyerless Dispute Resolution: Rethinking a
Paradigm, 37 Fordham Urban L. J. at 391 (2009).
10. Sarah Rudolph Cole, Blurred Lines: Are Non-Attorneys Who
Represent Parties in Arbitrations Involving Statutory Claims Practicing
Law?, 48 U. of Calif. Davis 921 (2015).
11. Id. at 925.
12. Id.
13. Id. at 960.
14. https://www.americanbar.org/content/dam/aba/
migrated/2011_build/dispute_resolution/model_standards_
conduct_april2007.authcheckdam.pdf.
15. https://www.americanbar.org/content/dam/aba/migrated/
dispute/commercial_disputes.authcheckdam.pdf.
16. NY Rules of Professional Conduct Rule 5.5 (2017) at http://www.
nycourts.gov/rules/jointappellate/ny-rules-prof-conduct-1200.
pdf.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 9
 N E W Y O R K S TAT E B A R A S S O C I AT I O N

As a New York State Bar Association member you recognize

the value and relevance of NYSBA membership.
For that, we say thank you.

Your commitment as members has made NYSBA the largest voluntary state
bar association in the country. You keep us vibrant and help make us a strong,
effective voice for the profession.

Sharon Stern Gerstman Pamela McDevitt

President Executive Director

10 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 Arbitration
Summary of Report of the New York City Bar on Awards
of Interest in International Commercial Arbitration
By Thomas Childs

Time is money, and resolving a dispute through to the award of interest in international arbitration. Third,
international commercial arbitration can take years. Sec- New York State’s Appellate Departments have held that
tions 5001, 5002 and 5004 of the New York Civil Practice the CPLR provisions do not necessarily apply to domestic
Law and Rules (CPLR) mandate that the New York arbitration and that an arbitral tribunal’s decision on this
courts award prejudgment interest, at an annual rate of question is not subject to review by the courts.3 Fourth,
9 percent and on a simple-interest basis, upon any sum the award of nine percent simple interest in accordance
awarded for breach of contract. One question that often with the CPLR provisions may materially overcompen-
arises in international commercial arbitrations governed sate or undercompensate the prevailing party for the loss
by New York substantive law and seated in New York of use of its funds.
is whether arbitrators must or should apply the CPLR’s
prejudgment interest provisions to the determination of
pre-award or post-award interest. Party Choice: Contractual Stipulations and
Arbitration Rules
The absence of any commentary on this important
The question whether international arbitrators must
and recurring question prompted the International Com-
or should apply the CPLR’s prejudgment interest provi-
mercial Disputes Committee (ICDC) of the New York
sions may not even arise if the parties’ contract or the
City Bar Association to address it in a detailed report
arbitration rules chosen by the parties contain provisions
published in June 2017 (the “City Bar Report” or “Re-
regarding the award of interest.
port”).1 This article is intended to provide a brief over-
view of the City Bar Report.2 Often, the parties’ contract will contain a “late pay-
ment” clause or other similar type of clause stipulating
how interest is to be assessed on amounts past due under
Bottom Line the contract. If the losing party’s breach consisted of a
The City Bar Report concludes that, in the absence of failure to make or a delay in making a required payment
express party agreement on the award of interest, inter- under the contract, it would generally be appropriate for
national arbitrators have discretion to apply or not to arbitrators to apply a late payment clause to the assess-
apply the CPLR’s prejudgment interest provisions to the ment of pre-award and post-award interest. On the other
determination of pre-award and post-award interest in an hand, arbitrators should exercise caution in deciding
international commercial arbitration governed by New whether to grant interest in accordance with a late pay-
York substantive law and seated in New York. Arbitrators ment clause if the losing party’s breach did not involve
may choose to determine interest in accordance with the non-payment or late payment.
CPLR provisions if (by way of example) evidence exists
that the parties intended the statutory prejudgment inter- If the parties’ contract does not contain a stipulation
est rate to apply, or no case is made in favor of applying governing the assessment of interest on any damages
a different rate, or the choice of interest rate would not awarded, the arbitrators should look to the arbitration
have a significant economic impact one way or the other. rules chosen by the parties for any provisions regarding
Moreover, if both parties argue that the CPLR provisions the award of interest. The rules of several leading arbitral
govern their respective claims for interest, a tribunal institutions, including the American Arbitration Associa-
could reasonably infer agreement between the parties tion’s International Centre for Dispute Resolution (ICDR),
that the statutory rate applies in their arbitration. the London Court of International Arbitration, and the
Singapore International Arbitration Centre, grant arbitra-
On the other hand, arbitrators may choose to deter- tors discretion to award such interest as they consider
mine pre-award and post-award interest based on com- appropriate.4 By contrast, the UNCITRAL Arbitration
mercial considerations and without regard for the CPLR’s Rules and the rules of several other leading institutions,
prejudgment interest provisions, for several reasons. including the International Chamber of Commerce and
First, the CPLR provisions contain numerous terms indi- the Hong Kong International Arbitration Centre, are
cating that they are intended to apply to court proceed- silent with respect to the award of interest.
ings, not arbitration. Second, the legislative history of the
provisions indicates that the New York State Legislature In view of the frequent use of the ICDR International
adopted a fixed nine percent prejudgment interest rate in Arbitration Rules in international commercial arbitra-
part for reasons not directly related to the compensatory tions governed by New York substantive law and seated
purpose of an interest award and not necessarily relevant in New York, the City Bar Report addresses the require-

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 11
ment under ICDR Article 31(4) that the tribunal “tak[e] • A district court should award prejudgment inter-
into consideration the contract and the applicable law(s)” est at the market rate, because interest at this rate
in exercising its discretion to award interest under this “puts both parties in the position they would have
article. The Report concludes that ICDR Article 31(4) al- occupied had compensation been paid promptly.”
lows an arbitral tribunal, in the exercise of its discretion,
to determine pre-award and post-award interest wholly • The market rate is “the minimum appropriate rate
or partially in accordance with statutory prejudgment for prejudgment interest, because the involuntary
interest provisions (such as the CPLR provisions) ap- creditor [i.e., the prevailing party] might have
plicable to court judgments under the law governing the charged more to make a loan.”
parties’ contract. On the other hand, a tribunal would • The most relevant market rate is the rate “the [los-
also have discretion to award interest under ICDR Article ing party] must pay for money” because (1) by not
31(4) based exclusively on commercial considerations immediately compensating the prevailing party
and without any regard for the CPLR provisions. for its harm, the losing party in effect forced the
prevailing party to make a loan equal in value to
its harm and (2) the losing party’s borrowing rate
New York Substantive Law
reflects (among other things) the risk of its non-
The City Bar Report takes the view that, in the payment of this loan.
absence of any contractual stipulation or arbitration rule
governing the assessment of interest, international arbi- • A district court need not try to determine the ac-
trators should generally determine interest in accordance tual rate that the losing party must pay to borrow
with the substantive law governing the parties’ contract, money. If the court chooses not to engage in such
because interest is an element of complete compensation “refined rate-setting,” it should award prejudgment
for a claim. interest at the U.S. prime rate.8
State and federal courts have found the CPLR’s Similarly, the Second Circuit Court of Appeals has
prejudgment interest provisions to be substantive for held that the district courts may award prejudgment in-
choice-of-law and Erie purposes.5 Whether the CPLR terest at a rate that “reflects the borrowing cost of money,
provisions apply in arbitration does not turn, however, if measured for example by the average prime rate or ad-
on whether they are characterized as substantive or pro- justed prime rate.”9 Alternatively, the district courts may
cedural for purposes of determining their applicability in award interest at a short-term, risk-free rate.10
state or federal court. Rather, the key question is whether
Economists differ as to how interest should be calcu-
the CPLR provisions are directed to the determination of
lated in order to compensate the prevailing party for the
interest not only by a court, but also by arbitrators.
loss of use of money it was entitled to receive from the
As explained above, the City Bar Report concludes date its claim arose until the date of the award.11 It will
that the CPLR’s prejudgment interest provisions are not generally be up to the parties in the arbitration to argue
binding on international arbitrators, who have discretion to the arbitral tribunal what rate is appropriate in the
to determine interest based wholly or partially on com- particular circumstances of their dispute.
mercial considerations.6 This conclusion follows from the
text of the CPLR provisions, their legislative history, and
the decisions of New York state courts reviewing arbitra- Post-Judgment Interest
tors’ awards of interest in domestic arbitrations governed “Post-award” interest ordered by an arbitral tribunal
by New York substantive law. only accrues until the date of a U.S. federal or state court
judgment enforcing the award, because the debt created
by the award is deemed to merge into the judgment un-
Guidelines for the Exercise of Discretion in der the merger doctrine prevailing in the United States.12
Awarding Interest Interest on the judgment, or “post-judgment interest,” is
How should international arbitrators exercise the dis- separately determined in accordance with the law of the
cretion they possess with respect to the determination of enforcement forum. The only way that parties can over-
pre-award and post-award interest in international com- ride the general merger rule is to use “clear, unambigu-
mercial arbitrations governed by New York substantive ous, and unequivocal” language in their contract indicat-
law and seated in New York? Guidelines developed by ing that interest will accrue at the specified rate after the
the federal courts of appeals for the awarding of prejudg- entry of judgment.13 Where the parties have agreed to a
ment interest by the district courts in federal question broad arbitration clause, the question whether they have
and admiralty cases may provide useful guidance for sufficiently contracted for their own post-judgment rate is
international arbitrators. a determination reserved for the arbitral tribunal.14

The Seventh Circuit Court of Appeals set forth per-

haps the clearest and most comprehensive guidelines in Survey of Arbitral and Court Decisions
In re Oil Spill by the Amoco Cadiz.7 In a per curiam opinion, The City Bar Report includes appendices summariz-
Chief Judge Bauer and Judges Easterbrook and Fairchild ing (a) pre-award and post-award interest determinations
held that:

12 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
of arbitral tribunals in approximately 45 international 2015); Rothermel v. Fidelity & Guarantee Ins. Underwriters, Inc., 721
commercial arbitrations governed by New York sub- N.Y.S.2d 565, 566 (3d Dep’t 2001).
stantive law, and (b) New York federal and state court 4. ICDR International Arbitration Rules, Art. 31(4); LCIA Arbitration
Rules, Art. 26.4; SIAC Arbitration Rules, Art. 32.9.
decisions reviewing arbitral awards of interest in interna-
tional and domestic arbitrations governed by New York 5. See, e.g., Davenport v. Webb, 11 N.Y.2d 392, 394-95 (1962); Schwimmer
v. Allstate Ins. Co., 176 F.3d 648, 650 (2d Cir. 1999).
substantive law. These summaries indicate that arbitra-
tors grant pre-award interest to the prevailing party as a 6. The City Bar Report is expressly limited to international
arbitration out of consideration for the scope of the ICDC’s
matter of course and sometimes also grant post-award, mandate. However, in surveying New York case law and all
prejudgment interest, but that uncertainty exists with arbitral awards that could be located, no cases or awards were
respect to the criteria that they should apply in determin- found to support a principled distinction between international
ing interest. The City Bar Report may serve to enhance and domestic arbitration on the questions addressed in the Report.
consistency and predictability in the analysis underpin- 7. See In re Oil Spill by the Amoco Cadiz, 954 F.2d 1279, 1331-35 (7th Cir.
ning arbitral awards of interest in cases governed by New 1992).
York substantive law. 8. See id.
9. Mentor Insurance Company (U.K.) Ltd. v. Norges Brannkasse, 996 F.2d
506, 520 (2d Cir. 1993).
Endnotes 10. Id.
1. See Awards of Interest in International Commercial 11. See Aaron Dolgoff & Tiago Duarte-Silva, Prejudgment Interest: An
Arbitration: New York Law and Practice, Report of the Economic Review of Alternative Approaches, 33(1) J. Int’l Arb. 99
Committee on International Commercial Disputes of the New (2016).
York City Bar Association, June 21, 2017, available at http://bit.
ly/2tMcyPB (accessed on December 6, 2017). 12. See, e.g., Marine Mgmt, Inc. v. Seco Mgmt., Inc., 574 N.Y.S.2d 207,
208 (2d Dep’t 1991), aff’d, 80 N.Y.2d 886 (1992); Westinghouse Credit
2. The author of this article served as chair of the drafting Corp. v. D’Urso, 371 F.3d 96, 102 (2d Cir. 2004).
subcommittee. The drafting team included ICDC Chair Richard
L. Mattiaccio and subcommittee members James H. Carter, Louis 13. See, e.g., Marine Mgmt, 574 N.Y.S.2d at 208; Westinghouse, 371 F.3d
Epstein, Grant A. Hanessian, Louis B. Kimmelman, Joseph E. at 102.
Neuhaus, Peter J. Pettibone, John V.H. Pierce, Linda J. Silberman, 14. Tricon Energy Ltd. v. Vinmar Int’l, Ltd., 718 F.3d 448, 457 (5th Cir.
Robert H. Smit, and Jami M. Vibbert. The City Bar Report includes 2013).
appendices that summarize the relevant New York case law
and arbitral awards located in the course of extensive research
supported by associates and summer associates at the law firms Tom Childs, TChilds@KSLAW.com, is counsel in
of several ICDC members. The research covered New York state
and federal case law reviewing arbitral awards of interest in both
the New York office of King & Spalding LLP, concen-
international and domestic arbitrations governed by New York trating in international arbitration and litigation. He
substantive law. is admitted to the New York bar and as a solicitor of
3. See, e.g., Penco Fabrics, Inc. v. Bogopulsky, Inc., 146 N.Y.S.2d 514, 515 England and Wales and holds an advanced degree in
(1st Dep’t 1955); Dermigny v. Harper, 6 N.Y.S.3d 561, 562 (2d Dep’t private international law from the University of Paris 1.

N E W Y O R K S TAT E B A R A S S O C I AT I O N

Request for Articles

If you have written an article you would like
considered for publication, or have an idea for one,
please contact the Co-Editors-in-Chief:
Laura A. Kaster Sherman W. Kahn
Laura A. Kaster LLC Mauriel Kapouytian Woods LLP
84 Heather Lane 27 West 24th Street, Suite 302
Princeton, NJ 08540 New York, NY 10010
laura.kaster@gmail.com skahn@mkwllp.com

Edna Sussman
SussmanADR
20 Oak Lane
Scarsdale, NY 10583
esussman@sussmanadr.com

Articles should be submitted in electronic document format

(pdfs are NOT acceptable), along with biographical information.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 13
 Mediation
Business Essentials for Neutrals:
Starting, Growing, and Sustaining Your Practice
By Reginald A. Holmes and Merriann M. Panarella
Introduction: the focus of this article. While the reader should ideally
Congratulations! You are or have decided to consider have some basic knowledge and work experience in the
a career as a neutral. And whether you are or intend- DR field, anyone looking to enter the profession will also
ing to ply your trade in the commercial world or in the benefit greatly from the insights presented here.
community, pro bono or non-profit space, the felicitation Our arc through this material will begin with a dis-
stands. Few professions provide such a consistently rich cussion of the business realities that should be considered
platform for pursuing a life of Tikkun Olam.1 However, by any prospective neutral before entering the profession.
unless you master the business essentials necessary for We will then discuss the business essentials and the prac-
a financially successful neutral practice, you will likely tical considerations that should be a part of any practitio-
stumble over obstacles that will derail all your lofty ‘bet- ner’s plan for business success.
ter the world’ goals.
After that, we provide insight, strategies, and best
Fortunately, a knowledge of the business essentials practices for starting, marketing, and growing your
that will permit you to pursue your desire to do all of neutral practice. We will also touch upon servicing your
the good you wish to do as a neutral and still do well caseload and sustaining your earned success. Addition-
enough to support yourself and your family are not deep ally, we will explore the unique considerations, concerns,
dark, mysterious, or indecipherable secrets. Indeed, the obstacles, and opportunities that often confront diverse
approaches, strategies, and tactics best calculated to neutrals. Penultimately, we will discuss the quality of
establish a financially successful neutral practice are well life factors for neutral. Finally, we offer our observations
known to savvy legal services marketers, DR service pro- about the future of the DR industry. Will it be bright and
viders, and successful neutrals. The authors, independent growing or dark and declining?
and successful neutrals in their own right, have distilled
these approaches, strategies, and tactics, updated them
for the current industry landscape, and combined all The Business Realities of Being a Neutral
of that with their decades of professional observations, Anyone exposed to the lengthy, expensive, and inflex-
experiences and knowledge. The results of those efforts ible court system often thinks that there has to be a better
are summarized and shared in this article. The objective way to resolve disputes. After some experience with DR
of this article is to better equip you with the perspectives, processes, many are hooked and start seriously consid-
education, and skills you will need to successfully start, ering whether being a neutral is something they could
grow, and sustain your neutral practice and of course to either do full time or when they retire. If you are one of
aid you in doing all of the good you are called to do. Our these people, before jumping in it’s good to have a sense
earnest desire is to help you do well while doing good. of the business realities neutrals face including the basics
of supply and demand, what work is out there and how
Let’s start our journey through this material with
many are hoping to obtain it?
the definition of a few terms. First, let’s describe the
“DR industry.” The DR industry is a multi-billion dollar Both anecdotally and statistically, mediation work is
industry consisting of any private entity or person that growing. Mediation work increases as litigation grows.
provides services focused on the resolution of disputes According to U. S. District Court statistics, total cases filed
outside of the public courts. The field is broad enough from 2015-2016 rose 4.6 percent.2 In 2016, parties filed
to encompass not just arbitrators, mediators and the like 291,851 complaints in U.S. District Courts. According to
but also service providers, professional and trade as- this barometer, disputes for potential mediations exist and
sociations, educators, settlement counsel, and law firms are growing in many areas.
and suppliers.
Moreover, corporations have embraced mediation as
This article will utilize the term “neutral” to refer to a way of controlling costs and resolving matters expedi-
any person who works or engages a process to resolve tiously. A 2011 study stated:, “today corporate experi-
disputes, conflicts, or disagreements between parties ence with mediation is virtually universal. Ninety-eight
without representing either of the parties and while percent of respondents indicated that their company had
acting impartially. Neutrals who offer their services for used mediation at least once in the prior three years, a
money and adhere to a professional code of conduct are ten percent jump from the 1997 figure.”3 Although recent

14 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
accredited studies are difficult to locate, anecdotal reports international arbitration because the awards are gener-
and observations by the AAA, CPR and IMI suggest that ally enforceable under the New York Convention. In the
the use of mediation has continued to grow at a similar American Arbitration Association’s B2B Dispute Resolu-
pace though 2017. Gone are the days when a suggestion tion Impact Report, in 2015, 8,360 domestic and interna-
to try mediation in stalled negotiations is deemed a sign tional business cases were filed with transportation, com-
of a weak case by opposing counsel. mercial insurance, entertainment/media, and pharma/
biotech cases significantly up over 2014.6
Given these statistics, the number of potential me-
diations should be growing. Courts also encourage the As with mediation, it appears that there are more ar-
parties to mediate, which is admirable, However, many bitrators than disputes. Arbitrators have tended to be ho-
jurisdictions offer mediation to the parties for free, thus mogeneous and primarily white, male and older individ-
decreasing the cases available for professional mediators. uals. Efforts are under way by most service providers to
For example, the Ninth Circuit provides free mediation to encourage parties to choose diverse and women neutrals.
litigants because the process helps resolve disputes quick- Research the panels you are able to join in your jurisdic-
ly and efficiently; the Circuit has eight paid full-time me- tion, the number of arbitrators on those panels and the
diators on its staff for this purpose.4 In the U. S. District number of cases available so you can plan accordingly.
Court in Boston, the Magistrate Judges have taken over
the mediation program so there is no cost to the parties.
Preliminary Preparation
Many other courts also offer court-connected mediation
of one type or another, so knowing what programs are To become a competent neutral, your preparatory
available at the local, state, and federal level will provide steps should include taking a self-inventory, engaging in
more information on the demand side. necessary training and then advanced and specialty train-
ing, affiliating with relevant organizations, and exploring
On the supply side, as mediation has caught on, apprenticeship and mentoring opportunities.
many lawyers find it an appealing process for dispute
resolution. From semi-retired lawyers and judges who Why conduct a self-inventory? Earning a living as a
merely desire to keep their toe in the legal waters, to neutral is nuanced and starting a full-time practice will
those who aspire to build a practice, more people seek be challenging. Before investing the necessary time and
to mediate disputes than there are disputes. Again, case energy to develop a practice, it is useful to consider your
availability may well depend on whether there are court- professional objectives, background and experience, tem-
connected matters in the local jurisdiction that funnel perament, and perspective.
cases to a volunteer court-connected panel or to a panel Regarding professional goals, is this a full-time en-
of pre-qualified mediators. deavor, a part-time exploration, or an avocation? Be clear
Domestic commercial arbitration has not fared quite on both the time and energy you are willing to devote to
as well. According to the 2011 study referenced above, your practice and what you expect to achieve profession-
while companies recounted using mediation for nearly ally. A consideration of relevant background and experi-
all kinds of disputes, fewer are using arbitration in key ence up front will help direct both your training and later
categories; “[s]ubstantial drops were reported in the marketing efforts. You don’t need to be a lawyer to be a
number of companies reporting arbitration usage in com- mediator or arbitrator in many fields, but you do need to
mercial/contract disputes (from 85% in 1997 to 62.3% in be known and respected in your industry. While neutrals
2011)….”5 As was the case with mediation, more recent vary in their substantive areas of expertise, to practice at
validated studies on the growth of the use of arbitration the highest level a neutral should have the right tempera-
are difficult to locate. However, anecdotal reports and ob- ment for the task at hand. For most neutral activities, this
servations from the AAA, the world’s largest provider of means the ability to actively listen, be patient, withhold
arbitration services, and others suggest that the use and quick judgments, and have a high emotional IQ. Former
demand for domestic commercial arbitration services has litigators need to leave advocacy behind, and retired
remained relatively flat through 2017. Arbitration, which judges need to recognize that mediation and arbitration
historically has been an efficient, cost-effective, and flex- are flexible processes determined by the parties’ needs,
ible adjudication process, may have suffered from an not theirs. Finally, a neutral, by definition, must, in fact,
importation of litigation processes in recent years. Most be neutral and impartial to their very core.
service providers have revised their rules and encour- Prospective neutrals should ask two fundamental
aged arbitrators on their panels to manage their matters questions: 1) Am I right for the neutral profession? and
as cost-effectively as possible, with the hope that arbitra- 2) Is the neutral profession right for me? If you answer
tion will again become a preferred adjudicatory method one question in the negative, save yourself a lot of time,
for the resolution of business disputes. money, and heartache and consider another line of profes-
On the other hand, international arbitrations appear sional work. However, if you answer yes to both, apply
to be on the rise and are likely to continue to grow as the principles and suggestions in this article and move
global commerce increases. Also, parties are attracted to forward with the establishment of your practice.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 15
 Generally, there are no state or federal requirements might consider joining include the American Intellectual
for mediation training although you should check the Property Law Association, the American Health Lawyers
law of the state where you want to practice. In Massa- Association, the National Employment Lawyers Asso-
chusetts, for example, while there’s no ‘“formal” train- ciation and, if applicable, the Association of Corporate
ing requirement, in order to enjoy the statutory protec- Counsel. In the international sphere, you might consider
tion of confidentiality accorded a mediator, you must the Chartered Institute of Arbitrators, which provides
have at least 30 hours of training in addition to other both training and credentialing, and the International Bar
requirements.7 Also, most panels that you seek to join Association.
do have basic training requirements. For example, the
Finally, an apprenticeship or mentor can provide
AAA requires “the completion of at least 24 total hours
enormous assistance when starting out. Several organi-
of training in mediation process skills….”And, in New
zations have apprenticeship opportunities such as the
York, mediators who wish to serve on court rosters must
AAA’s Higginbotham Program, and the ICC’s Young
have taken at least 40 hours of mediation training.8 The
Arbitrator’s Forum for those under 40 years old. Many
safest course is to take one of the many 40-hour media-
court-connected mediation programs offer training,
tion programs offered by law schools, bar associations,
observation, and apprenticeship opportunities as well.
private practitioners, and service providers.9 The ABA
If you are able, we strongly encourage you to find an
maintains on its website a list of ADR Training Providers
experienced DR practitioner who is willing to mentor you
organized by state.10
and allow you to observe mediations or arbitrations. Such
Regarding arbitration, there are again, generally, no experience would be invaluable.
state or federal licensing or training requirements. Basic
training in arbitration case management is highly recom-
Starting Your Practice
mended, especially for those with little experience in
arbitration. Arbitration, while adjudicatory, is not litiga- Once you have affirmatively answered all the gate-
tion. Attending courses will also increase your chances way questions and completed the preliminary work to
of getting on prestigious panels as you will be asked become a neutral, you have set the stage to start your
on panel applications to list your DR training. Again, practice. What do you do next? First, determine whether
arbitration courses are widely offered by law schools, bar you intend to pursue your neutral career as an avocation,
associations, private practitioners, and service providers. a business, or a calling. Your answer will have important
implications as to how you start your practice.
Advanced and specialty training helps sharpen your
skills, enhance your credentials, and demonstrates your If for example, you want to pursue “neutraling” as
expertise in substantive areas. The World Intellectual an avocation, you can achieve that objective by creating a
Property Organization (WIPO) offers a Workshop for relationship with a service provider that will give you oc-
Mediators in Intellectual Property Disputes as well as casional cases. If you choose this route your capital, time
arbitration training, and the American Health Lawyers commitment, and marketing effort requirement should be
Association offers both mediation and arbitration train- minimal. The business essential here for you is to focus on
ing tailored to health law disputes. Depending on your finding, defining, and forging a satisfactory relationship
area of concentration, you will be able to find advanced with a source of cases. Thereafter, to sustain that relation-
courses. Also, after you have received “basic” training, ship you must service those cases promptly, cost-effec-
attending an “advanced institute” not only satisfies CLE tively, and fairly with due regard for the financial interest
requirements but introduces you to new ways to resolve of your service provider. This option is appropriate for
issues. and popular with (and sometimes uniquely available to)
retired judges.
Affiliation with professional organizations and bar
associations provides opportunities to further enhance If, on the other hand, you are pursuing your neutral
your expertise as well as network with colleagues. practice as a business that will be used to support you
Regarding bar associations, many have robust dispute and/or your family, you must ask and answer a few more
resolution sections with active committees in different preliminary questions. Among them are these:
types of dispute resolution as well as specialty areas. 1) Are you financially prepared for the likely initial
For example, the ABA has a Dispute Resolution Section (and sometimes permanent) drop in income that
that hosts an annual conference and has committees that often occasions the start-up of a neutral practice?
focus on mediation, arbitration, conciliation and ombuds,
as well as employment, health, international and intellec- 2) Do you possess the passion, drive, and willingness
tual property, among others. Similar the NYSBA has an to commit the copious amounts of energy required
active Dispute Resolution Section with excellent pro- to power up a new neutral practice in today’s cli-
grams, webinars, and conferences. The list of potential mate?
professional associations is limited only by your desired
3) Will your physical and mental health permit you to
subject matter focus and imagination. A few that you
do what you must do to have a successful practice?

16 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 4) Do you possess or can you develop the necessary so consider your cash flow needs over a comfortable
reputation for being successful in your area of period of time for you.
focus? A solid reputation is a crucial characteristic
Your business plan should also include basic start-
of financially successful neutrals.
up necessities such as creating a new resume, and bio,
If and only if the above questions are answered in obtaining business cards, using social media, and devel-
the affirmative should you proceed to start your practice oping a contact list. As you begin, take a look at what
with the possibility that you will be able to earn a full- past experience you can leverage to create a DR resume.
time income from it. Spend time and thought on this exercise as it will inform
both your website, your LinkedIn account should you
If you are pursuing your neutral practice in response choose to have one, and the short bios you use for speak-
to a calling (as is the case with the authors) you will have ing and writing. Also, obtain business cards early on.
even more in-depth questions to ask. Is this really what Many vendors offer inexpensive options such as Vistap-
you want to do or is it just a potential escape from the rint and Staples. Moo claims to offer “Uniquely premium
demands of your current professional focus? In what Business Cards for everyone.” So have fun with the look
ways do you feel that being a neutral will provide the sat- of what you will present to the people that you meet.
isfying work you are called to do? Proceed to start your
practice when you have a realistic sense of your attraction A website is no longer a luxury for practitioners,
to the profession. Can you add this to your other legal it is a necessity. To get started, research the websites of
work rather than jump in to an exclusive practice? neutrals you know and neutrals whose practices you
seek to emulate. Ask other neutrals or sole practitioners
Whether you approach starting your practice as an what web designers they used. Consider whether you
avocation, business, or calling, you will be well served to want or need a search engine optimization consultant to
conceive, structure, and write out a business plan as to maximize your exposure. Find a professional photogra-
how you intend to achieve your goals. Creating a writ- pher for your headshot and aim for a picture that reflects
ten business plan for your prospective neutral practice is confidence, as well as your personality. Consider whether
a critical factor that should not be ignored. See it as the you want a blog associated with your website for post-
roadmap to take you from where you are to the success- ing your own newsletters or a discussion of recent cases.
ful neutral practice that you are seeking to establish. Your And, strive to keep your website updated. As you speak,
journey may be long, complicated, and difficult. Don’t write, teach, and gain experience, it should all be reflected
leave home without your map. on your website.
What should be in your business plan? Consider ad- While a website is essential, there is a divergence of
dressing areas including finances, basic business start-up opinion on the use of other forms of social media. The use
necessities, and panel affiliations. Among the financial of Facebook, for example, raises the question of whether
matters you will want to reflect on are hourly/daily rates, your “friends” might create conflicts if they are related to
billing practices, anticipated expenses, and cash flow. the parties or counsel in an arbitration before you.
When you start to think about what you want to charge,
you should research the going rates in your region for Many neutrals do maintain a LinkedIn page which
those with experience commensurate to yours. Often, allows them to post links to articles they have written as
neutrals beginning a practice believe that if they price well as provide notice of presentations they are planning.
their services lower relative to others, they will attract However, they neither solicit nor accept endorsements to
more business. Paradoxically, this strategy may backfire avoid creating a future conflict.
as DR users may view the lower rate as indicative of a
In leveraging your prior experience in your new DR
lower level of quality. Once you establish your pricing
endeavor, use your former contact list to keep in touch
structure, determine what billing practices you plan on
with colleagues and acquaintances. And, as you engage
using. Some neutrals use tools such as Clio.com while
in the DR community, keep your contact list up to date.
others just create timesheet and invoice templates which
they use to bill clients on a monthly basis. Whatever you Your business plan should also include your research
decide to do, record the time you spend on your matters on the service provider panels with which you seek to
on a daily basis to ensure accuracy and completeness. associate yourself. These panels, especially in the case of
arbitration, can be an important source of cases. On the
There are potentially endless expenses when starting
mediation front, look for local panels including court-
a DR practice, so your business plan should reflect your
connected rosters. While the latter may require volunteer
view of what you need to do and your priorities. Budget
services for all or part of mediations, they are often an
for necessary training, conferences, subscription agree-
excellent opportunity to gain experience. If you can find
ments, panel and bar association fees, office or virtual
the opportunity, mediate with others. As an arbitrator,
office expenses, website creation and maintenance, and
look into the panels available for your level of experience.
public relations, marketing, or other consultants. In the
FINRA, the Financial Industry Regulatory Authority,
beginning, your expenses will likely exceed your income,

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 17
has an arbitration panel with relatively low barriers to make presentations, whether in person or by webinar, and
entry and provides free online training, an online exam, seek opportunities to do so. Use social media including,
and distributes arbitrators names to potential parties by as mentioned earlier, a website which you keep updated,
random computer allocation. Other panels such as the and a LinkedIn account on which you post your speak-
AAA and CPR require substantially more experience and ing engagements and links to your articles. Once you
credentials. If you aspire to be on a panel, understand have decided upon the organization affiliations that make
their requirements and plan accordingly. sense given your focus, get out and attend meetings and
network with others in your chosen field. The idea is for
Writing out a business plan, whether detailed or people to think of you when an appropriate case comes
simple, will help you organize your thoughts, drill down their way. Let your light shine brightly. Finally, try to le-
on your finances, and prioritize your approach to starting verage what you do. Can you turn a paper you researched
your practice. into a presentation? How can you repurpose your efforts
to maximize your results?
Marketing Your Practice
At the outset, you may want to consider volunteer-
Now that you have the start of a business plan, the ing to gain experience. Many regional courts have court-
next component of your plan will be a written marketing connected mediation programs that provide mediators to
strategy. Depending on your style, a written marketing parties at no cost. Volunteering can help hone your skills,
plan may include publicizing your new focus, pitching introduce you to other local mediators or arbitrators, and
your business, choosing a marketing approach, increas- provide references for you down the road.
ing and maintaining your DR visibility, joining organiza-
tions relevant to your marketing approach, volunteer- Marketing with others is not only useful but fun and
ing, marketing with others, and ethical considerations. provides each of you with an opportunity to tout the
Diverse and women neutrals may have unique issues other’s accomplishments. Find a presentation partner or
that also should be addressed. someone with whom you can co-author an article, with
the result that you both have the marketing visibility but
After all the work you’ve done, now is NOT the time half of the work otherwise involved. Everyone appreci-
to be shy and retiring. Announce your new DR focus ates being recognized, so look for opportunities to reward
enthusiastically to you contact list. Consider writing a colleagues, to recommend other neutrals when appropri-
short article to include with your announcement. Decide ate, and to work to increase the number of cases available
how you want to pitch your business—what makes you to all.
uniquely situated to be the parties’ best choice for their
dispute? Marketing a neutral practice presents a bit of a conun-
drum and a few ethical considerations. As a neutral, you
Most experienced neutrals are process management have disclosure responsibilities to the parties to ensure
experts. Many believe that expertise in the subject mat- your impartiality. As an arbitrator, it is particularly impor-
ter of the mediation or arbitration before them is not as tant that your “conflict awareness radar” is up and run-
important as their process management skills. However, ning at all times. The viability of your award depends on
it’s better to go narrow and deep rather than shallow avoidance of partiality or even the appearance of it. If you
and wide. While you may be able to handle a variety of market your neutral services to a law firm and shortly
disputes, and may over time, start with a niche that re- after that are chosen by that firm as an arbitrator, you will
sults organically from your experience and background. need to disclose the contacts that you had. Avoid situa-
You can choose a specialty practice such as employment, tions, to the extent that you can, that will create conflicts
health, intellectual property, environmental or family or disclosable events.
law. One well-respected mediator focuses on disputes
involving animals. Also decide on what services within While everyone wants to promote themselves in the
the DR field you will be offering: mediation, arbitration, best possible light, be careful to honestly describe your
conciliation, special discovery master, eDiscovery master, experience and background. Parties and counsel are more
etc. Finally, think about where you will focus your prac- closely scrutinizing the experience and background claims
tice geographically. While sticking to the deep/narrow of neutrals and there are indications that they are increas-
initial focus, look at where your work is likely to come ingly willing to take action or even sue when misrepre-
from and plan accordingly. sentations are discovered or suspected.11 Such claims of
misrepresentation could be devastating, if not fatal, to any
Visibility is critical to any successful marketing effort. effort to develop a neutral practice. Honesty and integrity
Many bar associations publish newsletters and welcome are not only essential components of a personal marketing
articles so submit a paper in your chosen area of exper- plan but are also critical to maintaining the public’s trust
tise. DR presentations also offer opportunities for people in the neutral profession.
to hear you talk authoritatively. Consider organizing and
moderating a panel on a subject and inviting others with Here are a few considerations for diverse and women
more experience to speak. Indicate your willingness to neutral in marketing their practices. Diverse/women

18 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
neutrals may undervalue their skill set and services, be- For arbitrators, service providers can act as a buffer
lieve that they need far more experience than is required, between the arbitrator and counsel as well as provide
and set their rates at too low a level. Underestimating financial case management services, handle administra-
one’s services or skill set may lead to overdoing pro bono tive matters, and resolve arbitrator challenges. If parties
work. Diverse/women neutrals may also experience contact you directly with an ad hoc matter, consider
being viewed as either overly aggressive or too timid. informing them that it is your preference to work with
Awareness and humor can dispel any awkward encoun- the AAA or CPR. In the event the parties opt not to have
ters. Finally, rather than divisive competition, diverse/ an administered arbitration, the AAA, for example, of-
women neutrals will gain much by working together to fers À La Carte Services, which allows the parties and
expand the use of ADR and shared opportunities in the arbitrators to choose the services needed, including Case
field. A rising diverse tide lifts all diverse boats. Financial Administrative Services and Arbitrator Chal-
lenge Review Procedures, among others.
With active patience, persistence and the artful use of
technology, marketing your neutral practice can be both
energizing, satisfying, and rewarding. Growing and Sustaining Your Practice
While starting and growing a neutral practice may
Servicing and Supporting Your Caseload be difficult, sustaining your success may be even harder.
If starting and building your practice is comparable to an
Once you are up and running, how can you best ser- airplane taking off and reaching cruising altitude, then
vice and maintain your caseload? To begin with, continue maintaining your practice can be compared to maintain-
to work closely with service providers. Service providers ing a stable altitude. The key to achieving a sustained
and case managers can be instrumental for a smoothly practice is finding a pace that provides the level of income
functioning arbitration. A mutually respectful relation- and satisfaction that you seek while demanding no more
ship with a case manager will inure to your benefit. Case energy and expenses then you wish to expend.
managers often have an early read on counsel; they are
service provider insiders and experts, and can, while not Here are the keys to sustaining a successful practice:
affecting your ultimate responsibility as the arbitrator,
1) Stabilize your organizational structure—Lock in
help you look good. In addition, sometimes case manag-
the personnel structure that helped you achieve
ers help decide who will be on lists provided to parties.
your prior success. Maintain your service provider
Be aware that the way that you treat them has a direct
relationships as well as other relationships that
bearing on your success.
provide your pipeline of cases and assist you in the
Next, use technology to maximize your efficiency. servicing your cases. Never take any relationship
You will need a robust conflicts program that includes for granted, always express gratitude for the values
not only the parties but also the lawyers and experts. that both of you bring to your joint enterprise.
Create a file management system that will allow you to
2) Service all of your cases to the best of your abilities.
organize and find documents relevant to your arbitration
Exceed the standard expectations of all stakehold-
or mediation matter quickly. For example, you may want
ers (parties, attorneys, case managers, witnesses,
to create a folder for each arbitration and include within
that folder subfolders for pleadings, orders, exhibits, time etc). Make working with you an exceptional profes-
sheets, and invoices. You may also have a folder with sional experience. Measure your success by wheth-
arbitration templates containing a preliminary hearing er and how often those with cases return to you.
checklist, a pre-hearing order, confidentiality agree- 3) Maintain your visibility to the people, organiza-
ments, subpoenas, time sheets or other documents you tions, and professional associations that are sources
find yourself using regularly. If you choose to maintain of your work. Be disciplined (and kind) about
your files electronically, which most do, be sure to back weeding out of your professional life those as-
up your system with cloud storage such as Backblaze, sociations that drain your time, energy, morale,
Carbonite, or iDrive. resources and provide you little in return. Writing,
Many arbitrators use iPads or tablets to maintain speaking, and service engagements with organiza-
files, take notes, and otherwise manage arbitrations. Tools tions can be useful (and sometimes fun ways) of
such as Documents by Riddle allow you to keep all your maintaining your visibility.
documents in one place by accessing Drop Box, Google 4) Continue to engage and use social and virtual me-
Drive files, Box, or other cloud storage. PDF Expert al- dia. They provide excellent platforms for generat-
lows you to edit PDFs as text documents. One Note by ing visibility that work even when you are sleep-
Microsoft offers note taking capabilities as does Good- ing. But caution is in order. Injudicious use of social
Notes 4, which provides searchable notes. Depending on media can create conflicts, or the appearance of
your style and priorities, there are many more tools to conflicts, by demonstrating or suggesting relation-
help you service and maintain your caseload.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 19
 ships that will bar you from or complicate your efficiently as possible and ultimately to grow and sustain
ability to take cases. your practice. And don’t forget to enjoy your practice and
your life; in other words, have fun!
5) Continue to engage in professional and personal
activity that gives you joy. Action that lifts your
spirits or gives you energy and a sense of satisfac- Endnotes
tion and fulfillment will provide the necessary fuel 1. Tikkun Olam is an ancient Hebrew term which in contemporary
to power you forward in achieving all of your life’s use refers to the duty of each human to work for universal justice,
peace and the betterment of the world. The authors use the term
mission (including your professional ones). After here for its secular richness and not in its strict religious meaning.
all, sustaining yourself is the sine qua non of sup-
2. See Table C-2A U.S. District Courts-Civil Cases Commenced by
porting your practice. Nature of Suit; http://www.uscourts.gov/sites/default/files/
data_tables/jb_c2a_0930.2016.pdf.

The Future of the DR Industry 3. See Thomas J Stipanawich and J. Ryan Lamare, Living with ADR:
Evolving Perceptions and Use of Mediation, Arbitration, and Conflict
Dispute resolution’s future likely includes both Management in Fortune 1000 Corporations, 19 Harvard Neg. Law
growth in the number of cases and an evolution of pro- Rev. 1, 41.
cesses to catch disputes before they arise and to resolve 4. See https://www.ca9.uscourts.gov/mediation/.
those matters that do happen at the earliest possible time. 5. Stipanawich and Lamare, supra note 3, at 46.
DR practitioners are likely to continue to grow in num- 6. See American Arbitration Association,” B2B Dispute Resolution
bers as well with increased emphasis on encouraging the Impact Report, Key Statistics,” p. 3.
parties to use diverse and women neutrals. It remains to 7. See M.G.L. c. 233 Sec. 23c.
be seen whether the growth in the number of neutrals 8. See Part 146 of the Rules of the Chief Administrative Judge,
and the size and importance of cases being committed NyCourts.gov.
to DR will lead to any licensing and/or certification 9. For example, the Program on Negotiation at Harvard Law School
requirements. offers a five-day course on mediating disputes as well as advanced
mediation training. And the Straus Institute for Dispute Resolution
The industry is expected to continue to evolve both of Pepperdine School of Law offers many mediation trainings both
incorporating older practices with “twists” like med- for those starting out and for those seeking specialized training.
arb12 or arb-med13 and settlement negotiations or varia- 10. https://www.americanbar.org/groups/dispute_resolution/
tions on these themes and creating new approaches to resources/adr_training_providers.html.
satisfy the parties’ needs. 11. JAMS, Inc. v. Superior Court of San Diego (Kensella), No.D069862 —
Cal.RPtr.3d —, 2016 WL4014068 (Ct. App. Jul 27, 2017).
Regarding newer approaches, neutrals and par- 12. A process in which a mediator serves as an arbitrator if the matter
ties are working to use DR processes that work in one is not settled.
industry, such as alliance managers in the pharmaceuti-
13. See Edna Sussman, Developing an Effective Med-Arb/Arb-Med Process,
cal industry who work to spot problems before they lead NYSBA New York Dispute Resolution Lawyer, Spring 2009, Vol. 2,
to project failure, to other industries. The AAA offers No. 1.
Judicial Settlement Conferences mirroring those offered A process in which an arbitrator attempts to settle a matter before
14.
by federal and state courts. Neutrals offer deal facilita- her.
tion services for negotiations that have hit a wall. And,
a promising new development is the Arbitration Settle- Reginald A. Holmes is an arbitrator/mediator with a
ment Conference14 in which the arbitrators, with deep multinational practice in the IP, employment and inter-
knowledge of the dispute before them and consent of the national areas. He has offices in Los Angeles, Chicago
parties, conduct settlement conferences. and New York. You may connect with him at rholmes@
theholmeslawfirm.com, 646.416.8141 or at
Conclusion www.theholmeslawfirm.com.
Achieving business success as a neutral involves tak- Merriann M. Panarella is an arbitrator and mediator
ing a dispassionate look at a passionate vocation. Once with offices in Boston and New York. She is a Fellow of
you have decided that this is the profession for you, dive the CIArb, a member of the AAA, CPR, WIPO and other
on in. Do your research regarding necessary training, DR panels, and on the Silicon Valley Arbitration and
and associate yourself with organizations that will both Mediation Tech List. You may connect with her at
support your practice, allow you to meet other neutrals, mpanarella@panarellaADR.com or at
and provide cutting edge programs. Work on creating www.panarellaADR.com.
the best business plan that you can, with an eye toward
not only the business essentials but also how you work
and what you need to thrive. Take every opportunity to
market your practice and increase your visibility while
having your conflict radar awareness engaged. Use all
the resources at your disposal to service your caseload as

20 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
Automatic Court-Annexed Mediation in New York’s
Federal District Courts—Sometimes Numbers Don’t Lie
By Gary Shaffer

On the surface, it might seem that a court automati- refer to the chance of settlement. And for good reason. As
cally sending cases to mediation is an oxymoron. Self-de- many attorneys and litigants who have participated in a
termination—including deciding whether to mediate—is mediation know, mediations can narrow issues, expedi-
often thought of as an essential aspect of the mediation tiously work through discovery, and begin the foundation
process. However, it turns out that, at least for the media- for settlement talks even for cases that do not actually
tion programs operated by New York’s Federal District settle at mediation. They can be very productive.
Courts, automatically sending cases to mediation, or in
The Western District program was initially estab-
one revealing instance arbitration, is quite successful in
lished as a pilot program and renewed each year until,
resolving large numbers of cases with little court input or
due to its overwhelming success, was made permanent
oversight. This article will provide an overview of—and
in 2010. In 2012, the court expanded the program’s reach
more important the data relating to—the court-annexed
to include those cases in the Western District’s Rochester
mediation programs in those courts.
courthouse.
New York has four district courts, the Western,
How successful is the program? Of the 3,011 cases
Northern, Southern, and Eastern Districts. Each of those
that entered the program through 2014, 2,360 were settled
courts maintains data relating to their court annexed me-
either before the mediation, at the mediation, or within 60
diation programs and the data shows that where a court
days following the mediation. In other words, 78% of the
rule requires that cases be sent directly to mediation,
cases that went to the program were resolved with almost
50 percent or more of those cases typically get resolved
no court involvement.4
through the mediation process. I will first address the
Western and Northern Districts, then the Southern, and
lastly the Eastern District. The reason for this is that in Northern District of New York
2006 the Western District, largely through the efforts of Recognizing the enormous success of the Western
then Chief Judge William Skretny, enacted a far-reaching District’s program, the Northern District of New York
mediation program whereby almost all civil cases went implemented an almost identical pilot program begin-
directly to mediation. The program was so successful, ning January 1, 2014. That program, too, was so successful
that in 2014 the Northern District adopted almost the that it was made permanent through General Order No.
identical program. The Southern District has had an auto- 47 issued on May 23, 2016. 5 On the surface, the Northern
matic mediation program that has steadily, and success- District’s success rate does not appear as high as that of
fully, expanded over the past several years, and while the the Western District’s. According to the raw data, the
Eastern District has yet to adopt an automatic mediation Northern District success rate is only 36 percent.6 How-
program it has some interesting data that reveals the far- ever, the Northern District’s “success rate” includes only
reaching potential of court-annexed programs. those cases that actually settle at a mediation session. It
does not include those cases that settle either before a me-
Western District of New York diation or within 60 days thereafter. While it is unknown
what the precise success rate would be if those figures
In 2006 the Western District of New York in Buffalo
were included, data from other court annexed mediation
became the first district court in New York to establish
programs—the Western District and the Central District
mediation as the default process to be followed in almost
of California—suggest there is every reason to think the
all civil cases. As Section 2.1 of the Court’s ADR Plan
Northern District success rate would be at least in the 50
states, “All civil cases filed on or after the Effective Date
percent range if such information were included in its
of the ADR Plan shall be referred automatically to ADR.”1
results.7
That section also sets forth some limited exceptions to
the rule, such as habeas corpus and extraordinary writs, One subtle but interesting aspect of the Northern Dis-
bankruptcy and Social Security appeals, cases implicating trict program is that it is entitled “Mandatory Mediation
issues of public policy, exclusively or predominantly, etc.2 Program.” There has been understandable caution in the
The Plan has an opt-out provision, though it stresses that ADR world to use the word “mandatory” when referring
motions to opt-out will only be granted for good cause to mediation. It smacks of coercion rather than self-
shown. “Inconvenience, travel costs, attorney fees, or oth- determination. However, the Northern District seems to
er costs shall not constitute ‘good cause’ and a movant to have taken the bull by the horns and been direct about its
opt out must explain why ADR ‘has no reasonable chance approach. However, regardless of terminology, it may be
of being productive.’”3 The use of the word “productive” useful to state the obvious: mandatory mediation does not
establishes an interesting criterion. The rule does not

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 21
mean mandatory settlement. A case that does not settle in Eastern District of New York
mediation continues in court, and most automatic court The Eastern District of New York has both a court
mediation programs require only that a party attend one annexed mediation program and a court annexed arbi-
mediation session of two to four hours. This makes the tration program. As compared to the three other District
success rates even more remarkable. Court programs, only the arbitration program is compul-
sory. Mediations take place when referred by a judge or
Southern District of New York magistrate. The EDNY Alternative Dispute Resolution
Report for the period July 1, 2015—June 30, 2016 reports
The Southern District program is narrower than
the following results:14
either the Western or Northern District programs. In
2011, the Southern District program began automatically EDNY Mediation Program
sending to mediation counseled employment discrimina-
During the period of July 1, 2015 to June 30, 2016, 221
tion cases, and cases against the City of New York, or its
cases were referred to the mediation program. Of those,
employees, alleging the use of excessive force, false ar-
mediation was completed in 149 cases. Of the cases where
rest, or malicious prosecution by employees of the NYPD
mediation was completed, 67% were settled as a result
in violation of 42 U.S.C. § 1983.8 On October 15, 2015,
of mediation. This settlement rate does not reflect cases re-
Chief Judge Loretta Preska issued Administrative Order
solved after litigation resumed regardless how soon after
M10-468, which set forth Discovery Protocols to be fol-
the mediation. Of the remaining 72 cases where mediation
lowed in the employment matters.9 On October 3, 2016,
did not occur, 24 cases settled prior to mediation, and 10
the Southern District expanded the automatic mediation
cases did not proceed to mediation due to a stay of pro-
program to include police-related § 1983 actions brought
ceedings or other motion. 38 cases referred to the media-
against police departments in Westchester, Rockland,
tion program are still pending.
Putnam, Orange, Dutchess, and Sullivan counties.10 The
recent expansion also set forth procedures relating to If we eliminate the thirty-eight cases still pending,
mandatory discovery, demands and offers, and standard and the 10 that did not proceed to mediation due to a stay
forms for the release of medical and police records.11 of proceedings or some other motion, and include the 24
cases that settled prior to mediation, the “success rate” of
The Southern District program has increased the
the cases sent to mediation is a little over 71%.
number of pro se employment cases handled by the
Mediation Office, and seeks to secure legal representa- EDNY Mandatory Arbitration Program
tion for pro se plaintiffs for the purpose of the media-
Unique among the four federal district courts in New
tion. More recently the Southern District expanded the
York, the Eastern District has a Compulsory Arbitration
automatic mediation program to include cases filed
program pursuant to Local Civil Rule 83.7. With a few
under the Fair Labor Standards Act, 29 U.S.C. §§ 201 et
limited exceptions, the rule requires that the clerk of the
seq., (FLSA).
court “shall designate and process for compulsory arbitra-
The data from the Southern District automatic tion all civil cases… wherein money damages only are
program shows one critical thing. It works extremely being sought in an amount not in excess of $150,000.00
well. In 2015, a total of 1,094 cases were referred into the exclusive of interest and costs.”15
SDNY Mediation Program. As of July 28, 2016 (the date
According to the EDNY’s Alternative Dispute Resolu-
of the most recent Annual Report) 1,030 of the cases were
tion Report for the period July 1, 2015 to June 30, 2016, 129
closed with the following rates of settlement:12
cases were referred to the EDNY compulsory arbitration
Automatic Employment: 46% program. Of the cases where an arbitration hearing was
scheduled, 65% were voluntarily dismissed prior to a hearing.
Pro Se Employment: 66% As of publication of the annual report, 33% of the cases
Judge-referred (non-pro se employment): 63% were still pending and 2% actually proceeded to a hear-
ing.16 Note also that the EDNY’s compulsory arbitration
Local Civil Rule 83.10 (the § 1983 Plan): 64% program does not leave a loser at the arbitration preclud-
The SDNY data include only those cases resolved ed from thereafter using the court process. Section 83.7(h)
after a mediator is assigned, even if it settles before an of the Court Rules permits any party, within 30 days after
initial in-person session. However, not included are cases an arbitration award has been docketed, to demand in
settled at any time after the final mediator report is dock- writing a trial de novo in the District Court.
eted.13 Again, if the Southern District included settle-
ments before and within 60 days after the mediation, the What Makes an Automatic Program Successful?
above figures would be even higher. The data from the automatic court-annexed ADR
programs in New York’s federal district courts are re-
markable to say the least. They show it is realistic to
expect roughly half, and often more, of all civil cases

22 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
directly sent to mediation, without the parties’ consent, ting, training, and ongoing interaction with mediators an
will be resolved with little court involvement. Anecdotal important part of their programs.
evidence also supports the idea that these programs can
have an enormously positive effect on court caseloads
Follow Up: Nudge in Chief
and backlogs.17
While many cases get resolved in a single session
Below are some features that seem to underlie suc- mediation, others do not. The ability of mediators to
cessful program. contact parties after initial sessions to question, cajole,
and discuss ideas is often what enables a case to settle.
Well Trained Mediators Mediators often continue caucusing with parties between
sessions through follow-up phone calls that keep the par-
Providing well trained mediators is an essential ties communicating and developing new approaches to a
aspect of a successful court annexed program. Each of resolution. Even federal court magistrates, who often will
the four District Court programs provide for training take on a mediation role, may not have the time, or the
and program mediators are vetted before entering the luxury of casual conversation with parties, to engage in
program. New mediators observe mediations before they ongoing settlement talks.
handle any and are observed once they have moved on
to mediating cases on their own. Parties submit evalua-
tion forms after the mediation, where they can comment Data Collection
on the quality of the mediation and the mediator. These The Districts have made data collection an important
evaluation forms are reviewed by the program adminis- aspect of their programs, though it is always a work in
trators to ensure quality control. progress. Programs expand or are modified, or additional
The programs bring mediators together on a regular data is deemed worth collecting. Data collection is not
basis to discuss cases, new procedures, and new law, overly difficult with some initial planning. Basic case data
and to exchange ideas about mediation practice. This is uniformly in electronic form. Entering mediation dates
helps mediators sharpen their skills and stay abreast of and whether and when a case was successfully resolved
developments. can be, and usually is, entered into the court database.
This makes basic statistical assessment of program perfor-
mance relatively straightforward. Keeping good data is
Expansive Mediator Roles essential to know if a program is working well. One result
Simply having a mediator involved in a case can of the Western District’s data collection was that the pro-
create the conditions for the dispute’s resolution. This is gram was proven to be so successful the Northern District
partly a function of the mediator’s role during all court of New York adopted almost the exact same broad-based
annexed mediations. automatic program.

Discovery Compensation
Mediators in these programs are given wide latitude Lawyers and judges expect to be paid for their work.
in handling cases and often act as de facto magistrates. Both the Western and Northern District rules require
Since cases are usually sent to mediation before discov- that mediators be paid, though they also require pro
ery, the mediator and the parties typically figure out what bono work so parties who cannot afford to pay can also
discovery is needed before a productive mediation ses- participate. The Eastern District program provides for
sion can be held. Based on my litigation background, and limited compensation. The Southern District program has
my experience mediating cases in the Southern District no compensation and all mediators participating in the
program and elsewhere, it is clear that the amount of program work for free. This should change. The experi-
discovery that might normally take place during a full ence of the Western and Northern District programs is
litigation is significantly reduced when cases are medi- that lawyers and litigants quickly come to appreciate the
ated. In addition, addressing discovery matters with the benefits of the automatic court-annexed referrals to me-
parties is often the start of an informal working relation- diation. Mediator cost, typically split between parties, is
ship between the parties and the mediator, which can rarely a significant cost of the process. Given the amount
later facilitate the settlement process. of prep work, mediation work, and often follow-up work
required for a successful mediation, the courts should
ensure that mediators in their programs are properly
Facilitator compensated.
The most obvious role of the mediator is facilitating
discussions between the parties. It is beyond the purview
of this article to discuss what makes a good facilitator, but Conclusion
the federal district courts in New York have made vet- Cultural shifts typically start slowly and gain mo-
mentum. For many years ADR, and in particular media-

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 23
tion, has been the new next best thing. Change always 7. The Central District of California, for example, does keep data on
cases in its court-annexed program that settle within 60 days of the
seemed just around the corner. But its use is now quickly last mediation session.
accelerating. The bold 2006 Western District pilot pro-
8. See Local Rule 83.10 of the Local Rules of the United States District
gram that sent almost all incoming civil cases directly Courts for the Southern and Eastern Districts of New York. The
to mediation was the initiative of Chief Judge William Rules can be found at http://www.nysd.uscourts.gov/rules/rules.
Skretny. Clearly his finger was on the pulse. The program pdf.
kept working and four years later it was made perma- 9. The Order can be found at http://nysd.uscourts.gov/docs/
nent. Having observed that success, the Northern District mediation/2015%20-%20Second%20Amended%20Standing%20
Admin%20Order%20-%20Counseled%20Employment.pdf.
picked up the same program, started a pilot, and in only
two years it became permanent. In 2011, the Southern 10. See, “Plan for Certain § 1983 Cases Against Police Department in
Westchester, Rockland, Putnam, Orange, Dutchess, and Sullivan
District began sending to mediation some § 1983 and Counties”, located at http://www.nysd.uscourts.gov/docs/
counseled employment cases (except those under the mediation/1983%20Plan%20Whitxxxxxxxx`e%20Plains%20Final.
FLSA) filed in its Manhattan courthouse. Pro se employ- pdf.
ment cases were then added. In 2016 the program ex- 11. Id.
panded to include the six “upstate” counties covered by 12. Data contained in the Annual Report of the Southern District of
the White Plains courthouse. Now the FLSA cases have New York Mediation Program for calendar year 2015, dated July
been added. The Eastern District seems poised to follow. 28, 2016. The report can be found at http://www.nysd.uscourts.
gov/docs/mediation/Annual_Reports/2015/Annual%20
There is little reason why automatic mediation pro- Report.2015.pdf.
grams could not be successfully implemented in the state 13. Email from Rebecca Price, SDNY ADR Program Director,
courts, especially in (though certainly not limited to) the December 19, 2016.
commercial parts. Since cases sent to mediation ab initio 14. All data relating to the Eastern District of New York are taken
require less court involvement, reduce motion practice, from the Alternative Dispute Resolution Report, July 1, 2015—
June 30, 2016, Eastern District of New York. The Report can be
and caseloads, they should not require much additional found at https://img.nyed.uscourts.gov/files/local_rules/2015-
administrative staffing. Court annexed automatic me- 2016mediationreport.pdf.
diation programs have been implemented and proven 15. Local Rule 83.7(d)(1). The rule can be found at https://img.nyed.
successful. The rules have been created, revised, and are uscourts.gov/files/local_rules/localrules.pdf.
now in place. The direction is clear. If you build it, they 16. The Report can be found at https://img.nyed.uscourts.gov/files/
will come. local_rules/2015-2016mediationreport.pdf.
17. See, Petro, Michael, Special Report: Alternative Dispute Resolution,
Federal ADR Chips Away at Court Docket, Buffalo Law Journal, Vol.
Endnotes 87, No. 1, June 22, 2015. The article can be found at http://www.
1. ADR Plan, Western District of New York, found at http:// bizjournals.com/buffalo/blog/buffalo-law-journal/2015/06/
www.nywd.uscourts.gov/sites/default/fi les/ federal-adr-chips-away-at-court-docket.html.
ADRPlanRevisedJune242011.pdf. © Gary Shaffer 2017
2. Id.
3. Id., Section 2.2C. Gary Shaffer (www.Shaffermediation.com)
4. Information supplied by Barry Radlin, ADR Program has a diverse mediation practice that includes
Administrator for the Western District of New York. commercial, employment, divorce, and
5. General Order No. 47 can be found at http://www.nynd.uscourts. personal injury matters. He is also on the
gov/sites/nynd/files/general-ordes/GO47_9.pdf.
mediation panels of the Southern District of
6. NYND Mediation Program Statistics can be found at http://www.
nynd.uscourts.gov/pilot-mandatory-mediation-program-statistics. New York, the 2d Circuit Court of Appeals,
and the Appellate Division, 1st Dept. He can
be reached at Gary@shaffermediation.com.

DISPUTE RESOLUTION SECTION

Visit us at www.nysba.org/DRS

24 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 International
M&A Arbitration and Expedited Procedures:
A Need for Speed?
By Alejandro López Ortiz

In an M&A transaction, two or more corporate enti- Disputes at this stage generally do not have a particular
ties or their operating units are transferred or combined, need for speed. If despite the dispute, the parties continue
resulting in the creation of a new entity, or in one of to be interested in the deal, they will normally overcome
the former entities acquiring the shares or the assets of their differences and will most likely not consider litigat-
the other. An M&A transaction may take many differ- ing; if on the other hand, parties walk away from the deal,
ent forms and different sets of contracts may be used to it seems unlikely that the parties have any special urgency
formalize it. However, what it is common to all M&A to determine the consequences of the breach, as they will
transactions is that the process is generally disruptive normally concentrate in other businesses. Precisely as a
for the business of the different entities involved. This is consequence of this limited interest of the parties to re-
particularly the case in hostile M&A transactions, when solve disputes occurring at this early stage, it is not often
an entity attempts to take the control of another without that letters of intent include arbitration agreements.2
its consent. But even in friendly deals, the period during
In the period after the closing of the transaction, when
which the transaction is negotiated or executed comes
it has been given full effect and the control of the business
with a great deal of uncertainty: the deal may be pulled
or of the shares has changed hands, disputes will often
for a number of reasons; unexpected information may
arise, for example, in respect of the application of price
be revealed, external events (including economic, politi-
adjustment clauses and breaches of representations and
cal and regulatory) may occur, altering the conditions
warranties or indemnities. These disputes are frequently
in which the parties expected the transaction to take
decided in arbitration and generally require a complex
place; scrutiny is increased, and, in any event, control
legal or factual analysis. For this, and also due to the fact
of the business is expected to change hands. All of these
that the transaction has already taken effect, the parties do
situations may give rise to disputes between the parties
not tend to have a particular need for speed when resolv-
not only when the deal is through, but also during the
ing disputes arising out of this phase, except if the dispute
process. This is why parties to these types of transactions
involves claims that the transaction should be undone,
may have a genuine interest in resolving these disputes
when the need for a swift resolution of the dispute be-
in an expedited manner. In these cases, resorting to fast-
comes more acute.
track arbitration (either designed ad hoc for the transac-
tion, or relying on existing expedited procedures under It is during the period between the signing of the
the rules of an arbitral institution) may be a good option. transaction and the closing when the need for a speedy
resolution of disputes that may arise becomes more
Typology of Disputes in M&A Transactions extreme and perhaps justifies the use of fast-track
arbitration.
Disputes in M&A transactions are more common
than one might expect, and the way in which they are
to be handled has become a strategic decision in the Disputes in the Post-Signing and Pre-closing
transaction. Different types of disputes generally arise at Period
different stages of M&A transactions, and the need for a The period between the signing of the transaction and
speedy resolution is not the same in all of them. Gener- the closing, which may last for months, even over a year,
ally speaking, we can identify three different periods is marked by temporariness and uncertainty: the deal is
when disputes may arise: pre-signing, between signing done, but not yet effective, while regulatory approvals
and closing, and post-closing of the deal. (predominantly antitrust and merger control clearance)
The pre-signing stage refers to the period during are obtained, necessary restructuring steps are taken (for
which the parties establish the first contacts and sign a example, the creation of a vehicle entity, the spin-off of
letter of intent which sets forth the terms under which the business to be transferred, etc.) and other conditions
they will proceed to negotiate the deal. During this precedent (such us approvals and waivers from borrow-
period, disputes generally refer to the binding effect of ers and guarantors) are met. In fact, the occurrence or not
the letter of intent, breaches of covenants contained in of these events may delay the execution of the transac-
it (such as confidentiality agreements) or claims for the tion and even put it at risk. Further, during this period,
abandonment of the negotiations (culpa in contrahendo).1 external circumstances may change affecting the rationale

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 25
or the commercial sense of the transaction or the parties Dispute Resolution Mechanisms and Expedited
may simply change their mind. The following categories Arbitration
of dispute typically arise during this period: While arbitration is the preferred method of dis-
• In the first place, the very occurrence of the condi- pute resolution when it comes to disputes arising out of
tions precedent that would trigger closing may be- M&A transactions, as it allows a specialized resolution of
come at the heart of a dispute between the parties.3 complex commercial disputes in a swift manner and with
In this type of dispute, the parties may have differ- moderate costs, increasing complexity in commercial ar-
ing views on whether the condition precedent has bitration makes the average time to resolution too lengthy
taken place or not, and if not, whose responsibility for the needs of disputes arising out of this post-signing
is it and who is to suffer the consequences of this and pre-closing phase. In fact, it is not unusual for an
noncompliance. international arbitration to take over 18 or 24 months to
be decided, which is excessive when an M&A transaction
• Secondly, during this period, while the combina- is pending.
tion or transfer has been agreed upon, the business
often continues to be run by the selling party or Parties may, however, resort to “Fast-Track” arbitra-
original owner. However, the seller may no longer tion to decide specific disputes within a short time frame.
feel in charge of the business, while the purchaser This may be done through a tailor-made procedure with
is not yet in control, which may damage the value short deadlines or by resorting to institutional rules
of the business. Further, the interests of the parties providing for expedited procedures,6 such as the recently
may not be fully aligned during that period or may launched Expedited Arbitration Rules of the International
even be conflicting if the seller has within its reach, Chamber of Commerce (ICC),7 the Singapore Interna-
for example, increasing the price to be received. In tional Arbitration Centre (SIAC),8 and the American
these circumstances, it is not unusual that differ- Arbitration Association’s International Centre for Dispute
ences in respect of the management of the business Resolution Arbitration Rules (ICDR).9
arise.4 Parties may also consider other mechanisms which
• Thirdly, M&A contracts habitually include “Mate- allow obtaining a quick ruling in a dispute, such as dispute
rial Adverse Clauses” (MAC), which attempt to boards (which are increasingly used in complex construc-
protect one of the parties from the occurrence of tion projects) or emergency arbitration proceedings10
a relevant change of circumstances affecting the (such as the Emergency Arbitration Rules of the ICC,11
business. Normally, the occurrence of one of these SIAC,12 or the emergency measures of protection under
circumstances allow the purchaser to rescind the the ICDR rules).13 However, none of these mechanisms
contract or to significantly modify the price or offers a final determination of the controversy, which
other conditions. It is usual that parties dispute may (in the case of dispute boards) or shall (in the case of
whether the material adverse event has taken emergency arbitration) be submitted to final decision by
place, and its consequences.5 an arbitral tribunal, which may in fact overturn the earlier
ruling.
These disputes are extremely time critical, as they
normally prevent the closing from taking place. Further,
the longer the closing takes, the more likely it is that Drafting a Fast-Track Arbitration Clause for M&A
other disputes will arise during this period, thus trump- Disputes
ing the transaction. If parties consider including a fast-track procedure to
resolve M&A disputes, the first question that they should
analyze is whether this procedure shall apply to all dis-
”Parties may, however, resort to ‘Fast- putes arising out of the transaction or only to certain dis-
Track’ arbitration to decide specific putes. Arguably, it is not necessarily a good idea to submit
disputes within a short time frame. This all disputes to the fast-track procedure, as disputes arising
after the closing may be better dealt with in a procedure
may be done through a tailor-made allowing the parties more time to prepare the case. There-
procedure with short deadlines or by fore, it is important to carefully determine which disputes
resorting to institutional rules providing are to be submitted to fast-track arbitration and which
for expedited procedures.” ones will be decided following a standard procedure.
The second decision to be made is whether to use
Consequently, parties are interested in a dispute reso- pre-set rules of expedited arbitration or to design a tailor-
lution method that would allow them to have the contro- made procedure in the arbitration agreement. While
versy decided promptly, so that the period of uncertainty pre-established rules, such us the expedited procedure
is reduced to a minimum. contained at the ICC Rules,14 the SIAC Rules,15 or the
ICDR Rules16 have the clear advantage of offering tested

26 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
rules, which limits the risk of poor drafting or unwanted 3. A. Carlevaris, The Arbitration of Disputes Relating to Mergers and
loopholes, sometimes the existing procedures do not offer Acquisitions: A Study of ICC Cases, ICC International Court of
Arbitration Bulletin Vol.24 No. (2013), at 4.
the parties the speed they need for their dispute. These
4. B. Ehle, supra note 2, at 293.
rules allow for a decision up to a period of six months,
which may not be sufficiently fast for the parties’ needs. 5. A. Broichmann, Disputes in the Fast Lane: Fast-Track Arbitration in
Merger and Acquisition Disputes, International Arbitration Law
Review, Issue 4 (2008), at 148-149.

”During that phase, the transaction is 6. Id. at 146.

7. ICC Arbitration Rules 2017, Article 30 and Appendix VI.
pending, and resolving disputes in a
8. SIAC Arbitration Rules 2016, Article 5.
speedy manner may be the difference 9. ICDR Arbitration Rules 2014, International Expedited Procedures.
between a successful deal and a failed 10. E. Fischer and M. Walbert, supra note 1, at 32-35.
transaction.” 11. ICC Arbitration Rules 2017, Article 29 and Appendix V.
12. SIAC Arbitration Rules 2016, Schedule 1.
The third point that drafters of these fast-track 13. ICDR Arbitration Rules 2014, Article 6.
clauses need to consider has to do with the design of the
14. ICC Arbitration Rules 2017, Article 30 and Appendix VI.
procedure.17 While parties may want to expedite resolu-
15. SIAC Arbitration Rules 2016, Article 5.
tion of the dispute, they need to make sure that the result-
ing procedure provides equal treatment to the parties 16. ICDR Arbitration Rules 2014, International Expedited Procedures.
and does not prevent parties to reasonably present their 17. K. Sachs, Solving Tensions Between Expert Determination and
Arbitration Under M&A Contracts, In International Arbitration
case; otherwise, the enforceability of the award would
Under Review: Essays in Honour of John Beechey (2015), 367-368.
be endangered. Similarly, it needs to be ensured that the
18. However, in a very interesting decision (Newedge USA, LLC v.
tribunal (preferably a sole arbitrator) has enough time to Manoel Fernando Garcia, STJ September 1, 20014), the Brazilian
render a reasoned decision, unless he or she is dispensed Superior Court of Justice recognized for the first time an
from the duty to provide reasons in jurisdictions where unreasoned award issues in New York, despite the fact that the
this is allowed and where enforcement might be sought.18 Brazilian Arbitration Act requires arbitral awards to provide
reasons, stating that it did not violate Brazil’s public policy.
Finally, if this tailor-made procedure is to be adminis- See H. Burnett and M. Carreteiro, Brazilian Court Recognizes An
Unreasoned New York Arbitral Award In Kluwer Arbitration Blog,
tered by an arbitral institution, it is advisable to discuss in September 29, 2014.
advance with the institution that the procedure designed
will be compatible with the rules of the institution and
that the institution will be able and willing to administer Alejandro López Ortiz is a partner of Mayer Brown,
the arbitration as agreed by the parties. based in its Paris office, where he focuses on Interna-
tional Arbitration. Admitted to practice in Madrid and
Paris, he handles complex commercial and investment
Conclusion arbitration cases and frequently sits as arbitrator. You
Disputes arising during the period between the sign- can reach him at alopezortiz@mayerbrown.com.
ing and the closing of an M&A transaction are particu-
larly time-sensitive. During that phase, the transaction
is pending, and resolving disputes in a speedy manner
may be the difference between a successful deal and a
failed transaction. Fast-track arbitration procedures may
offer the parties the mechanism they need to resolve such Follow NYSBA on Twitter
disputes within the required deadline. Parties may rely
on pre-set institutional expedited rules or design tailor-
made fast-track procedures; in this second scenario, par-
ties need to be extremely careful to balance their need for
speed and due process requirements, to avoid endanger-
ing the enforceability of the award.

Endnotes
1. E. Fischer and M. Walbert, Chapter I: The Arbitration Agreement Stay up to date on the latest news
and Arbitrability, Efficient and Expeditious Dispute Resolution in
M&A Transactions, in C. Klausegger, P. Klein, et al. (eds), Austrian
from the Association
Yearbook on International Arbitration 2017, Austrian Yearbook on
International Arbitration, Volume 2017, 1 at 21. www.twitter.com/nysba
2. B. Ehle, Arbitration as a Dispute Resolution Mechanism in Mergers
and Acquisitions, in Comparative Law Yearbook of International
Business (2008), at 291.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 27
Globalizing Trends in Ascertaining the Content of the
Applicable Law in International Arbitration—Beyond the
Civil-Common Law Divide
By Mohamed S. Abdel Wahab

Arbitration is a bespoke process that caters to the apply the lex causae, especially when the tribunal does not
needs of the business community and the disputing possess the required knowledge of the applicable law.
parties. In international arbitration many different legal
systems and traditions are at play, and sometimes uncer- In addition to this dilemma, there are also risks and
tainty reigns with respect to the limits and boundaries perils associated with the approach(es) taken by arbitral
of ascertaining and applying the content of the lex causae tribunals when ascertaining the content of the applicable
(i.e., the law governing the merits of the dispute). Whilst, substantive law. Arbitral tribunals need to cautiously and
at the first place, the parties bear the primary burden of prudently exercise their applicable law investigative powers
establishing the content of the applicable law, it is un- to strike a balance between the need to properly and cor-
equivocal that the arbitrators have powers to determine rectly apply the law and the need to respect and observe
and ascertain the content of the applicable law. the legal principles of party autonomy, due process and
transparency, which all entail that arbitrators may not take
In the law and practice of international arbitration, the parties by surprise when applying the law.
three approaches in ascertaining the content of the ap-
plicable lex causae could be distinguished. According to
the first civil law-oriented approach, an arbitral tribunal Global Trends in Ascertaining the Content of the
ascertains and determines the content of the applicable Applicable Law
law pursuant to the iura novit curia presumption. Pursu- Apart from the traditional adversarial and inquisito-
ant to the second common law-oriented approach, an arbitral rial dichotomy, the means by which the content of the
tribunal would procedurally treat the lex causae as a mat- applicable law could be ascertained remains, absent the
ter of fact to be proven by the parties. Regarding the third parties’ agreement, subject to the arbitral tribunal’s discre-
approach, it is a hybrid approach where an arbitral tribunal tion and the applicable procedural norms. Globally, the
may combine aspects of the first and second approaches. means by which the contents of the applicable law may be
ascertained fall into three broad categories:

”Arbitral tribunals need to... strike a (a) pleading and proving the content of the applicable
law through counsel and documentary evidence;
balance between the need to properly
and correctly apply the law and the (b) resorting to party appointed or tribunal appointed
need to respect and observe the legal legal expert(s) to ascertain the contents of the ap-
plicable law, and/or
principles of party autonomy, due process
and transparency, which all entail that (c) relying on the tribunal’s legal knowledge of the
applicable law, if it possesses such knowledge and
arbitrators may not take the parties by if so envisaged by the parties.
surprise when applying the law.”
However, these means remain subject to the parties’
legitimate expectations, which entail affording the parties
The dilemma is that national arbitration laws and an adequate opportunity to address, comment on, and
institutional rules do not usually address the extent to analyze the legal issues that have arisen out of the tribu-
which arbitrators may, ex officio, apply and ascertain, nal’s approach to the lex causae. Thus, arbitral tribunals
sua sponte, the contents of the lex causae. However, some conducting their own research into the applicable law are
exceptions do exist. For example, Section 34(2)(g) of the expected to furnish the parties with an adequate oppor-
English Arbitration Act (1996) explicitly empowers the tunity to address the tribunal’s findings before basing the
tribunal to consider “whether and to what extent the tribu- award thereon. This is addressed in more details below.
nal should itself take the initiative in ascertaining the facts
and law.” This clearly implies that an arbitral tribunal
is bound to determine and ascertain the content of the The Guiding Principles of Arbitral Discretion and
applicable law or rules of law which it intends to apply, Iura Novit Arbiter Limitations
either as chosen by the parties or as deemed appropri- Pursuant to the principles of party autonomy and
ate by the tribunal in the absence of the parties’ choice. legitimate expectations, arbitrators are generally under a
Nevertheless, no normative rules clarify how a tribunal legal obligation to apply the law or rules of law chosen by
can effectively, efficiently and properly ascertain and the parties, and, in the absence of such choice, arbitrators

28 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
should determine and apply the governing law or rules. illegality of contract on their own motion). The reason for this
In fulfilling such an obligation, arbitrators retain the being, although certain jurisdictions accord the power to
discretion, and may have the right, to raise certain legal the arbitrators to raise legal issues ex officio, the arbitral
issues sua sponte and to ultimately ascertain the content of tribunal could be challenged or accused of exceeding its
the applicable law. mandate if it based its decision on a legal rule not in-
voked and discussed by the parties.
Practice shows that arbitrators, whether from civil or
common law backgrounds, tend to proactively engage That said, arbitral tribunals do not have absolute
with the parties and raise, sua sponte, procedural and sub- discretion; their inherent, implied and/or discretionary
stantive legal issues without being largely constrained by powers aim at safeguarding the integrity and the efficient
the traditional civil-common law divide. This overlooked, conduct of the proceedings. In discharging their man-
yet visible, practice bears witness to a degree of conver- dates and navigating through the perils and challenges
gence in the practice of international arbitration. of ascertaining the content of the applicable law, arbitral
tribunals need to consider a host of laws and rules that
In light of this legal realism, the International Law include: the overriding mandatory provisions of the lex
Association (ILA) Committee on International Commer- arbitri, the governing lex causae and any other applicable
cial Arbitration addressed the issue of ascertaining the procedural and substantive rules, including any overarch-
content of the applicable law in international commercial ing rules of due process.
arbitration in 2008. The conference, held in Rio de Janeiro,
Brazil between 17-21 August 2008, resulted in a set of
recommendations on how an arbitral tribunal should Striking the Proper Balance—Optimal Equilibrium
ascertain the content of the applicable law, which defines Beyond the Civil-Common Law Divide
the trajectory of iura novit arbiter. The pertinent ILA Rec- The boundaries and limits of the principle of iura
ommendations (5)–(8) are of particular importance in this novit arbiter remains at the core of the debate regarding
context. arbitrators’ powers to ascertain the content of the ap-
Recommendation 5 sets out the general principle in plicable law(s). It is in this respect that the principles set
this regard. It provides that arbitrators should primarily forth by the ILA Recommendations offer the safe harbor
receive information about the contents of the applicable guiding principles that: (i) define the limits and harness
law from the parties. arbitral discretion, (ii) avert the abuse of arbitral powers,
(iii) maintain the fine line separating justice and legality
Recommendation 6 states that, in general and subject from encroachment and subjectivism, and (iv) observe the
to Recommendation 13, arbitrators should not introduce parties’ legitimate expectations.
legal issues—propositions of law that may bear on the
outcome of the dispute—that the parties have not raised. On such account, the prevailing practice in interna-
tional arbitration confirms that certain global trends exist
Recommendation 7 confirms that arbitrators: (i) are not and guide arbitrators in prudently exercising their discre-
confined to the parties’ submissions about the contents tion. These global trends are limited by three essential
of applicable law, and, subject to Recommendation 8, (ii) constraints:
may question the parties about legal issues the parties
have raised and about their submissions and evidence (a) ne ultra petita (i.e. arbitrators should
on the contents of the applicable law, (iii) may review avoid exceeding the parties’ claims and
sources not invoked by the parties relating to those legal relief sought, modifying the subject mat-
issues, and (iv) may, in a transparent manner, rely on ter of the dispute, and/or deciding on
their own legal knowledge as to the applicable law. legal ramifications that did not form part
of the case record), (b) maintaining trans-
Recommendation 8 provides the needed comfort to the parency and foreseeability (i.e., not sur-
parties and the balancing factor by emphasizing that, be- prising the parties or defying their legiti-
fore reaching their conclusions and rendering a decision mate expectations regarding the decision
or an award, arbitrators should give parties the reason- making process), and (c) due process (i.e.
able opportunity to be heard on legal issues that may safeguarding the parties’ right to address
be relevant to the disposition of the case. They should all pertinent legal issues and maintain-
not give decisions that might reasonably be expected to ing the principle of adversarialism—le
surprise the parties or go beyond that which was claimed principe du contradictoire—where the
or requested by them, save for exceptional and concrete parties should be afforded a reasonable
international public policy considerations. opportunity to confront and address the
According to these ILA Recommendations, arbitra- opposing arguments and claims in an
tors should not, ex officio, introduce any legal issues— adversarial mode).
propositions of law that may bear on the outcome of the
It is in this context that Article 22(1)(iii) of the LCIA
dispute, except where the legal issue concerns matters of
Arbitration Rules captures the essence and limits of
ordre public (for example, arbitrators must raise the issue of

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 29
arbitral discretion and the optimal balancing approach to a party to raise legal arguments not timely raised
be adopted by arbitral tribunals. Article 22(1)(iii) reads: at the party’s own initiative;
(1) The Arbitral Tribunal shall have the (c) The following legal issues should be promptly
power, upon the application of any party communicated to the parties for their review and
or [...] upon its own initiative, but in analysis prior to rendering an award on the basis
either case only after giving the parties thereof:
a reasonable opportunity to state their
views and upon such terms […] as the 1. Any legal issue that impacts the par-
Arbitral Tribunal may decide: ties’ legal characterizations and inter-
pretations of contract(s), act(s), and/or
[…] event(s);
(iii) to conduct such enquiries as may 2. Any legal issue of a public policy or
appear to the Arbitral Tribunal to be nec- overriding mandatory nature that can
essary or expedient, including whether impact the validity or enforceability of
and to what extent the Arbitral Tribunal the award; and
should itself take the initiative in iden-
tifying relevant issues and ascertaining (d) Legal texts, precedents, authorities, and other
relevant facts and the law(s) or rules of sources additional to those submitted by the par-
law applicable to the Arbitration Agree- ties, which are exclusively utilized by the arbitra-
ment, the arbitration and the merits of tors for the sole purpose of fortifying their reason-
the parties’ dispute. [Emphasis added] ing in an award and which do not go beyond the
parties’ claims, defenses and arguments, do not
Accordingly, it is clear that the principle iura novit always require prior submission to the parties for
arbiter is subject to concrete limitations that vary depend- their commentary or analysis insofar as they are
ing on the applicable legal system and the overarching simply additional sources that do not change or
golden rules of due process, adversarialism, party autonomy affect the parties’ respective cases and the out-
and legitimate expectations as well as aversion of circum- come of the award. However, this ought to be
vention of arbitral jurisdiction. The principles of the ILA carefully considered in light of the applicable
Recommendations offer guidance for arbitrators when procedural rules. The author acknowledges that
ascertaining the content of the applicable law. the practice in certain arbitral institutions may
militate against the inclusion of additional for-
It is submitted that the success and stability of the tifying legal sources that are not in the record.
international arbitration system hinges not only on re- Nevertheless, this institutional practice is primar-
specting and observing the principle of party autonomy, ily driven by the desire to avert any risk, whether
but also on considering those overriding global legal probable or improbable, of challenge to the award.
principles that safeguard the legitimacy, integrity and
operability of the system. Arbitrators must first turn to It should be noted, however, that the above prin-
the parties to seek their input, since they bear the burden ciples are not intended to be exhaustive and, in any event,
of ascertaining the applicable law. Failing adequate or arbitrators ought to be careful in communicating with the
proper submissions by the parties, arbitrators may resort parties to avert being seen as engaging in inappropriate
to other discretionary means to ascertain the content of predispositions and premature determination that could
the applicable law, as stated above. trigger challenges against arbitrators.
However, in ascertaining the content of the appli- By and large, the arbitrators’ duty to apply the law(s)
cable law, arbitrators must not circumvent the funda- and approach to ascertaining the content of the applicable
mental principles of: (i) due process and adversarialism; law(s) under the limits of iura novit arbiter will continue to
(ii) jurisdiction (ratione materiae, ratione temporis, ratione be a controversial issue that will evolve and be re-shaped
personae and ratione locus); and (iii) not exceeding the par- by considerations of legal necessity and practical realism,
ties’ claims, defenses and relief. yet it will continue to be subject to globalizing principles
and trends that transcend the traditional civil-common
In application of the above, it is submitted that the law divide.
following practical and legal principles ought to be con-
sidered by arbitrators when ascertaining the content of
the applicable law: Mohamed S. Abdel Wahab, MSW@zulficarpartners.
com, Chair of Private International Law and Professor
(a) Arbitrators have the discretion (not the obliga- of International Arbitration, Cairo University; Founding
tion) to raise, sua sponte, legal issues not raised by Partner and Head of International Arbitration, Zulficar
the parties, insofar as such issues are pertinent to & Partners Law Firm; Vice President, ICC International
the determination of the dispute; Court of Arbitration; Member of the London Court of
(b) In raising legal issues sua sponte, arbitrators International Arbitration; President of the LCIA Arab
have to be very cautious so as not to exceed their Users’ Council; and Vice Chairman of the CIArb Egypt
mandate and jurisdiction, raise irrelevant issues, Branch. The views expressed in this article are that of
transform the nature of the dispute and/or induce the author and do not represent the views of any institu-
tion with which the author is affiliated.

30 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
Multilingual Arbitrations: Optimizing Parties’
Agreements, Scope, Costs, Award-Making
By Guido Carducci

Introduction II. Determination of Language(s) and Its Scope

The growth of international business and trade multi- Various international rules of arbitration2 and the
plies international transactions and, in part, multilingual UNCITRAL Model Law3 recognize the parties’ freedom to
arbitrations. While national courts operate in their lan- choose more languages as to their proceedings.
guage, exceptionally in two or three languages in federal
systems, most institutional rules and legislations offer Should the parties omit to agree about language(s), the
a significant advantage of international arbitration over tribunal may decide after consideration of any relevant cir-
court litigation by granting the parties two distinct free- cumstance, including the language of the contract4 or of the
doms, i.e., to choose a language other than the language documents containing the arbitration agreement.5 As the
of the seat of the tribunal, and more languages as to their constitution of a tribunal may take some time, an alterna-
proceedings as a whole. Such rules and legislations gener- tive distinguishes between the determination of language(s)
ally do not exclude what could be regarded as a third by default, by the appointing authority and then by the tri-
freedom, i.e., the parties choosing more languages, each as bunal after its constitution.6 Although rules are often silent,
to distinct aspects of the arbitration, although complexity it is advisable for the tribunal to consult the parties before
would increase and few are the aspects likely to be use- reaching its decision as to language(s).
fully subject to different languages. Time: Although the determination of language(s) is to
This article addresses issues and challenges that inter- be prompt as it is crucial for any communication between
national multilingual arbitrations raise. the parties, with the tribunal as soon as it is constituted,
and for any submission of documents and evidence, only
some rules require such determination by the tribunal to be
I. Importance of Language(s) prompt after its constitution.7
Language(s) matters and affects numerous variables,
including the following:
“Early consideration of...the linguistic
i) access to and communication with the tribunal and aspects of an international arbitration are
the other party(ies);
beneficial to, at least, saving costs and
ii) reduction of potential arbitrators by requiring two time, and possibly to enhancing legal
or more languages;
predictability.”
iii) possibility to work and degree of performance of
arbitrators, counsels, experts, witnesses; Scope: An important matter is scope, i.e. the issues the
iv) necessity, costs and time, of translation and inter- selected language(s) applies to. Although one may believe
pretation; that the relevant language(s) covers necessarily the whole
arbitration, the reality may be more nuanced. First, the
v) degree of accuracy in translation or interpretation parties may agree otherwise. Second, should the parties fail
and thus in the tribunal’s and counsel’s analysis of to agree the tribunal may decide otherwise. Third, not all
written or oral evidence. rules define what issues are to be covered by the tribunal’s
determination of language(s).
Parties are advised to consider pros and cons of lan-
guage before departing from the ordinary one language The UNCITRAL Rules and the Swiss Rules clarify that
to a two or more language(s) arbitration. Consideration such determination covers the statements of claim and of
should be in light of the relevant circumstances (volume defense, any further written statements, and any oral hear-
and languages of contract(s), applicable law, documents, ings.8 Award-making is thus excluded. Failing a parties’
witnesses, etc.). Should these be known only partially at agreement, a tribunal may thus determine that languages
the time the arbitration agreement is drafted, consideration A and B apply to such statements and hearings and issue
at a later time or at the beginning of the arbitration would the final award only in language A or B. Another tribunal,
provide a better informed decision. Although multilin- in similar circumstances and under the same UNCITRAL or
gual arbitrations may be beneficial also in some domestic Swiss Rules, may decide to issue the award in languages A
disputes, this article assumes the parties opted for a bilin- and B. The parties should consider the scope of language(s)
gual international arbitration and leaves aside other and under the relevant rules and agree to amend it where ap-
secondary roles of language in arbitration.1 propriate. Should the parties disagree, the applicable rule
and the tribunal’s determination within such rule play a
significant role.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 31
 The UNCITRAL Model Law takes in part a different ii) its focus is indirect, on the linguistic capability of
position. First, it clearly defines its by-default scope of the tribunal, and fails to address directly what is
language (written statements, hearings, award, decision essential, i.e. the selected language(s) and its scope;
or other communication by the tribunal) and submits it to
any agreement of the parties or tribunal’s determination. iii) it lacks scope and fails to express whether the
Second, it extends differently from the UNCITRAL Rules, choice of a bilingual tribunal “implied” bilingual
the scope of the language(s) to any award, decision or arbitral proceedings and, if so, as a whole or in part.
other communication by the tribunal.9 Award-making is The tribunal is advised to seek a clarification from
thus in the same language(s), as any written statement or the parties.
any hearing, agreed by the parties or determined by the It follows that, for the sake of clarity and predictability,
tribunal. Comparing rules, the more recent Model Law a clause referring the dispute to a “bilingual” (or trilingual)
makes more sense than the Rules in linking linguistically tribunal should be omitted and replaced in international
by-default award-making to proceedings. multilingual disputes by a clear clause on language(s) and
scope. Below are some suggested clauses of this kind that
III. Investment Arbitration the parties may wish to consider and adapt as they deem
fit when drafting the arbitration or subsequent agreements,
The Rules of arbitration considered so far may apply with a view to enhancing clarity and legal predictability as
to both commercial and investment disputes. Concerning to the linguistic aspects of their arbitration.
exclusively the latter, under the ICSID Arbitration Rules of
Procedure the parties may agree on the use of one or two i) “All disputes arising out of or in connection with
official languages of the Centre, i.e., English, French and the present contract shall be finally settled under
Spanish, and also on the use of a different language if the the Rules of (X) by one or more arbitrators able
tribunal gives its approval.10 Failing an agreement, each to conduct the arbitral proceedings in language
party may select one of the official languages.11 Comparing A, and also in language B if all parties so request
rules, differently from arbitrations conducted under most in writing.”
rules an ICSID arbitration can thus be bilingual following
The tribunal ought to be bilingual, while the
two unilateral acts, two parties’ unilateral selections of an
proceedings will be by-default in language A. The
ICSID’s official procedural language. This although neither
parties may then opt for both languages depend-
the parties agreed upon, nor the tribunal determined, these
ing on circumstances (volume of documents, oral
two languages.
testimony, etc.).
ii) “All disputes arising out of or in connection with
IV. Optimizing Parties’ Agreement as to
the present contract shall be finally settled under
Language(s) the Rules of (X) by one or more arbitrators con-
Ideally, a multilingual international dispute would ducting the arbitral proceedings in languages A
deserve a clear and detailed arbitration or subsequent and B.”
agreement as to language(s). In practice, time is short and
the parties often use common standard arbitration clauses Self-explanatory. While the proceedings shall be
which focus on the essential agreement to arbitrate and in languages A and B, the bilingual nature of the
omit any determination as to language. Nevertheless, vari- proceeding may impact and benefit the partici-
ous institutions, such as ICC or ICDR,12 invite the parties to pants differently.
consider adding such a determination. Between the parties and the tribunal:
Although most arbitrations are confidential and reli- In bilingual arbitral proceedings, communications,
able empirical evidence is limited, it seems that several submissions and evidence may be in both lan-
arbitration agreements focus not directly on language(s) guages and parties save the time and the costs of
and on its scope, as would be desirable, but only on one translation. Actually, they gain also as to a dif-
and indirect aspect, i.e., the linguistic capability of the ferent risk, less frequently referred to, the risk of
tribunal. We refer to clauses referring the dispute to a “bi- inaccuracy in translation and interpretation in case
lingual” (exceptionally trilingual) arbitrator(s) or tribunal of a hearing (see above, II), unless the tribunal’s
in languages A and B. As we noted above (II) such clause capability in the relevant language(s) is less than
has several implications. For instance, the more linguistic the translator’s or interpreter’s. Beyond linguistic
capabilities are required in the clause the fewer arbitrators knowledge and capability other factors play a role
are likely to meet the requirement and be appointed. from this perspective. Among others, while a
More fundamentally, is such a clause referring the dis- translator is called to translate a document out of
pute to a “bilingual” tribunal desirable? It is better than no context and relying on his/her familiarity with
clause at all as to languages. At the same time, this clause context and/or the limited context the party
should be avoided as: requesting the translation may have provided,
the tribunal generally reads and hears more about
i) it means “only” that the tribunal is capable to arbi- context which may lead to a more accurate under
trate in both A and B languages; standing.

32 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 Between the parties: relationship to the other original. The tribunal may
set language A or B as prevailing with a view to
Differently from above, the parties may, or may solving such linguistic divergences.
not, be able to work in both languages A and B. If
not, party Y communicates only in language A Compared to iv) this formulation enhances legal
and party X in language B. Then issues of time, predictability in multilingual awards. It allows “bi-
costs, and accuracy of translations, and interpreta lingual” tribunals to designate one of the languag-
tion in case of a hearing, remain a reality between es as “prevailing” if they feel more comfortable in
the parties. A bilingual tribunal does not help in it, without questioning the operational and
this regard. self-sufficient character of the award in each lan-
guage. The tribunal is advised to check whether
iii) “All disputes arising out of or in connection with this or similar formulations could conflict, though
the present contract shall be finally settled under unlikely, with a mandatory requirement (below,
the Rules of (X) by one or more arbitrators con- VIII).
ducting the arbitral proceedings (i.e., any written
statement by a party, any hearing and any award,
decision or other communication by the tribunal) V. Court Assistance, Recognition and
in languages A and B.” Enforcement of Foreign Awards
This formulation adds to (ii) and is useful if State courts operate in their own language, even when
the applicable rules do not specify scope of they assist multilingual international arbitrations as to the
language(s) or if the parties wish to amend the constitution of the tribunal, issuing anti-suit injunctions,
by-default scope. and more. Under the New York Convention on the Recogni-
tion and Enforcement of Foreign Arbitral Awards15 the party
iv) “All disputes arising out of or in connection with applying for recognition and enforcement in a contracting
the present contract shall be finally settled under state is to supply a certified translation of the award and the
the Rules of (X) by one or more arbitrators con- arbitration agreement if they are in a foreign language.
ducting the arbitral proceedings (i.e., any written
statement by a party, any hearing and any award,
decision or other communication by the tribunal) VI. Translation and Interpretation Costs
in languages A and B and issuing the award(s) It is relatively common for parties to agree to a bi-
in (one language or) two originals, one in each lingual tribunal for various reasons, as well as to reduce
language.” or eliminate costs of translation and interpretation. Such
This formulation adds to (iii) by including ex- reasoning may, at times, fall short.
pressly award-making and the option for an First of all, whatever its degree of linguistic capabil-
award in one or two languages. Some rules are ity and knowledge, any tribunal takes more time to work
clear in requiring award-making in the two lan- in two rather than one language. While each party saves
guages, both versions being equally authentic, as time and costs by working only in language A or B the
under the ICSID Arbitration Rules13 if the parties tribunal needs more time to work and arbitrate in the two
selected two languages. In other cases, the parties languages, especially if the award(s) is to be issued in both
may prefer bilingual tribunal and proceedings languages. This additional time is likely to increase the
for various reasons and yet receive a one-lan- tribunal’s fees under most arbitration rules.
guage award. As arbitral awards are key, par-
ties in multilingual proceedings should consider Furthermore, as we noted above, a bilingual tribunal
whether they prefer the award(s) in one or more does not avoid translation and interpretation costs and
language(s). time as to communication between the parties if they are
not all able to work in both languages. If so, two questions
v) “All disputes arising out of or in connection with arise.
the present contract shall be finally settled under
the Rules of (X) by one or more arbitrators con (1) As to who is to cover such costs, most rules of
ducting the arbitral proceedings (i.e., any written arbitration do not expressly include in the costs of arbitra-
statement by a party, any hearing and any award, tion the translation and interpretation costs.16 Generally,
decision or other communication by the tribunal) the party requesting the translation covers the related costs
in languages A and B and issuing the award(s) locally. Interpretation costs are easier to determine, and
in (one language or) two originals, one in each concentrated at the time and location of the hearing. The
language. In case of linguistic divergences parties may agree or the tribunal may determine who cov-
between the two originals the parties may seek ers them.
an interpretation by the tribunal or the tribunal (2) As to whether the translation and interpretation
may correct the original(s) on its own initiative14 costs may be allocated between the parties by the tribunal,
within X weeks/months from the day the award is most arbitration rules do not identify specifically such costs
issued. Each original of the award is operative and among the costs of arbitration. The UNCITRAL Rules differ
self-sufficient in its language, not in a hierarchical

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 33
in part and by adding “other costs” incurred by the parties tion law: the tribunal disregarding a party’s state-
to the preexisting “legal costs”; the 2010 version opens the ments, arguments and evidence important to the
list of arbitration costs to other categories of costs incurred decision,19 or a party’s right to present facts essen-
by the parties in relation to the arbitration, although only tial to the decision, its legal arguments, evidence
to the extent that the tribunal determines that the amount on pertinent facts, and the party’s right to partici-
of such costs is reasonable.17 The UNCITRAL Notes on pate in the hearing.20
Organizing Arbitral Proceedings (2016) also provide some
guidance as to such costs, though leaving to the tribunal, or While this article focuses on B to B international dis-
to other rules, the decision whether to include them in the putes, B to C disputes are more likely to raise legal manda-
costs of arbitration. tory requirements as to language in jurisdictions that sub-
stantively protect consumers also in the arbitration context.

VII. Languages and Mandatory Requirements

Conclusion
To the extent that most legislations on international ar-
bitration allow the parties to agree, or the tribunal to deter- Early consideration of these matters and a clear and
mine should the parties fail to agree, the language(s) of the well-reasoned parties’ agreement upon the linguistic
arbitration it is unlikely, though not impossible, that national aspects of an international arbitration are beneficial to, at
legislation would set a mandatory requirement limiting di- least, saving costs and time, and possibly to enhancing legal
rectly the parties’ agreement, or the tribunal’s determination. predictability in cases including the risk of an inaccurate
translation or interpretation of evidence or normative texts.
However, a cautious approach must be taken in any ex-
amination of whether any jurisdiction would impose direct
or indirect limitations on linguistic choices. Furthermore, Endnotes
1. For instance, under the LCIA Rules the languages of the parties are
the tribunal’s determination of language(s) is more likely taken into account in the selection of the arbitrator(s) (Art.5.9).
to be the target of such limitations than an agreement of 2. UNCITRAL Rules, Art.19 (1), ICC Rules, Art.20, LCIA Rules Art.17,
the parties themselves. For instance, should the parties fail ICDR International Arbitration Rules Art.18, Swiss Rules, Art.17 (1).
to agree and then the tribunal decides to direct along the 3. Art.22 (1).
formulation suggested above in (v) (“In case of linguistic 4. ICC Rules, Art.20.
divergences between the two originals the parties may seek 5. ICDR International Arbitration Rules, Art.18.
an interpretation by the tribunal or the tribunal may correct 6. LCIA Rules Art.17.
the original(s) on its own initiative within X weeks/months 7. For instance, the UNCITRAL Rules, Art.19 (1), and the Swiss Rules,
from the day the award is issued. Each original of the Art.17 (1).
award is operative and self-sufficient in its language, not in 8. UNCITRAL Rules, Art.19 (1), Swiss Rules, Art.17 (1).
a hierarchical relationship to the other original. The tribunal 9. Art.22.
may set language A or B as prevailing with a view to solv- 10. After consultation with the Secretary-General.
ing such linguistic divergences.”) would such formulation 11. Art.22.
be in conflict with the “equal treatment of parties” principle 12. After the standard ICC and ICDR arbitration clause the ICC and
which requires, according to the UNCITRAL Model Law, ICDR explanatory texts note that it may be desirable for the parties
that the parties be treated with equality and each party be to add inter alia the language(s) of the arbitration.
given a full opportunity of presenting his case? Also, if the 13. Art.22.
prevailing language is A is the party acting only in language 14. Such options apply without an agreement under rules such as the
UNCITRAL Arbitration Rules (articles 37, 38);
B entitled to invoke such conflict to obtain the annulment
15. Art.4.
or the non-recognition and non-enforcement of the award?
Subject to a country-by-country legal analysis, it is submit- 16. UNCITRAL Rules, Art.40 (2), ICC Rules, Art.38 (1), ICDR
International Arbitration Rules, Art.34, Swiss Rules, Art.38.
ted that this formulation should not be regarded as generat- 17. Art.40 (2, e).
ing such conflict. In view of the fact that this formulation:
18. For instance, under Art.37 of the UNCITRAL Rules.
i) leaves unaffected the right of each party to present 19. Swiss Federal Tribunal, S.p.A. v. B. AG, 4A, 259/2015.
its case in one of the selected languages; 20. Swiss Federal Tribunal, A.X. Sarl v. Y and Z SA, 4A 42/2016.

ii) allows a tribunal’s interpretation or correction of

each original of the award,18 two tools that could Dr. Guido Carducci (Paris, Rome, London) is a law
solve the linguistic divergence and make the use professor; an attorney-at-law; International Tenant and
of the prevailing language pointless; Arbitrator at 4-5 Gray’s Inn Square (London); Former
Chief, International Standards Section, UNESCO (HQ
iii) does not affect substance, the outcome of the Paris); Chartered Arbitrator (FCIArb). He acts as arbitra-
dispute: whatever the meaning of the award’s tor, expert (witness), legal counsel in commercial, art,
term in the prevailing language (A or B), such investment, disputes. He is a member of the ICC Com-
meaning may be to the benefit of any party, claim- missions on Arbitration, Competition, Commercial Law,
ant or respondent; and and Vice-Chair of the International Arbitration and
iv) does not generate situations that violate the right Litigation Committees, American Bar Association. Email:
to be heard, such as in Swiss international arbitra- gcarducci@noos.fr. Website: carducciarbitration.com.

34 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 Special Feature: Artificial Intelligence
and New Arbitration Data Sources

Artificial Intelligence Challenges and Opportunities for

International Arbitration
By Kathleen Paisley and Edna Sussman

The world is undergoing a technological revolution tension to the fore in new and challenging ways.5 The
that will dwarf the industrial revolution and will disrupt purpose of this article is to consider a few of them.
virtually every aspect of our business and personal lives,
including the manner in which disputes arise and are What Do We Mean by Artificial Intelligence?6
resolved. Artificial intelligence, or “AI,” is the term coined to
describe the general process whereby large amounts of
The centerpiece of the current stage of the technologi- data are combined with powerful iterative data process-
cal revolution is artificial intelligence (AI), which will ing systems and intelligent algorithms, thereby enabling
affect the manner in which: the software to learn automatically from patterns or
• Business is conducted (including block chain, and features in the data. The term AI is often used loosely, and
other disruptive technologies);1 encompasses many subjects including machine learn-
ing, deep learning, neural pathways, BOTs, cognitive
• Transactions are entered into (including smart con- computing, and natural language processing, but it is the
tracts, bitcoin and other distributive mechanisms);2 software’s ability to learn automatically from patterns or
• Disputes are raised and resolved.3 features in the data that makes it “intelligent.”

In these days of rising concerns about the resources It is beyond the scope of this article to discuss AI
and time it takes to decide disputes, artificial intelligence in depth, but simply put it is a technological means to
has the potential not only to reduce the time and cost of employ software and data processing systems to digest
resolving disputes, but by increasing predictability and and analyse large amounts of data using algorithms that
reducing risk, also to discourage unmeritorious claims allow the software to learn as it goes. The potential break-
and to create incentives to settle early. However, at the through for AI as it is applied to the law will be, among
same time, concerns are raised about the impact that other things, the use of cognitive computing to allow AI
artificial intelligence will have on decision making and not only to provide simple answers to questions and pre-
access to justice depending on who has access to its ben- dictions about results, but also more complex reasoning,
efits, the transparency of, and control over, the arbitral and to do so automatically without human intervention.
data and algorithms, including publication of awards At its current stage of development, the efficacy of AI
and potential risks to confidentiality and personal data is highly dependent on the quality of the data processed
protection, to name a few. and the algorithm applied, which dependencies are key to
After a brief introduction to artificial intelligence, we understanding both the potential benefits and risks from
will consider the potential impact of artificial intelligence applying artificial intelligence to international arbitration.7
on international arbitration, with a focus on the potential With digitalization, virtually every piece of informa-
benefits to be gained from reducing uncertainty; the pos- tion addressed in a typical arbitration exists in a digital
sibility for making the arbitral playing field more or less form. This is true of the communications between the
level depending on who has access to AI; and the prereq- parties; between the parties and the institution; among the
uisites to successful implementation of AI, including the arbitrators and/or the institution; the evidence (including
potential benefits to AI from increased access to awards.4 email communications); the names and details of expert
The debate over how artificial intelligence is imple- and fact witnesses and their testimony, the transcript, the
mented in international arbitrations raises some of the communications among the arbitrators, draft awards, etc.
same concerns as the wider debate over the benefits ver- We can think of this as the arbitral micro-data, that
sus the risks of transparency versus confidentiality gener- is, the data that is relevant to a specific dispute and that
ally and of award publication specifically, but the oppor- is addressed by one or both of the parties, the decision
tunities created by the widespread application of artificial maker, and/or the institution in presenting, hearing, and/
intelligence to international arbitration will bring this or deciding a specific case. This can include literally mil-

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 35
lions of data points, and the main use of artificial intel- • Likely range of a cost award generally, and with a
ligence today is to analyse and use arbitral micro-data particular decision maker, and
more efficiently and effectively.
• Facts about opposing counsel, including their ex-
Then there is the arbitral macro-data, that is, the perience in particular matters and before particular
information about the dispute resolution process and decision makers.
its outcome, which for the most part is contained in the
When they come to fruition, the common benefit in
award(s), including who acted as counsel, the arbitrators,
all of these more advanced uses of AI to predict results in
the outcome of the dispute, the rationale for the decision,
arbitration is that they will reduce the uncertainty inher-
the damages theory, the damages method, the valuation,
ent in any dispute resolution process. While there are
etc. For ease of reference, we will equate arbitral macro-
obviously other non-economic factors at play in disputes,
data with awards as this is the most important piece of
reducing the uncertainty about the outcome will both
information about arbitral outcomes.
reduce the pursuit of unmeritorious claims and allow dis-
While the application of artificial intelligence to putes to be settled more quickly when they do arise, with
arbitral awards is in its infancy and will be a complex the consequent positive economic and social impact.
process, it is uniformly predicted that over time artificial
intelligence will be applied to slice and dice data and to What Are the Potential Merits of AI in International
predict trends and outcomes that will forever change the Arbitration Cases?
basis on which disputes are brought and the manner in When arbitration ensues, AI also holds out the prom-
which they are decided. However, this requires access to ise of changing the way that cases are prepared, includ-
the arbitral awards containing the necessary information ing, among other things, enabling parties to:
to make these predictions.
• Pick arbitrators based on likely results;
How Is AI Applied Today to Arbitral Micro-Data? • Make arguments that are more likely to be success-
The main use of artificial intelligence in arbitration ful with those arbitrators;
today is to review increasingly vast amounts of digital
arbitral micro-data held by parties and their counsel in • Reduce the time and cost of legal research and data
order to determine what is relevant to the case and then analytics, and
to analyse that data and present it in a more effective • Plan more realistic budgets, among many other
manner. This use of AI to process arbitral micro-data has, things.
and will increasingly, help to correct the cost and time
problem created by the digital data at issue in complex What Policy Implications Does This Have for the
disputes today—hence, as is often the case, technology Arbitral Playing Field of the Future?
may eventually help solve the problem it largely created If AI is widely available at an affordable price, it has
because of digitization.8 But the gateway to having these the potential of providing more arbitral actors increased
benefits is having access to the systems, the data, and the access to information about their chances of success, their
ability and processing power to use them.9 best strategy for success, what arbitrators to select, and
How Will Artificial Intelligence Reduce Arbitral other issues allowing them to participate in the process
Uncertainty? on a more equal footing at a lower cost through technol-
ogy.10 However, this promise of AI will only be realized if
Looking forward, one new frontier contemplates
all actors have reasonable access to AI systems based on a
expanding the use of AI to analyse arbitral awards to
reliable data set at a reasonable cost, failing which it will
undertake actual legal reasoning and to provide reasoned
have the opposite effect of making the playing field even
advice about how companies and legal arguments have
less level.
fared in the past, how arbitrators have decided issues,
and how damages have been approached. It is therefore important to ask ourselves upfront how
AI will develop and will it be done in a way that fosters
This means that, for example, AI offers the potential
or restricts participation? Who will have access to the
of predicting results in advance including, for example:
necessary systems and data required to use the predictive
• Chances of success generally, and with a particular capacity of AI to reduce litigation/arbitration risk? What
decision maker; will the cost of access be? For which purposes? Will this
access effectively be available only to large law firms, liti-
• Likely range of damages generally, and with a
gation funders, corporations, and insurers, or will means
specific decision maker;
be developed to allow this data to be collected and these
• Timing to decision before a particular institution, services to be performed at a cost that permits the benefits
and before a particular decision maker; to be felt more broadly in both developed and develop-
ing countries and by both small and large players in cases
• Likely costs to be incurred;

36 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
of varying size? Who and how will the algorithms be of access to awards and the decentralization of the data
developed? Who will have access to them? Will access to points, among others.
awards and other arbitral macro-data be open or closed?
What impact will this have on data protection and pri- What Challenges Does AI Face in Using Awards to
vacy interests? Predict Results in International Arbitration?
One of the hallmarks of international commercial
These are difficult questions. International arbitration arbitration is that arbitral awards in commercial cases
repeat-players have previously had unique advantages are not published.14 In contrast, in investor-State arbitra-
in picking arbitrators, knowing what arguments to make, tion before the International Centre for the Settlement
and predicting outcomes. This first-hand knowledge of Investment Disputes (ICSID), maritime arbitration by
based on personal experience will always have significant the Society of Maritime Arbitrators (SMA), and sports
value, but data that holds various aspects of those experi- arbitration by the Court of Arbitration for Sport (CAS),
ences when incorporated into a more complete data set unredacted awards are published in many instances.
and using highly sophisticated technology, computing
power, and intelligent algorithms can enable others to It is beyond the scope of this article to provide com-
capture much of that specialized knowledge. plete information about the practices of international
arbitral institutions with respect to the publication of
The insights AI offers already allows companies to selected awards in a redacted or summary form. The
search legal data from courts (including the US Supreme International Court of Arbitration of the ICC (ICC), Inter-
Court) and to provide customers with predictions about, national Centre for Dispute Resolution (ICDR), Singapore
among other things, how a particular judge or court is International Arbitration Centre (SIAC), the Stockholm
likely to rule on a particular issue, time to decision before Chamber of Commerce (“Stockholm Chamber”), and
that judge or that court, and opposing counsel’s suc- the Milan Chamber of Arbitration (“Milan Chamber”)
cess before that judge or court.11 The AI conclusions are publish redacted versions of selected awards usually with
reported to be remarkably accurate and often at a cost party and possibly tribunal permission and typically ex-
significantly lower than the countless hours a young cluding the names of arbitrator, parties and counsel, and
lawyer would have to spend finding and attempting to the ICC publishes summaries of cases also excluding the
analyse all the inputs. Thus, AI may serve to revolution- names of parties and arbitrators and has started to sepa-
ize the current disequilibrium in resources between par- rately publish the names of arbitrators sitting in their cas-
ties who can afford the many lawyer hours such analysis es. The LCIA and the Stockholm Chamber, among others,
may require and those who cannot. publish selected decisions on arbitrator challenges with
But transformation requires not only that access the names of the parties, counsel and arbitrators redacted,
to the necessary AI technology systems be offered at a and the ICDR has recently announced that it will publish
reasonable cost, but also access to the data across a broad international challenge decisions as it has done in the past
range of disputes. Thus far, the roadblock to the use of AI for domestic decisions.15 The Hong Kong International
to undertake reasoning and more sophisticated analysis Arbitration Centre (HKIAC) and the Swiss Chambers
has been the requirement for manual extraction and orga- Arbitration Institution (SCAI) do not proactively publish
nization of the data input by humans, but text analytics any awards or decisions, but allow for publication to be
is changing that by allowing information to be extracted requested subject to consent requirements.
automatically.12
The following chart provides a useful summary on
However, this requires the data from which this is the publication practices of the commercial arbitration
extracted—in this case arbitral awards—to be available to centers:16
be analysed.
No publica- Se- Selected awards Full
In a cognitive computing paradigm … tion, but lected with Redaction awards
the knowledge is embodied in the corpus it can be Sum-
of the texts from which the program ex- requested maries
tracts candidate solutions or solution ele- HKIAC, ICC ICC, ICDR (soon to ICSID,
ments and ranks them in terms of their SCAI include challenges), CAS (ap-
relevance to the problem. This assumes LCIA (challenges peals
of course that an available corpus of to arbitrators only), from in-
texts contains information relevant to Milan Chamber, stitutional
the type of problem.13 SIAC, Stockholm awards
This requirement that a sufficient “corpus” of read- Chamber (including only),
ily available texts exists is not straightforward in the case challenges) SMA
of arbitral awards for a variety of reasons, including lack

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 37
 Arbitral institutions have also begun to publish of award drafting, issue conflict creeping into commercial
studies of the time and cost of proceedings under their arbitration, procedural paranoia increasing and impact-
rules, and the AAA has conducted a study comparing ing the written product, and further risks of unintentional
the length of time in arbitration to U.S. federal courts and release of confidential information and data protection
the consequent cost to the parties of the longer time to concerns.22
resolution in court.17
The currently available data set of unredacted awards
The growing need for the information contained in including the additional data identification of arbitrators,
arbitral awards has also led several organizations to start parties, and counsel is generally limited to those cases
developing databases that provide arbitration related where the award is enforced and becomes public or one
information. The three best known at this time are all of the parties makes it public. This means that even where
featured in this issue. unredacted awards are available, the process of obtaining
or accessing them on a continuous basis across hundreds
• Arbitrator Intelligence18 will make available re-
of jurisdictions and many arbitral institutions is cumber-
sponses to detailed surveys to be completed by ar-
some, time consuming, and expensive. This decentral-
bitration users who will report on their experiences
ization of available arbitration awards and the multiple
with specific arbitrators. Arbitrator Intelligence has
platforms on which awards are lodged creates additional
also collected almost 1,400 arbitral awards from
hurdles and may limit the ways that AI can be employed
jurisdictions around the world, which it intends to
in arbitration in the near term, thus potentially decreasing
make available in some form.
its efficacy and increasing costs.
• Dispute Resolution Data19 collects arbitration-relat-
Further, to the extent that one key aspect of AI would
ed data from critical sources including most of the
be geared at predicting future arbitrator behaviour, de-
major international arbitration institutions.
veloping the data is not the only impediment to a mean-
• Global Arbitration Review Arbitrator Research ingful AI analysis because of the impact of the typical
Tool (GAR ART)20 provides information about three-person tribunals on the predictive ability of AI. For
individual arbitrators which includes individual ease of use, the AI expectation may be that the chair was
arbitrator’s own responses as to their procedural the decision maker and the result attributed to him or her
preferences and practices as well as providing for purposes of predicting results in future cases, whereas
names of counsel who have appeared before the in fact the other tribunal members are likely to have had
arbitrator and arbitrators with whom they have sat an impact, often a determinative one on the outcome,
on an arbitration panel. especially with respect to the reasoning provided. On the
other hand, attributing the result equally to all tribunal
While all this data is helpful in gaining a deeper un- members would presume that each of them would have
derstanding of the commercial arbitral process, the cur- reached the same conclusion on his or her own or as chair,
rent lack of access to the full reasoning of the award and which may not the case (again, particularly with respect
the names of the arbitrators, experts, and counsel makes to the reasoning). The algorithms will no doubt find a
it insufficient for various aspects of AI analysis. solution for this, but it remains a challenge.
On the other hand, while it is beyond the scope of The lack of an easily accessible data set, decentralized
this article to address how data protection will impact decision making, and other characteristics of interna-
international arbitration, access to awards requires recon- tional arbitration may increase the upfront and on-going
ciliation with the GDPR and other data protection laws costs and time required to use AI to predict outcomes in
(the application of which may also further increase the international arbitration. This may slow the adoption rate
importance of confidentiality during the processing of for AI for international arbitration as service providers
personal data during arbitrations). grapple with these issues, making it less accurate at least
This means that, while full unredacted awards would at the outset, and more expensive.
obviously be preferable for AI, data protection and other On the other hand, when a full arbitral award is
concerns may favor redaction of personal data. However, available or can be made available, the material available
even if the names of the parties and any individuals were to process is often more complete than court decisions be-
omitted, the predictive ability of AI would be greatly cause arbitrators decide the whole case (unlike US judges
enhanced if awards were available including the full where juries often reach the final result) and provide a
reasoning and the names of the arbitrator(s), counsel, fully reasoned decision addressing all issues (unlike most
and experts, who typically could give their permission in lower courts, especially in civil law countries, where court
advance to disclosure.21 Of course, parties would have to decisions can be sparse).
be able to refuse publication, and public access to awards
including arbitrator names raises many other issues, Moreover, the prevailing use of international arbitra-
including the potential for increasing the time and cost tion to resolve the vast majority of complex, high value

38 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
trans-border disputes means the incentive to make AI blicationofInternationalArbitrationAwardsandDecisions.pdf
work well for international arbitration is very high. This (“NYCBA Publication of Awards”).
would be expected to create an increased push for arbitral 6. For an understandable explanation of the technology behind AI,
see Ashley supra fn. 3.
awards to be made more available, which, coupled with
the fact that confidentiality may not be as critical to us- 7. The authors note the serious debate about the need for
transparency and ethical considerations posed by the application
ers as previously understood,23 may further the trend
of artificial intelligence generally and to the law specifically, which
towards transparency of awards. is being spearheaded by the AI Initiative of the Future Society at
the Kennedy School at Harvard, the considerations of which are
What Does This Mean for the Future of Artificial beyond the scope of this article. See ai-initiative.org.
Intelligence in International Arbitration? 8. The authors note that this is not the same issue as the amount of
Whether we like it or not, artificial intelligence is disclosure, as parties must first apply these processes to their own
going to play a major role in international arbitration in data before addressing any data from the other side.
the near future. The amounts at issue are too high and the 9. The coming into force of the European Union General Data
benefits from artificial intelligence too great to avoid it. Protection Regulation will impact the processing of the personal
data at issue in complex disputes. It is beyond the scope of
Al has significant potential benefits for international this article to address data protection, except to say that the
protection of personal data will become increasingly important
arbitration, but as members of the international arbitra-
to international arbitration. See Regulation (EU) 2016/679 of
tion community we must ask ourselves for whom, at the European Parliament and the Council of 27 April 2016 on
what cost, and how this might impact international arbi- the Protection of Natural Persons with regard to the Processing
tration more generally in ways that may not be obvious. of Personal Data and on the Free Movement of Such Data,
and repealing Directive 95/46/EC (General Data Protection
This article only scrapes the surface of the competing Regulation) Official Journal L 119/1 (4.5.2016) (GDPR).
concerns raised by the use of AI in international arbitra- 10. These issues are closely related to those made in favour of
tion and the authors expect these questions to lead to increased transparency generally that are discussed in the NYCBA
healthy debates among the international arbitration com- Publication of Awards, supra fn. 5.
munity for many years to come, but the potential benefits 11. See, e.g., M. Hutson, Artificial Intelligence Prevails at Predicting
and risks that artificial intelligence poses for international Supreme Court decisions, Science Magazine (May 2, 2017), http://
www.sciencemag.org/news/2017/05/artificial-intelligence-
arbitration merit the debate. prevails-predicting-supreme-court-decisions.
12. See Ashley supra fn. 3 at p. 5.
Endnotes 13. Id. (emphasis added).
1. See, e.g., Don and Alex Tapscott, Blockchain Revolution: How the 14. This discussion is derived from the NYCBA Publication of
Technology Behind Bitcoin Is Changing Money, Business, and Awards, supra fn. 5, published in 2014. The authors note that
the World (2016); Melanie Swan, Blockchain: Blueprint for a New this discussion is limited solely to publication of awards, not the
Economy (2015). confidentiality of the process.
2. See, e.g, Andreas M Antonopoulos and Gavin Wood, Mastering 15. Caroline Simson, The American Arbitration Association Sets Agenda
Ethereum: Building Smart Contracts and Dapps (2018); Jeff Read, For 2018, Law 360, January 19, 2018, available at https://www.
Smart Contracts: The Essential Guide to Using Blockchain Smart adr.org/sites/default/files/document_repository/AAA_Sets_
Contracts for Cryptocurrency Exchange (2016). Agenda_For_2018_Law360.pdf.
3. See, e.g., Kevin D. Ashley, Artificial Intelligence and Legal 16. Source NYCBA Publication of Awards, supra fn. 5 (with
Analytics: New Tools for Law Practice in the Digital Age (2017) modifications).
(detailed technical discussion of the application of artificial
intelligence to legal practice) (hereafter “Ashley”); Richard 17. Roy Weinstein, Arbitration Offers Efficiency and Economic Benefits
Susskind, Tomorrow’s Lawyers: An Introduction to Your Future Compared to Court Proceedings; N.Y. Disp. Resol. Law. Vol. 10
(2d ed. 2017). No. 2 (2017); the full study is available at http://go.adr.org/
impactsofdelay.
4. A number of articles have been published recently about the
potential uses of AI in international arbitration, including, 18. See Arbitrator Intelligence at www.ArbitratorIntelligence.org and
for example, Paul Cohen and Sophie Nappert, The March of in this issue see, Catherine Rogers, Arbitrator Intelligence: From
the Robots, Global Arbitration Review (Feb. 15, 2017), http:// Intuition to Data in Arbitrator Appointments, N.Y. Disp. Resol. Law.
globalarbitrationreview.com/article/1080951/the-march- Vol. 11, Issue 1 (2018).
of-the-robots; Jose Maria de la Jara, Alejandra Infantes, and 19. See Dispute Resolution Data at http://www.
Daniela Palma, Machine Arbitrator: Are We Ready? Kluwer disputeresolutiondata.com/and in this issue see, Brian Canada,
Arbitration Blog (May 4, 2017), http://kluwerarbitrationblog. Debi Slate and Bill Slate, A Data-Driven Exploration of Arbitration as
com/2017/05/04/machine-arbitrator-are-we-ready/ (hereinafter a Settlement Tool: Does Reality Match Perception? N. Y. Disp. Resol.
“Machine Arbitrator: Are We Ready?”); Jack Wright Nelson, Law. Vol. 11, Issue 1 (2018).
Machine Arbitration and Machine Arbitrators, Youngicca Blog (July
20. See Global Arbitration Review Arbitrator Research Tool at https://
28, 2016), http://www.youngicca-blog.com/machine-arbitration-
globalarbitrationreview.com/arbitrator-research-tool; and in this
and-machine-arbitrators/.
issue see David Samuels, The Unusual Suspects—Easier to Find with
5. For a discussion of the pros and cons of publishing commercial GAR’s ART, N.Y. Disp. Resol. Law. Vol. 11, Issue 1 (2018).
arbitration awards see, New York City Bar Association,
21. Of note in this regard is SIAC, which currently provides in its
International Commercial Disputes Committee, Publication of
form appointment document for arbitrators to indicate whether
International Awards and Decisions, February 2014, available at
https://www2.nycbar.org/pdf/report/uploads/20072645-Pu

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 39
 their names can be included in published redacted awards arbitrator and counsel based in Brussels and London
and provides for the arbitrators to assign any copyright to the with strong ties to New York and Miami. She has exten-
institution.
sive experience in IP, technology and data, including
22. For a discussion of the pros and cons of publishing commercial advising on the complex data-related issues affecting
arbitration awards see, NYCBA Publication of Awards, supra fn. 5,
published in 2014; see also Kim Landsman, Book Review, The Rise international arbitration, and sophisticated damage cal-
of Transparency in International Arbitration: The Case for Anonymous culations and valuations. (JD Yale 1986), CPA exam (Fla.
Publication of Arbitral Awards, N. Y. Disp. Resol. Law., Vol. 7, Issue 1987), MBA in Finance (FAU 1984)).
1 (2014), reviewing a collection of essays compiled by the Milan
Chamber of Arbitration and the Law School of the University
Edna Sussman, www.SussmanADR.com, is an inde-
Carlo Cattaneo-LIUS.
pendent arbitrator of complex international and domes-
23. Queen Mary School of Law and White & Case, 2010 International
Arbitration Survey, p. 29, available at http://www.arbitration.
tic disputes. She previously served as the chair of the
qmul.ac.uk/docs/123290.pdf (“The responses indicate that New York State Bar Association’s Dispute Resolution
confidentiality is important to users of arbitration, but it is not the Section and now serves as the chair of the AAA-ICDR
essential reason for recourse to arbitration.”). But the authors note Foundation and as first vice-chair of the New York Inter-
that this could change as data protection compliance becomes national Arbitration Center.
more important.

Kathleen Paisley, www.amboslaw.be, a U.S. na-

tional, is a New York and D.C. qualified, international

N E W Y O R K S TAT E B A R A S S O C I AT I O N

“Pro Bono in
Your PJs”
Log onto
NY.freelegalanswers.org
and sign up to be a
volunteer today!

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Contact Kristen Wagner
Director, Pro Bono Services, NYSBA
kwagner@nysba.org | 518.487.5640

40 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
Arbitrator Intelligence: From Intuition to Data in
Arbitrator Appointments
By Catherine A. Rogers
In virtually every sector of modern business, data is Arbitrator Intelligence (AI) seeks to solve these
enhancing if not replacing intuition as the basis for mak- problems by bringing data-driven analysis to arbitrator
ing decisions. This trend holds even for assessments as appointments. The means to these ends is the recently
seemingly subjective and rariefied as predicting the qual- launched Arbitrator Intelligence Questionnaire, or AIQ.
ity—and hence price—of an exquisite French Bordeaux.1
The AIQ
”[A]d hoc individual research largely The idea behind the AIQ is simple. The AIQ seeks
confines assessment of potential to replicate, through systematically collected feedback,
the same kind of information currently sought through
arbitrators to feedback from a limited person-to-person inquiries. Data from the AIQ will not
number of individuals.” eliminate altogether the value of individualized ad hoc
inquiries, but it will allow parties and counsel to tap into
In selecting international arbitrators, however, intu- the collective intelligence of the global international arbi-
ition still predominates. For example, a recent industry tration community.
survey by Berwin Leighton Paisner found that the most
important qualities in selecting an arbitrator are identi- The AIQ is designed for parties, in-house coun-
fied as “expertise” (according to 93% of respondents) and sel, external law firms and even third-party funders to
“efficiency” (according to 91%).2 Expertise and efficiency, complete at the end of each arbitration.3 The web-based
however, are not easy to measure or quantify. questionnaire asks a number of background questions
about the case, and then inquires about a number of
These qualities are not data or credentials that are features that are relevant for future arbitrator selection.
listed on arbitrators’ CVs. Instead, expertise and efficien- For example (to paraphrase a few questions from the
cy are cumulative, largely intuitive assessments that are AIQ): Did the arbitrators grant document production? If
drawn from a number of sources and metrics, which may so, what standard did they use? Did the arbitrators ask
vary from case to case depending on a client’s needs. questions that demonstrated familiarity with the record?
Did contract interpretation in the award reflect a plain
Given the confidential nature of arbitration, gather-
meaning analysis of the words in the contract? Or did it
ing the relevant information means personal phone calls
consider the drafting history? Or did it seek to adopt a
with individuals who have appeared before a potential
more flexible interpretation to achieve fairness and equity
arbitrator or, better yet, sat as a co-arbitrator with that
in the outcome of the dispute?4
person. This kind of ad hoc individual research largely
confines assessment of potential arbitrators to feedback
from a limited number of individuals. Despite this lim- ”Achieving systematic completion of
ited scope, ad hoc research can be time-consuming (and
therefore costly), but not always reliable. Without broad
AIQs is Arbitrator Intelligence’s biggest
data against which to evaluate these inputs, however, it is challenge. To that end, AI is entering into
impossible to determine whether the feedback is broadly collaboration agreements with various
representative, readily transferrable to the case at hand, arbitral institutions around the world.”
or just an outlier.
Another problem with ad hoc information gathering As a practical matter, the AIQ is divided into two
is that it creates an information bottleneck. Newer and phases, and each phase can be completed in 10 minutes or
more diverse arbitrators cannot readily develop interna- less. Phase I concentrates on objective background infor-
tional reputations as long as personal references are the mation about the case, and can be completed by anyone
primary means for determining expertise and efficiency. who has access to the award or case file. Phase II contains
This informational bottleneck is increasingly intolerable questions that relate to the conduct of the arbitration and,
in light of concerns about the lack of diversity among in some instances, seek professional assessments. As a
international arbitrators and in-house counsel with consequence, Phase II should be completed by an attor-
corporate benchmarks to meet, and greater pressure to ney or party who actively participated in the proceedings.
find, newer arbitrators about whom there is a scarcity of Certain background information from Phase I questions
information. automatically prefills the relevant questions in Phase II to
make it even faster to complete.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 41
 In developing the questions for the AIQ, AI em- Figure A (based on hypothetical data—for illustrative
ployed state-of-the-art survey design (in coordination purposes only)
with the Penn State Survey Research Center), as well as
extensive public and expert input. The ultimate goals
were multiple and ambitious: to ensure quality feed-
back; to avoid questions that even implicitly preferenced
certain cultures or legal traditions; to ensure fairness to
arbitrators, and to promote systematic responses.
Achieving systematic completion of AIQs is Arbitra-
tor Intelligence’s biggest challenge. To that end, AI is en-
tering into collaboration agreements with various arbitral
institutions around the world. Under these agreements,
institutions agree to forward the AIQ to parties and
lawyers at the end of each arbitration, and in exchange
AI will give collaborating institutions free access to AI
Reports (see below).
To date, AI has formally entered into such agree-
ments with a few institutions (such as Singapore Interna- This basic chart provides a systematic comparison of
tional Arbitration Centre and AM-CHAM Quito), and is the arbitrator’s historical practice in granting document
in discussions with more than a dozen other institutions. production (the light gray bars to the right), as compared
with the document production practices of all arbitrators
So watch for emails coming to you from arbitral institu-
in the sample oil and gas cases (the dark gray bars to the
tions at the end of your arbitration!
left).6
AI is also inviting parties and law firms to support it
There are several advantages to this approach over ad
by signing The Arbitrator Intelligence Pact.5 By signing the
hoc individual inquiries, or self-reporting by arbitrators.
AI Pact, parties, law firms, individual counsel, arbitrators,
First, when asked to comment on their own practices,
arbitral institutions, and arbitration organizations com-
most arbitrators explain that their approach will vary de-
mit to supporting AI’s goals of transparency, accountabil-
pending on the type of case. This chart examines disputes
ity, and diversity by helping to promote completion of within a particular industry (oil and gas), but it could
AIQs regularly at the conclusion of arbitrations. alternatively evaluate the data based on case size, applica-
Notably, one of the world’s leading law firms has not ble law, or some combination of these or other variables.
only signed the Pact, but also agreed to provide retro- Even more importantly, Figure A above and Figure
spective AIQs on cases completed in the last few years. B below demonstrate the benefits of assessing individual
AI is currently in discussions with several other firms cases in comparison to a baseline of data in similar cases.
that are also considering providing retrospective AIQs.
AIQ data is essential for AI to develop AI Reports, so
consider joining these industry leaders by completing Figure B (based on hypothetical data—for illustrative
AIQs on recently completed arbitrations. purposes only)

Once sufficient information has been collected

through the AIQ, Arbitrator Intelligence will begin pub-
lishing AI Reports, through its partner WoltersKluwer.

Arbitrator Intelligence Reports

AI Reports are still in the development phase, and
the nature and scope of AI Reports will inevitably evolve
over time, particularly as AI’s base of data expands. Nev-
ertheless, it is already easy to see from some preliminary
mock-ups how AI Reports will help promote more data-
In Figure B, the y-axis indicates how many days an
driven decisions about arbitrator appointments.
award is rendered after close of proceedings (defined in
By way of preview, consider the following chart the AIQ as the last day of hearings or the day of the last
regarding a (hypothetical) arbitrator’s approach to docu- post-hearing submissions). The x-axis indicates the size
ment production: of the case as a proxy for complexity (on the assumption
that more time is needed to draft awards in more complex
cases). The slope shows the relationship between amount

42 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
at stake and length of hearing for all arbitrators presid- cal research in international arbitration, data analytics in
ing in oil and gas cases in the sample.7 Each x is a case the legal profession, mass data collection and strategic
decided by the arbitrator of interest. decision-making, econometrics, artificial intelligence, and
information systems.8
Like Figure A above on document production, the
independent baseline in Figure B (the blue line) provides In addition to its Board of Directors, AI also has
a valuable check against mistaken assumptions about a Board of Advisors that brings to the project diverse
the representativeness of performance in a particular perspectives from among in-house and external counsel,
case. For example, by luck of the draw, ad hoc research leading arbitrators, institutional representatives, and aca-
may reveal two examples of cases in which an arbitra- demics specializing in international arbitration.9
tor rendered awards more than 200 days after the close
of proceedings. Based on this feedback, a client may
Conclusion
conclude that this arbitrator is simply too slow and thus
disqualified from consideration. But that assessment may When Arbitrator Intelligence was first conceived,10
be different if broader data reveals that only a few of the major law firms stated (unabashedly!) that they hoped
arbitrator’s awards took longer than 200 days or that, this project would fail. AI would be seeking to gather
depending on the size of the case, a 200-day time frame is and make widely available information that they sold
well within the norm for all similar cases. to their clients, information that signaled their value-
added expertise, information that distinguished them
from lesser competitors. And they did not want the
”Arbitrator Intelligence will liberate competition.
arbitrator selection from the 19th Today, given the size and complexity of the market,
Century’s telephone and introduce it to the reaction is quite different. Even the leading law firms
the 21st Century’s data-driven analytic with the largest networks for collecting information
solutions.” recognize that there is no such thing as “enough informa-
tion” about arbitrators. In-house counsel are increasingly
demanding more than mere intuition to justify arbitrator
These charts and graphs are prototypes for off-the-
appointments. They want concrete data and analysis that
shelf AI Reports and, again, are based on hypothetical
their colleagues use in making other business decisions
data. AI Reports will provide numerous forms of data
and that they will especially need if they have to explain
analysis on various topics, and the range will inevitably
an unexpected result to management. Even arbitral insti-
grow and develop over time as more data is generated.
tutions, which also appoint arbitrators, increasingly need
In the future, AI also anticipates being able to pro- more information to optimize their appointments and
duce customized reports as more data is available. For remain competitive.
example, in some cases, the ability to obtain (or avoid)
For those of us who enjoy drinking good wine, but
document production may be the lynchpin of a party’s
not necessarily investing in wine futures, we may still
strategy. In that case, a party may want a bar chart similar
prefer the tasting notes of well-known aficionados and
to the Figure A above, but instead one showing the three
recommendations from a sommelier’s tastevin. But for
arbitrators on its shortlist.
parties selecting the individuals who will pass judgment
Of course, AI Reports will identify the limitations of on their most important disputes, precision is critical and
the data, particularly in production of early AI Reports. should not be left to intuition alone. Arbitrator Intel-
More generally, there are a number of challenges in ligence will liberate arbitrator selection from the 19th
analyzing data from phenomena as complex as arbitral Century’s telephone and introduce it to the 21st Century’s
disputes. Such challenges include accounting for differ- data-driven analytic solutions.
ent institutional rules, differences in appointment of the
arbitrator (was the arbitrator party-appointed, or sitting Endnotes
as a chair or sole arbitrator?), and changes in data and to 1. As Ian Ayres notes in his book Super Crunchers: Why Thinking
arbitration practice over time. by Numbers Is the New Way to be Smart (2007), Orley
Ashenfelter’s data-driven analysis of wines made more accurate
As an academically affiliated entity, however, Arbi- predictions than renowned wine critic Robert Parker on an ’86
trator Intelligence is uniquely positioned to meet these vintage, and Ashenfelter’s wild card predictions on ’89 and ’90
complex challenges. AI’s Board of Directors will oversee wines also turned out to be surprisingly accurate.
development of the AI Reports and the software needed 2. Carol Mulcahy, Diversity on Arbitrator Tribunals: Are We Getting
to generate them. The board is composed primarily of There?, available at http://www.blplaw.com/expert-legal-
insights/articles/diversity-on-arbitral-tribunals-are-we-getting-
university professors who collectively possess the essen-
there (January 12, 2017), last accessed January 26, 2018.
tial range of expertise in relevant fields, including empiri-

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 43
3. Notably, arbitrators and arbitral institutions are not invited to
complete AIQ because of confidentiality concerns. For more
information about how AI protects confidentiality, see Frequently
N E W Y O R K S TAT E
Asked Questions about the AIQ on our website: http://www. B A R A S S O C I AT I O N
arbitratorintelligence.org/aiq-frequently-asked-questions/.
4. These exemplars paraphrase questions in the actual AIQ, a
static version of which is available on the Arbitrator Intelligence
website: http://www.arbitratorintelligence.org/. CONNECT
5. Text of the Pact and the form for signing on can be found at
http://www.arbitratorintelligence.org/arbitrator-intelligence-
pact/.
WITH NYSBA
6. The categories in this graph are based on questions in the
AIQ, which are in turn based on the IBA Rules for the Taking
of Evidence in International Arbitration and follow a series of Visit us on the Web:
questions about whether document production was granted and
by which part(ies). www.nysba.org
7. The blue line is derived from an ordinary least squares (OLS)
regression with length of hearing as the dependent variable and

8.
amount at stake as the independent variable.
Members of the AI Board of Directors include Chris Drahozal
Follow us on Twitter:
(empirical research in international arbitration), Chris Zorn
(data analytics in the legal profession), Scott Gartner (mass
www.twitter.com/nysba
data collection and strategic decision-making), Lee Giles
(artificial intelligence and information systems), and Johannes
Fedderke (econometrics). For more information about the
AI Board of Directors, visit the AI website at: http://www.
Like us on Facebook:
9.
arbitratorintelligence.org/board-of-directors/.
Details about AI’s Board of Advisors can be found at http://www.
www.facebook.com/
arbitratorintelligence.org/about/board-of-advisors/.
nysba
10. Catherine A. Rogers, The Vocation of International Arbitrators, 20
Am. U. Int’l L. Rev. 957 (2005), available at https://papers.ssrn.
com/sol3/papers.cfm?abstract_id=691470.
Join the NYSBA
Catherine Rogers is the Founder of Arbitrator Intel-
ligence, Professor of Law at Penn State Law, and Profes-
LinkedIn group:
sor of Ethics, Regulation, and the Rule of Law at Queen www.nysba.org/LinkedIn
Mary, University of London. Professor Rogers is a
Reporter for the American Law Institute’s Restatement
of the U.S. Law of International Commercial Arbitra-
tion and co-chair of the ICCA-Queen Mary Task Force
on Third-Party Funding. She is a frequent speaker and
advisor globally on issues relating international arbitra-
tion. She can be reached at car36@psu.edu.

SAVE THE DATE!

New York State Bar Association and Westchester
County Bar Association’s Dispute Resolution Sec-
tions invite you to join them at their Social Event:
April 25, 2018 | 6:00 p.m. – 8:00 p.m.
Yonkers Brewing Co. | 92 Main Street, Yonkers, NY
Cost: $20. Includes One Complimentary Glass of Wine
or Beer and Hors D’oeuvres.

44 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
A Data-Driven Exploration of Arbitration as a Settlement
Tool: Does Reality Match Perception?
By Brian Canada, Debi Slate and Bill Slate

Arbitration as a Settlement Tool: Costly and Of the approximately 3,800 total cases in the DRD da-
Slow? tabase, about 3,500 (92%) represent international commer-
As an alternative dispute resolution (ADR) mecha- cial arbitration cases. A high-level summary of these cases
nism for reaching settlement, arbitration is not without is presented in Figure 1. All data represented herein are
its critics, particularly when it comes to time and money current as of December 2017. Overall, approximately half
spent. According to the 2015 International Arbitration Sur- (52%) of all arbitration cases ended in settlement, with the
vey: Improvements and Innovations in International Arbitra- remaining cases divided up among outcomes including
tion,1 respectively 68% and 36% of survey respondents an award being rendered (33%), administrative closure
indicated “cost” and “speed” as being one of the three (6%), withdrawal (6%), dismissal (1%), with the remaining
worst characteristics of international arbitration, and con- 2% of cases having other or unspecified outcomes.
versely, respectively 2% and 10% of respondents listed
“cost” and “speed” among international arbitration’s
three most valuable characteristics. These complaints
underscore similar perceptions and concerns regarding
the costs of arbitration, as explored in Law and Practice of
International Commercial Arbitration (4th edition).2
If the perception of a protracted duration and high
cost of arbitration truly make it a less favorable dispute
resolution mechanism for parties looking to reach settle-
ment, then an analysis of case data should reveal that
most documented arbitration cases would not reach an
early settlement, but rather result in a later settlement af-
ter an oral hearing or by an award. Further, if this percep-
tion holds true, then for those cases that do reach settle-
ment, such an outcome would be reached very late in the
arbitration process, with commensurate associated costs.
Here, we investigate the extent to which these perceived
outcomes are reflected in reality by exploring a compre-
hensive repository of recent arbitration case data collect-
ed and maintained by Dispute Resolution Data (DRD), an
organization providing online, subscription-based access
to aggregated arbitration and mediation case data.
Figure 1. Outcomes of 3,513 Arbitration Cases in the
Dispute Resolution Data repository. All data represented in
Elucidating the True Nature of Arbitration as a this and the remaining figures in this article are current as of
Settlement Tool December 2017.
At the time of this writing, the DRD database con- The DRD database reflects arbitration case types from
tains approximately 190,000 data points, collected across many industrial and commercial sectors, with some sectors
3,800 alternative dispute resolution cases, which reflect more widely represented than others. Presently, the top
categorical and quantitative information that includes four case types, in terms of the number of records entered,
include Commercial Contracts (758 arbitration cases), Hos-
case types, commercial and industrial sectors, geographic
pitality and Travel (450 cases), Wholesale and Retail Trade
regions, various costs and fees, dates of key events, (285 cases), and Financial Services and Banking (237 cases).
outcomes, award amounts, and much more. These data, From Figure 2, we can see that in all but one of these case
collected from arbitration institutions and mediation types, settlement was the most frequent outcome.
organizations through a carefully designed and con-
trolled user interface provided via the DRD website,3 fill While the representations of the arbitration cases in
a long-standing need for greater availability, clarity, and Figures 1 and 2 demonstrate that settlement is not only
possible but also a more likely outcome than any other
transparency of ADR information, particularly for those
case conclusion type, they each nonetheless represent a
parties who are considering arbitration but may not single, “static” view with no regard to the point in the
necessarily understand its true value, especially in light arbitration process at which settlement occurred.
of its perceived cost and duration.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 45
 Figure 2. Outcomes of Arbitration Cases for Top Four four most highly represented case types, we report the
Case Types in the DRD Repository. average length of time (in days) from claim date to settle-
ment for each case type, with the margin of error (also in
days) computed at the 95% confidence level.
When Did Settlement Occur?
For those arbitration cases that ended in settlement,
it is helpful to know the point in the arbitration process
at which settlement occurred, as this serves as a marker
for the potential duration (and, in turn, potential cost)
required to reach this outcome. For each of the arbitration
cases that reached settlement, the DRD data set included
dates of key points in the arbitration settlement process,
including the date on which the claim was filed (hereafter
referred to as the “claim date”), the date of settlement,
as well as other dates as applicable (counter-claim date,
preparatory hearing date, and as well as the starting and
ending dates for any oral hearings). Using these dates,
we determined the point at which settlement occurred
by finding the event with the latest date that preceded
settlement. As shown in Figures 3 and 4, the most recent
arbitration event occurring prior to settlement was most
frequently the claim date, regardless of case type. For
these cases, we computed the number of days from the
claim date to the date of settlement. Box-and-whisker Figure 3. Most Recent Event Occurring Prior to Settle-
plots of these data are reported in Figure 5; for each of the ment, All Case Types

46 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 Figure 4. Most Recent Event Occurring Prior to Settlement, Grouped by Case Type

Figure 5. Distributions of the number of days to reach settlement for arbitration cases in which settlement
occurred prior to any other arbitration events following the initial claim date. For each case type, the X indicates the

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 47
average time from claim to settlement. Stacked boxes among various dimensions in our dataset. For example,
represent the interquartile range (i.e., between the first we plan to examine the effects of both case type (i.e.,
and third quartiles), with the median number of days industrial or business sector, including more specific
represented by the horizontal lines inscribed within each subtypes) and case region (where arbitration took place)
box. Individual outliers are not shown in accordance on the outcome of the case, the time required to reach
with DRD policy to safeguard the interests of our data that outcome, and the associated costs of achieving that
contributors. outcome.

Concluding Remarks and Future Work Endnotes

Our high-level analysis of hundreds of records’ 1. White & Case LLP, 2015 International Arbitration Survey:
Improvements and Innovations in International Arbitration. Available
worth of actual international commercial arbitration online: https://www.whitecase.com/publications/insight/2015-
case data suggests that arbitration has the potential to international-arbitration-survey-improvements-and-innovations.
be an effective settlement tool, given that settlement is 2. Redfern, Redfern, A., Hunter, M., and Blackaby, N. (2004). Law
the most frequent outcome of all arbitration cases in the & Practice of International Commercial Arbitration, 4th edition.
DRD repository, and of those cases that do reach settle- London: Sweet & Maxwell.
ment, the vast majority of cases settle after the claim date 3. http://www.disputeresolutiondata.com.
but before any other significant events in the arbitration
timeline. From Figure 5, it is clear that among the four Brian Canada, PhD, is Founder and Principal of
most highly represented case types (and among those Illustrategy, LLC, a consulting firm focusing on data
cases for which the claim date is the most recent event mining and visualization, software development, and
prior to settlement itself), both the average and median graphic and web design, headquartered in Beaufort,
number of days to reach settlement was under one year, South Carolina. He has served as a data analytics con-
with some variance from one case type to another. sultant to Dispute Resolution Data since 2017.
While the current analysis provided herein does ap-
pear to provide some evidence to show that arbitration Debi Slate is a Co- Founder, President and COO of
can be a mechanism to swiftly reach settlement, further Dispute Resolution Data. She has worked in the ADR/
study and greater transparency of actual case data is nec- ODR field since 1989 and is a former board member of
essary for disputing parties to make the most informed Arbitral Women.
decision possible. As the DRD repository continues to be
populated, we are continuing to apply data analytics to Bill Slate is a Co- Founder, Chairman and CEO of
the data set to identify interest trends and patterns that Dispute Resolution Data. He is the former President
we believe may be useful to those who are evaluating and CEO of AAA/ICDR and a member of the ICCA
different mechanisms for dispute resolution. In forthcom- Governing Board. He consults on international arbitra-
ing published studies, we will show the results of deeper tion related matters.
investigations the potential relationships between and

N E W Y O R K S TAT E B A R A S S O C I AT I O N

DISPUTE RESOLUTION SECTION

VISIT US ONLINE AT
www.nysba.org/DRS

48 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
The Unusual Suspects—Easier to Find With GAR’s ART
By David Samuels

Introducing the Arbitrator Research Tool—A New just that (https://globalarbitrationreview.com/arbitra-

Website by the Publishers of Global Arbitration tor-research-tool). Alas, this is print. So instead here’s a
Review description of how it works.
Have you ever wished you knew who’d seen an
arbitrator “in action”—recently, so you could ask if he How It Works
or she is as good as they used to be (hint: they probably The ART has two modes of use.
aren’t…)?
The first: to find an arbitrator who fits the objec-
tive aspects of a case. Let’s say, for instance, you want a
”...’GAR-ART’...is a site [which] launched female with experience applying UAE law. You set those
in beta form in mid-2017. It consists of parameters in the search and, voilà, you get four names.
many individual arbitrator profiles that You can now explore their individual profiles further.
are highly searchable.”
Or, perhaps you needs someone experienced as a
chair (10+appointments), who also knows Germany as a
Or that you could find out so-and-so’s procedural
seat. You change the criteria to select those. Now you get
preferences, before the first procedural meeting, so you
six names.
can strategize? Or are you just tired of feeling uninspired
when it comes to appointments—knowing there are Used this way, the ART can suggest good people
excellent, well-matched people out there, but you can’t you may not independently think of. And, if you don’t
seem to summon any to mind? know them, it will also help you form an impression of
what they might be like, and how they might approach
Global Arbitration Review’s ‘Arbitrator Research
a case—buttressed by people you could contact for an
Tool’—GAR ART—is here and can help on all three.
eyewitness’s account.
The ART—you say “A-R-T” or “GAR-ART” (vo-
This is the second way to use it: to get a feel for an
calised as a hyphenated ‘word’)—is a site, from GAR,
arbitrator new to you.
launched in beta form in mid-2017. It consists of many
individual arbitrator profiles that are highly searchable, Here you go to an arbitrator’s main page. (Type in
and serves up unique data: ‘relational’ information about the person of interest—and if they’re included, the search
who’s worked with whom that’s not available elsewhere. field will autocomplete.)
In a nutshell, each profile gives you: So, say we are researching a particular individual.
Go to his or her main page. You are now looking at a
• A full CV and breakdown of experience,
large page with the arbitrator’s photo on it. It has four
• A 23-question interview on how the arbitrator segments: contact details (beside the photo); a yellow
approaches cases, and (the secret ingredient in the button that says “Worked with recently”; a section called
shampoo) “Q&A”—blank but with a clickable ‘+’ sign; and then
below that “Data.”
• The names of counsel and arbitrators who’ve seen
this person in action recently and who might be Under Data, you see headings such as gender, na-
contacted for an eyewitness account: the people tionality, languages, number of arbitral appointments
they’ve sat with, or had as advocates, on cases. in the past three years, number of those as chair, seats,
applicable laws, and number of appointments in invest-
At the time of writing, ART is at 200 arbitrators and
ment cases, with the arbitrators’s data for each. All those
growing. It will hit 350 before long, and 600 in time. It is
headings are searchable.
intended to, and does, include the well-known and the
less well known. I suggest you visit the ART A-Z page
(find it via the home page), which lists everybody who is The Procedural Questionnaire
featured in the tool. You will find names you know and What about the arbitrator’s procedural preferences?
names you don’t.
Here you need to click on ‘+’ sign beside “Q&A.” A
At this point, I’d like to show you the ART in action. question and answer section pops open. In this you have
(And there is a video on the ART home page that will do answers to 23 questions on everything from secretaries

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 49
to whether the arbitrator favours skeleton arguments, to Answer: I consider it very important
how they approach mid-case settlement, and costs. to engage with the parties at the out-
set regarding matters of procedure and
Here is an example of the questions and answers.
expectations for timetable. Of course, like
As co-arbitrator—are you in favour of all arbitrators over the years I have devel-
the parties interviewing candidates for oped various procedural suggestions for
chair that you have identified pre-any the parties, depending on the nature of
final appointment? the dispute, but I do not regard these as
one-size-fits-all. I do not have a standard
Answer: Yes, if parties so wish. They “Procedural Order No. 1” that I attempt
should both have the opportunity. to impose across all cases.
What is your preference on the presenta- What is your approach to proposing
tion of evidence? settlement mid-case?
Answer: Witness statements and expert Answer: I do not consider it appropriate
reports, followed by an examination of to inquire into the status of settlement dis-
the witnesses/experts at a hearing. cussions or to suggest such discussions.
What is your approach to counsel mis- If the parties mutually wish to suspend
conduct? Do you prefer to deal with it arbitration proceedings to pursue settle-
then and there or to wait until the end of ment or mediation with other interlocu-
the case? tories, that is fine, but I do not consider it
appropriate that I personally be engaged
Answer: It depends very much on the in that exercise.
nature of the misconduct. To deal with it
in the course of the proceedings requires a What is your approach to identifying
very high degree of diplomacy. potentially dispositive issues early?

What is your usual approach to costs? Answer: In my proposed agenda for

the first procedural session I include an
Answer: (That is a rather broad question.) inquiry to the parties as to (a) whether
Usually, for the allocation of costs I follow they believe there are any issues of law
the general principle that the outcome of (including jurisdiction or arbitrability)
the dispute governs the allocation, unless that are potentially dispositive or might
the applicable rules or very special cir- significantly narrow the issues in dispute
cumstances provide for a different rule. or the scope of factual inquiry, and (b) if
What is a ‘normal’ turnaround time for so, a discussion as to whether such issues
you to deliver an award (assuming no are suitable for resolution as a prelimi-
exceptional circumstances)? nary matter or, based on their factual ma-
trix or otherwise, are more appropriately
Answer: 1-2 months. reserved for resolution as part of the final
award—in each case, taking into account
Would you describe your procedural
the expectation that proceedings should
style as closer to common or civil law?
be conducted with a view to expediting
Answer: A pragmatic mixture of both the resolution of the dispute. I find that
depending of the culture of the parties. It including these questions expressly in
is important to find out what the expec- the first procedural agenda tends to focus
tancies of the parties are.” everyone’s attention at the outset on the
optimal structuring of proceedings, in
All of the ART profiles have this Q&A. light of the particular parameters of the
How arbitrators answer vary. Nobody wants to paint dispute.
themselves into a corner. So the style of answers vary a Before launch, we didn’t give all that much thought to
lot. Some are very terse. Others, such as the arbitrator the Q&A section. We figured it would be useful, but slight-
above, are medium length. Others go into more depth. ly decorative at the same time. Not the case, apparently.
Here’s an example of someone who goes into depth.
Many of our early users have praised the insight on
How much does your approach vary, offer from the questionnaires.
case to case?

50 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 I recall a younger U.S. partner who tested ART before Reactions
launch in particular, who raved about how useful it was. ART went live in a beta form in April 2017. It was an
He had a particular female arbitrator as chair coming up anxious moment. There are so many things you know
in a case, someone he didn’t know (except by name). As you won’t spot until people start using it (hence the beta
he explained, thanks to the ART Q&A, he could tell “she’s approach).
much more of a ‘civil’ lawyer than I would’ve thought.”
As a result he and his team changed their whole ap- People, however, have been very kind in their
proach to the case: “We would’ve got there eventually, judgment.
but it probably saves us six months of making a less than
One of the comments an independent arbitrator who
ideal impression.”
works from Texas tweeted, soon after we gave her access:
The “Worked With” Data “So impressed with the GAR Arbitrator Research Tool.
This is what the industry has been missing.”
You’ve absorbed the Q&A and know the experience.
Now you’d like to hear from someone you know what Another beta tester was also supportive. She told us
this arbitrator is like. This brings us to the final piece of ART could “democratise the access to arbitrators and
the ART jigsaw puzzle: the relational data. facilitate the introduction to lesser known arbitrators,”
and would also be great for projects that require “positive
To bring it up, click “Worked with recently.” A second discrimination.”
page opens, with the names of arbitrators he or she has
chaired or had acted with as co-arbitrator, and counsel Meanwhile, a very senior arbitrator said it could
the arbitrator has seen on cases in the past three years. have value to arbitrators too, where they have to de-
They’re arranged in alphabetical order, in columns. cide who they want on a tribunal, e.g., as chairman. “I
could see this being used to close the gap” between past
Other people will have a column called “chaired reputation and current performance/service levels,” he
by”—listing the arbitrators who’ve been president of said, “because it’s really remarkable the degree to which
their tribunals. If you want to email any of those people, someone’s performance and their reputation can be out of
they’re hot-linked to a professional email address. So an sync.”
email pops open when you click.
The “new” always attracts attention, so it was inevi-
Whether you know any of them depends on your table that the ART would be met with some questions.
own personal network. But the chances are in this field
you do, or you know someone who will. So you’re a step I got to hear some of the concerns first hand.
closer to being able to get that all important first-hand
Around the time we launched, in April 2016, I took
impression.
part in a panel on arbitrator selection at the Corporate
Incidentally, this relational data comes with the fol- Counsel International Arbitration Group—the CCIAG—
lowing disclaimer: annual meeting, held in London.

The information on this page is sourced and

checked by GAR, not the arbitrator. It is ”Anyone who wants to be included in the
presented as a route to additional insight on ART can. The only criteria requirement
the individual. It is not a complete picture of
is that you had some arbitrator
their work. Please use it with respect as set
out in our terms and conditions. appointments in the past three years. It’s
also free.”
In other words, these names are collected by GAR
rather than the arbitrator in question. Nevertheless, as
Discussion of the ART rather took over that part of
you can see it can be pretty comprehensive.
the meeting. There were lots of views. On the negative
And that’s it. side of the ledger, two thoughts predominated. One, won’t
this inspire challenges? And two wait a minute … won’t this
The tour of ART is over. We hope it’s come across as be bad for me and my business? Privileged insight into the
simple, elegant, and easy to use, and similar to what for a arbitrator pool is part of what I’m selling. You’re taking my
lot of people already happens in real life. You can prob- edge away!
ably already think of lots of things you’d add into it if
you could. I’ve heard the same points a few times since.
These days, when the topic of challenges comes up,
I tend to give the same answer as the moderator of my
CCIAG panel gave that day. He said that he has always

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 51
regarded the arbitrator challenge as part of the hygiene for the case” (one of the “unusual suspects” a member of
of the system: if a challenge needs to be made, it needs the audience put it). Several were in-house counsel who
to be made, and there’s little ultimately to be gained by would like to play more of a role in arbitrator selection.
putting barriers in its way. The ART may help them.
It’s hard to put it better than that. At the end of my session I asked the CCIAG audience
for a quick vote on our prospects:
But if I had to add anything it would be: I’m not
a practising lawyer, but simply from first principles, “Who thinks the ART is a net positive?” I started.
it would be hard to bring a challenge using solely the
A majority of the audience, which was about 60
information in the ART. Though it’s useful, it doesn’t
strong, raised its hands.
give you that much relational data to use. It doesn’t show
you, e.g., who appointed whom, or how often a counsel “And who thinks ART may cause more problems
has appeared in front of an arbitrator in the past three than it solves?”
years—the sort of thing you’d need to establish a pattern.
Turning the ART data into a challenge would be a chal- No hands, although a few people abstained.1
lenge. (It would also be against our terms of use and lead
to your being banned from further use. And there may be Where Next?
additional deterrents we could devise.) Anyone who wants to be included in the ART can.
As for the fear it will take business away from es- The only criteria requirement is that you had some
tablished counsel, well, that’s harder to rebuff. Nobody arbitrator appointments in the past three years. It’s also
likes to help their competition, nor should they. But as I free—your only investment will be the time it takes to do
suggested at the CCIAG meeting, I think aficionados of the questionnaire.
arbitration can be a bit more self-confident. If something Feel free to contact me at david.samuels@lbresearch.
is useful to the layman, it’s going to be even more useful com for more information. Ditto if you’d like to join the
to them. I expect ART to make the really good people 70+ firms who now have access to the system, and who
even better. use it every day, among them some of them the largest
At the CCIAG I was asked what the reaction from players in the industry. You have to have a GAR subscrip-
“the frequent flyers” had been. I was candid. Some have tion, but after that the money required is very favourable.
refused to let us include their names. Although we re- Sadly, we cannot offer a per project rate at this point in
serve the right to “go hostile,” since we have our infor- time.
mation double sourced, we haven’t. Right now, including It’s becoming clear that ART is a project that will
them isn’t that important, except to encourage others never truly end. We’re already working on the ART ver-
(and we have enough senior people to accomplish that). sion 2.0, which will have all sorts of extra useful function-
As one naysaying frequent flyer put it—“nobody needs ality. To that end, I’m about to put together a user group/
to get information about me.” He also said he thought it advisory board to guide us. ART version 2.0 will be able
was a “good project—for the others.” to do even more things, such as suggesting arbitrators
Why do those frequent flyers not want in? Where you may want to look at, based on previous searches. And
we’ve had a reason, it’s been: challenges. I have my own there are some other great ideas percolating I’d rather not
view about the authenticity of this reason but now is not say too much just yet. Let’s just say, there may be a way
the place to get into details. I’d like to underline, too, that to do feedback on performance that doesn’t turn you into
not all of the frequent flyers are outside ART. Several are ‘Tripadvisor for Arbitrators’ but is still extremely useful
in, and more are in transit so to speak—they’re complet- (without being burdensome). Watch this space!
ing their Q&As so we can set them live.
Overall, at the CCIAG meeting, the crowd was Endnote
1. For a report on the CCIAG session, see Douglas Thomson, GAR
warm to the ART, with several floor speakers noting the
Arbitrator Research Tool Gets London Grilling, 24 March 2017,
benefits. available at https://globalarbitrationreview.com/article/1138585/
gar-arbitrator-research-tool-gets-london-grilling.
A number of speakers from the floor immediately
got the benefits—that it would be a useful aide memoire;
that it would help to bring good people to fore more eas- David Samuels is editor in chief and publisher of
Global Arbitration Review, as well as a number of its
ily; that it would allow you to find someone who was a
sister publications.
good fit for a case who was not one of the usual suspects
to be found, “that it might help you to appoint someone
you didn’t really know but who was a good fit otherwise

52 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
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 Book Reviews
The College of Commercial Arbitrators Guide to Best
Practices in Commercial Arbitration—Taking a Test Drive
Down the Highways and By-Ways
of Best Practices (4th Edition)
Edited by Jim Gaitis, A. Holt Gwyn, John J. McCauley
and Laura Kaster
Reviewed by Simeon H. Baum

One Law for the Lion & Ox Is Oppression.

William Blake (Marriage of Heaven & Hell)
The College of Commercial Arbitrators is an august These are the late David Brainin and Carroll Neesemann.
group of experienced arbitrators who, over the years, Over 20 years ago, I came to rely on David, in ADR Bar
have done more than gather for self-congratulatory gatherings, to be a consistent voice of balance and intel-
sessions over whiskey and cigars in smoke filled pubs. ligence on any issue that was being addressed by the
Among their varied contributions to the Dispute Resolu- group. Carroll Neesemann, who for years ran Morrison &
tion field is a Guide to Best Practices in Commercial Arbitra- Foerster’s litigation group in New York, was the author-
tion, which the College first issued in 2006. It has now ity on the law of arbitration in any bar group in which I
been reissued in a fourth edition, under the editorial lead- participated. I miss them both. Years ago, Carroll told me
ership of Jim Gaitis, with a trio of fellow editors—A. Holt that, in his view, the best arbitrator in New York was his
Gwyn, John J. McCauley, and our own Laura Kaster—co- dear colleague John Wilkinson, who is also on this list.
editor of NYSBA’s Dispute Resolution Lawyer. NYSBA can be proud to note that both John Wilkinson
Having become aware of this new Guide to Best and fellow contributor Edna Sussmann are past chairs of
Practices, I decided to take it for a test drive. If I were to this Section.
develop a list of tricky arbitration questions that come
up for many of us during our work as arbitrators, would
this Guide be a handy tool? Would it provide a workable
”The result is an effort to gather best
roadmap that would lead the reader to illuminating dis- practices while recognizing variety and
cussion on one’s vexing issue? complexity. The Guide embraces this
I invite you to accompany me on the test drive, and diversity by setting out core concepts and
encourage you to determine whether the Guide drives like procedural issues and sharing contrasting
a Maserati. If it does, you might be inclined to take it for a views in a manner that enables the user
ride yourself. to strike a balance and have a clearer
Before our tour, one might marvel at the resources sense of the range of considerations that
that went into the development of this work. The current should inform decision making on the
volume has 104 contributors,1 all of whom, by dint of
membership in the college, draw on many years of expe-
given issue.”
rience as arbitrators practicing at the highest level of our
profession. A review of these names reveals a Who’s Who Let us now shift focus from the people to their task—
of commercial arbitrators on the domestic and interna- defining best practices in arbitration. Arbitration, even
tional scene. Surely the efforts of this group can generate if narrowed to the commercial zone, is a tremendously
some guiding light. varied field. There are matters of all shapes and sizes, in a
wide array of substantive areas. Parties themselves have
Of particular pride is the number of members of widely varying wishes for the dispute resolution process
NYSBA’s Dispute Resolution Section2 who are in their when they opt to go for arbitration. Some seek speed, ef-
ranks—approximately 25 percent by my count. While I ficiency, low cost and informality, while others might wish
would choose not to offend by identifying some and not to preserve due process protections, discovery opportuni-
mentioning well-deserving others, I must highlight two ties, and even application of governing law or opportuni-
contributors whose inclusion is particularly affecting. ties for review that result in processes antithetical to those

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 55
envisioned by this first broadly described group. Counsel (Chapter 6); motions (Chapter 7); discovery (Chapter 8); a
drafting arbitration clauses or representing parties in newly minted chapter on summoning nonparty witnesses
arbitration, arbitral forums developing procedural rules (Chapter 9); and eDiscovery (Chapter 10).
and administrative protocols, and arbitrators applying
Smack in the middle is conduct of the arbitration
their craft may have widely divergent, yet thought-
hearing itself (Chapter 11). This section is made man-
fully legitimate, views on what should take place in the
ageable by moving from consideration of design of the
arbitral arena.
process through management of its elements—including
Some will favor reasoned awards, others a one liner, exhibits, testimony, time, logistics, and even site visits—
at best. Some would go straight to hearing, while others into an extraordinary and fascinating treatment of con-
would craft elaborate discovery. Some permit motions; duct of the arbitrators themselves during hearings, and
others eschew them. Some seek nearly judicial processes; finishing with briefing and closing arguments.
others might wish for a non-attorney expert in their field
The next couple of chapters wrap things up chrono-
to decide wisely and pragmatically in a manner reflect-
logically, addressing awards and substantive interlocuto-
ing custom of the industry or usage of the trade, even if,
ry decisions (Chapter 12), and finally post award matters
e.g., it means overlooking a statute of limitations or the
(Chapter 13). The treatise next presents another freshly
ancient documents doctrine when considering a 20-year
crafted chapter on the unique and increasingly timely role
history of bordereaux in a reinsurance matter.
of emergency arbitrators (Chapter 14). This is followed by
With the complexity and variety existing in the arbi- one of the most fascinating, reflective and useful pieces
tration field, one wonders whether—even as the product in the Guide—a consideration of intratribunal relations
of leaders in the arbitration field—a best practices guide (Chapter 15). This chapter alone is a rare gift to the arbi-
is an act of hubris. While some might rest with marveling tration bar.
at this complexity, seeing a world in each grain of sand
The balance of the treatise covers special situations.
and heaven in each wild flower, arbitrators are a brave
Following an excellent treatment of class actions—em-
and decisive bunch. The College of Commercial Arbitra-
bracing arbitrability, clause interpretation, class certifica-
tors, following efforts commenced in 2001 by the Ameri-
tion, and approval of class settlements, among a variety
can College of Construction Lawyers, then joined by the
of essential subjects—(Chapter 16), the Guide introduces
CCA in 2003, girded up their loins and gave it a try.
the last of the three new chapters introduced in this 4th
The result is an effort to gather best practices while edition: unique issues in construction arbitration (Chapter
recognizing variety and complexity. The Guide embraces 17). Two comprehensive chapters on international arbitra-
this diversity by setting out core concepts and procedural tion, one on preliminary matters (Chapter 18) and the next
issues and sharing contrasting views in a manner that on the conduct of proceedings (Chapter 19), are followed
enables the user to strike a balance and have a clearer by a thought provoking piece on hybrid processes (Chap-
sense of the range of considerations that should inform ter 20). This last piece covers arb/med, med/arb, and
decision making on the given issue. It might be impos- arb/med/arb. It does a good job of laying out the ethical
sible accurately to trace the path of a spinning gyroscope thicket that one must navigate when shifting between
as it maintains balance while in motion. Nevertheless, the processes. It spells out areas for disclosure and waivers;
balancing act of the CCA has produced a map that we are highlights challenges to impartiality and the appearance
about to put to the test. of impartiality; and wisely cautions neutrals to be sure
that the operative agreement addresses what information
As we ready for the race in our would-be Maserati, arbitrators will consider should the process morph back
it is helpful to view the basic lineaments of this map. The into an arbitration after the conduct of ex parte discussions
Guide is structured in a manner that facilitates an intui- in the form of mediation caucuses.
tive search for answers. Its 20 chapters and two appendi-
ces run in roughly chronological order according to the Our overview of the Guide remains as incomplete as
stage one might be in during an arbitral proceeding. would be a description of Fisher & Ury’s classic, Getting
to Yes, if one failed to mention the BATNA. Just as the
The first five chapters address matters preliminary BATNA is first mentioned in the second edition’s tail to
to arbitration. After the introduction (Chapter 1) come: that classic, here too, the 4th edition features two timely
appointment, disclosures, disqualification of neutral ar- and useful appendices that were created for this new ver-
bitrators (Chapter 2); non-neutral arbitrators (Chapter 3); sion of the Guide. Appendix I presents a guidance note on
fees and expenses—a theme dear to every neutral’s heart arbitration and social media. How many of us have won-
(Chapter 4); and determining jurisdiction and arbitrabili- dered what to do with that pesky LinkedIn site, revealing
ty—a law rich review (Chapter 5). over 500 of one’s nearest and dearest friends? Appendix
The next five chapters address the work of arbitra- II offers a guidance note on maintaining security of an
tors just before conduct of the hearing itself. This covers arbitrator’s electronic information. It is a cautionary tale
prehearing conferences and prehearing management for the tech-unsavvy, to say the least.

56 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 Well, we have spent enough time racing the motors • During my last visit to Equinox gym, my trainer
as we prepare for our test drive. It is time to take this kept complaining that he needed a more “muscu-
baby for a run. Let us take a look at how it handles with a lar” arbitrator. What can I do?
few quirky or essential questions.
Put on the brakes and consider what Chapter 8 has to say
• Can someone please give me a checklist of issues to on proportionality in discovery, and then move forward
address in a pre-hearing call? to Chapter 10’s application of this notion in the e-Discov-
ery context.
Sure. Take a look at the 37-item checklist at Chapter
6.III.C. • Is it ok for me to do my own legal research? I am
not sure counsel have given me all that I need to
• How do I handle differences with fellow arbitral make the right decision.
panelists?
There is a traffic jam over at Chapter 6.V.S. Something
Take a look at Chapter 15 and get back to us. tells me a good number of arbitrators are considering this
• I am not sure how to bill compared to my other question over there.
panelists. I suspect the reader has gotten the message. The
Really, you ought to read Chapter 15. Guide passed this road test with flying colors. Yet no
review is fully credible without a little spice. So here
• Is it ok for me to handle a class action arbitration? are some additions, enhancements or modifications one
Head over to Chapter 16. might look for in a 5th Edition.

• Folks are asking me to move from my role as arbi- Even though John Wilkinson and Carroll Neesemann
trator to engage in an arb/med/arb process. Is this were among the chief authors of the excellent protocols
permissible, and, if so, how do I structure a good on the handling of discovery in domestic commercial and
process while preserving my neutrality and the international arbitration, which were created by NYSBA’s
trust of the parties and counsel? Dispute Resolution Section and received with approval
by our House of Delegates,3 search as I might, I saw no
Turn left at Chapter 20. mention of them in the Guide. I hope they are offered for
reference in the 5th edition. Similarly, one hopes that the
• What the heck is a Bayesian search? Counsel keep
authors of Chapter 20 add “ACR” to the acronym used
mentioning this in their squabble over e-Discovery.
for what is typically referred to as the AAA/ABA/ACR
Consult the glossary in Chapter 10. (Ok, I will admit that Model Standards of Conduct for Mediators. It is vital to
I invented this question only after reading Chapter 10. I show due regard for all contributors to those essential
am glad to know what a Bayesian search is now.) standards, including the non-attorney neutrals who are
part of that organization.
• I could use some tips in handling technology dur-
ing our hearing. A major component of a wish list for volume five
would be guidance on deliberation and decision making
Go straight to Chapter 11, then take a left at subsection itself. This could include tips on how to use a Daubert-
VII. like analysis when considering what weight to give to an
• Isn’t there a better way to deal with expert testimo- expert’s testimony. It could include advice on how to as-
ny than having the first expert opine during claim- sess, conceptualize, and calculate damages. It might even
ant’s case and waiting two days until the second include thoughts on how to judge credibility of witnesses.
expert opines during respondent’s presentation? I It might include a piece on cognitive biases and cross-
have a hard time remembering what the first one cultural differences applied to the arbitrators’ assessment
said, and really have some follow up thoughts for of testimony, decision making, and impression of and
the first expert after hearing the second. relations with one’s fellow arbitrators.

You will find some creative ideas on putting experts to- The 37-part checklist for pre-hearing conferences
gether in Chapter 10. could add two more items: need for translators and in-
terpreters, and whether a record of the hearing is needed.
• Can I award punitive damages? More might be developed on theories addressing whether
to create a detailed or terse award.
You will achieve good mastery (this is a pun) of this issue
after consulting Chapter 12.V.B. Once during the fourth battle of Kawanakajima, the
famous 16th century daimyo, Takeda Shingen, was resting
• What is the optimal way to organize the timing of
Exhibits? in his tent when his foe, Uesugi Kenshin, rushed in on
horseback. With aplomb, Takeda Shingen reputedly lifted
Speed over to Chapter 11.IV. his iron fan and effectively deflected a blow from Uesu-

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 57
gi’s sword, at the same time exclaiming “a snowflake on Underwood; Curtis E. von Kann; Robert W. Wachsmuth; David
a blazing fire.” The above wish list for volume five is no E. Wagoner (deceased); Irene C. Warshauer; Robert P. Wax; Dana
Welsh; Michael S. Wilk; John H. Wilkinson.
more than a few snowflakes extinguished by the illumi-
2. With apologies to any I miss or mischaracterize, I believe the
nation offered by the Guide to Best Practices in Commercial following list, consisting of roughly 25% of the total contributors
Arbitration. I unequivocally recommend it to the reader. to this CCA Guide, have also belonged to NYSBA’s Dispute
Resolution Section: Gerald Aksen; William L. D. Barrett; Axel
Baum; David N. Brainin (deceased); James H. Carter; Louis A.
Endnotes Craco; Robert B. Davidson; Louise E. Dembeck; Neal M. Eiseman;
1. The 104 contributors are: Gerald Aksen; Henri C. Alvarez; Eugene I. Farber; Walter G. Gans; Barry H. Garfinkel; Eugene S.
Markham Ball; John M. Barkett; John A. Barrett; William L. D. Ginsberg; Ruth V. Glick; George Gluck; Marc J. Goldstein; Laura A.
Barrett; William G. Bassler; Albert Bates, Jr.; Axel Baum; Bruce Kaster; Carroll E. Neesemann (deceased); Lawrence W. Newman;
W. Belding; Gary L. Benton; Trey Bergman; R. Doak Bishop; John Michael S. Oberman; Lucy F. Reed; Kathleen A. Roberts; Vivien
T. Blankenship; John P. Bowman; John K. Boyce, III; David N. B. Shelanski; Edna R. Sussman; Irene C. Warshauer; John H.
Brainin (deceased); Thomas J. Brewer; John E. Bulman; Joseph Wilkinson. To the extent I have included any who are not members
F. Canterbury, Jr.; James H. Carter; Richard Chernick; Winslow of this Dispute Resolution Section, we expect applications shortly.
Christian (deceased); Louis Coffey; Deborah A. Coleman; Peter D. 3. One can find these protocols online at: https://www.nysba.
Collisson; Louis A. Craco; Philip E. Cutler; Robert B. Davidson; org/Sections/Dispute_Resolution/Dispute_Resolution_PDFs/
Louise E. Dembeck; M. Scott Donahey; Paul J. Dubow; James Guidelines_for_the_Efficient_Conduct_of_the_Pre-hearing_
W. Durham; Neal M. Eiseman; Jay W. Elston; Eugene I. Farber; Phase_of_Domestic_Commercial_Arbitrations_and_International_
William B. Fitzgerald; James M. Gaitis; Patricia D. Galloway; Arbitrations.html.
Walter G. Gans; Barry H. Garfinkel; Eugene S. Ginsberg; Ruth V.
Glick; George Gluck; Marc J. Goldstein; Herbert H. (Hal) Gray,
III; James P. Groton; A. Holt Gwyn; Sally Harpole; David M. Simeon H. Baum, President of Resolve Mediation
Heilbron; John W. Hinchey; John R. Holsinger; L. Tyrone Holt; Services, Inc. (www.mediators.com), has successfully
Robert A. Holtzman; Carl F. Ingwalson, Jr.; John Kagel; Alan
M. Kanter; Laura A. Kaster; Richard H. Kreindler; A. J. Krouse; mediated or arbitrated more than 1,000 disputes. He is
Urs M. Laeuchli; Louise A. LaMothe; June R. Lehrman; Larry R. the founding Chair of NYSBA’s Dispute Resolution Sec-
Leiby; Nancy F. Lesser; Richard A. Levie; William H. Levit, Jr.; tion. He advises New York Court system on ADR and
James R. Madison; Richard R. Mainland; John Burritt McArthur; has trained their Commercial Division mediators for
John J. McCauley; Bruce E. Meyerson; Lawrence R. Mills; Carroll
E. Neesemann (deceased); Lawrence W. Newman; Susan H. the last 20 years. In 2011, 2014, and 2018, Best Lawyers
Nycum; Michael S. Oberman; Philip D. O’Neill; Allen Overcash; selected Mr. Baum as New York’s ADR “Lawyer of the
Gerald F. Phillips (deceased); Elliot E. Polebaum; Lucy F. Reed; Year.” He teaches on the ADR faculty at Benjamin N.
Thomas D. Reese; Barbara A. Reeves; Kathleen A. Roberts; Cardozo School of Law. SimeonHB@DisputeResolve.
Deborah Rothman; John M. Seitman; Vivien B. Shelanski; John A.
Sherrill; Stanley P. Sklar; Allison J. Snyder; Francis O. Spalding; com.
Stephen S. Strick; Edna R. Sussman; R. Wayne Thorpe; Christi L.

ADR Advocacy, Strategies, and Practices for Intellectual

Property and Technology Cases (Second Edition)
Edited by Harrie Samaras
Reviewed by Joseph P. Zammit
There can be little doubt that there has been an ever business people for that matter) could greatly benefit
increasing trend over the past two decades toward the from a comprehensive but concise guide to the gamut of
use of ADR to resolve business disputes, both domesti- ADR choices, the rules that govern their operation, and
cally and cross-border. More and more, faced with the the strategies and techniques for successfully employ-
delay, expense, and public relations risks of traditional ing them. Stepping admirably into the breach, the ABA
court litigation, not to mention the unpredictable nature Section of Intellectual Property Law has given us ADR
of jury verdicts, clients themselves have demanded that Advocacy, Strategies, and Practices for Intellectual Property
their counsel consider the advantages of ADR. After a and Technology Cases (Second Edition), edited by Harrie
somewhat slow start, this has become just as true in dis- Samaras. Ms. Samaras, who is not only the work’s edi-
putes involving intellectual property and technology as tor but also a co-author of five of the book’s 13 chapters,
in other types of commercial matters. is impeccably credentialed for the job. She is a full-time
neutral focusing on arbitrating and mediating IP and
Yet, despite a growing number of ADR specialists,
technology cases, a Distinguished Fellow of the College
the American bar in general has failed to keep pace with
of Commercial Arbitrators and the Chartered Institute
the sophistication and variety of modern ADR. Old at-
of Arbitrators, as well as a Distinguished Fellow of the
titudes die hard, and unfortunately many practitioners
International Academy of Mediators, and also consults,
still seem to approach ADR as simply litigation in a
teaches, and trains in the area of ADR.
conference room rather than a courtroom. Lawyers (and

58 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 ADR Advocacy is especially directed to the use of Stephen P. Gilbert, Laura A. Kaster, and Harrie Sama-
ADR in IP and technology cases, and it splendidly fulfills ras); a specialized and expedited form of arbitration for
that objective. Chapter 1 (by James F. Davis) provides an domain name disputes (Chapter 11 by Dina Leytes and
overview of the various ADR tools and their applicabil- Harrie Samaras); the use of Special Masters in litigation
ity to resolving IP/technology disputes, illustrating his (Chapter 12 by Don W. Martens and Gale R. (“Pete”)
points with numerous helpful “cases in point” drawn Peterson); and finally a discussion of some tools useful to
from IP and technology matters. Throughout the balance persuade, evaluate, and communicate in ADR proceed-
of the book specific issues presented by IP/technology ings (Chapter 13 by Kevin R. Casey). There is consistency
cases are addressed, such as the selection of appropriate in format, terminology, and the use of numerous exam-
mediators and arbitrators, the effective use of experts, the ples and appendices throughout.
advisability of tutorials, the resolution of FRAND dis-
One is hesitant to discuss in more detail some chap-
putes, and the implications of 35 U.S.C. § 294(d) (mandat-
ters in ADR Advocacy for fear of slighting the rest. It must
ing that any arbitration award in a patent case become
be said that they are all of the highest quality, and their
part of the public patent prosecution file of the patent at
authors are uniformly highly qualified and very experi-
issue). Indeed, entire chapters are devoted to forms of
enced in IP/technology ADR. Nevertheless, in order to
ADR unique to IP matters: the Federal Circuit’s appellate
provide a better flavor of the scope and variety of ADR
mediation program for IP cases (Chapter 8 by J. William
Advocacy, this reviewer has chosen to expand upon three
Frank and Harrie Samaras), the Section 337 mediation
of the chapters.
program at the U.S. International Trade Commission
(Chapter 9 by Hon. Theodore R. Essex, Lisa R. Barton, Hon. Mary Pat Thynge’s chapter on mediation from
and James R. Holbein), UDRP proceedings (Chapter 11 by an experienced magistrate judge’s perspective presents a
Dina Leytes and Harrie Samaras), and the use of Special practical, common-sense, business focused discussion of
Masters in IP cases under Rule 53 of the Federal Rules of the mediation process in IP cases and, by extension, busi-
Civil Procedure (Chapter 12 by Don W. Martens and Gale ness disputes in general. From personal experience, this
R. (“Pete”) Peterson) (although this last is not strictly reviewer knows Judge Thynge to be a thoughtful, patient,
speaking unique to IP cases, and it might be argued is not and congenial mediator. Her view of what mediation is—
a form of ADR at all, as it is a mechanism employed in a or should be—is really quite perceptive:
federal district court litigation).
Mediation is not compromise—it is nego-
But the value of ADR Advocacy is hardly limited to tiation….For counsel and their clients to
IP practitioners. On the contrary, it delivers a wealth of discern…what their final trial presenta-
information, insights, strategic advice, and tactical con- tion will be entails a major investment
siderations useful to ADR advocates in any sort of busi- of time, emotion, resources, and money,
ness dispute. Before discussing a few examples of these, with no guaranteed benefit.
however, it should be said that, despite its multiplicity of
chapter authors, the book definitely conveys the feel of Mediation returns to the parties what liti-
an integrated whole, a tribute to Ms. Samaras’s skill as an gation has taken away—control. It allows
editor. After Chapter 1 introduces the various forms of the parties to control the decision-making
ADR, the book proceeds in logical fashion with chapters process. Unlike litigation and trial, it
on negotiating and drafting ADR clauses (Chapter 2 by requires their direct, intimate involve-
Frank L. Politano); Early Case Assessment, a systematic ment and judgment, and thereby pro-
approach to collecting and analyzing information about a vides them the means to tailor a result,
dispute and its business impact, with a view to enhancing whether through a settlement agreement,
predictability and informed decision-making (Chapter 3 license, or other business arrangement,
by Cynthia Raposo and Harrie Samaras); initial damage which addresses their individual needs.
assessments to keep things real and determine whether It gives parties resolution opportuni-
early resolution is economically advisable (Chapter ties beyond the limited constraints of a
4 by Carol Ludington); mediation from several view- particular case, allowing a global, rather
points (Chapter 5 by Magistrate Judge Mary Pat Thynge, than piecemeal, approach to finality, and
Chapter 6 by Kevin Rhodes, and Chapter 7 by Merriann it maintains privacy within the confines
Panarella and Harrie Samaras); two forms of specialized of the law and mandatory reporting
mediation, namely, appellate mediation at the Federal obligations. It allows parties to choose
Circuit (Chapter 8 by J. William Frank and Harrie Sama- the method for resolving prospective
ras) and Section 337 mediation at the ITC (Chapter 9 by disputes and to avoid future litigation.
Hon. Theodore R. Essex, Lisa R. Barton, and James R. [Pages 177-78.]
Holbein); arbitration (Chapter 10 by Michael H. Diamant,

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 59
 Judge Thynge’s comments on the timing of media- party to request a simple—rather than reasoned—award,
tion are also of interest, especially regarding the amount namely, collateral estoppel effect of the award, confidenti-
of information parties actually need to effectively engage ality, cost, and concern over copycat claims.
in mediation: “In considering when to mediate—the
Chapter 13 of ADR Advocacy, by Kevin R. Casey, is en-
earlier the better. A matter settles when the parties know
titled “Tools Useful to Persuade, Evaluate, and Commu-
enough about a dispute to intelligently agree to resolve
nicate in ADR Proceedings.” As the title suggests, the goal
it. Such knowledge, however, does not require discov-
of the chapter is to familiarize counsel and neutrals with
ery to the nth degree, a claim construction opinion, or a
tools that can be useful to achieve resolution of a dispute.
summary judgment decision.” [Page 181.] This attitude
Some of these tools, such as the use of charts, exhibits,
runs contrary to the instincts of many defense counsel in
and other visual aids to convey information in a more
patent cases, who typically insist that mediation cannot
impactful manner, as well as the use of technology such as
be meaningful until discovery is complete, and perhaps
laptops, spreadsheets, and smartphones to research infor-
not even until expert reports are filed and a Markman rul-
mation, keep track of changing data, facilitate negotiation,
ing is handed down. Note, however, that Judge Thynge
and rapidly document a resolution, are well-known (if
does not disagree that sufficient information is necessary
sometimes overlooked) by practitioners. Others, like the
for successful mediation, but rather raises the question
use of screening tools to help determine the appropriate
of what quantum of information constitutes “sufficient”
form of ADR or select the right neutral, the use of mock
information.
arbitration panels, and Decision Tree Analysis may be less
Finally, Judge Thynge’s comments on whom to familiar. Mr. Casey does an admirable job of describing
bring—or not bring—to a mediation session are also each of these tools, their application, and effectiveness.
worth mentioning, although some might not agree with Perhaps most intriguing is his introduction to the possible
all of those comments. Particularly provocative is her use of computerized algorithms such as Adjusted Win-
advice to leave the inventor, prosecution counsel, and in- ner and Proportional Allocation in resolving intellectual
house IP counsel at home, if possible. property cases. [Page 553.] A helpful appendix explains
these algorithms in more detail and provides an example
Although ADR Advocacy devotes only a single chap-
of their use. Without pretending to fully understand this
ter (Chapter 10) exclusively to commercial arbitration,
algorithmic approach, this reviewer applauds the effort to
chapter authors Michael H. Diamant, Stephen P. Gilbert,
introduce more scientific rigor into the ADR process.
Laura Kaster, and Harrie Samaras have delivered a
virtual mini-treatise on the subject. While the focus again As hopefully suggested by the foregoing, ADR Advo-
is on issues of particular concern in technology cases, the cacy is broad in scope, comprehensive in execution, and
chapter provides many insights adaptable to other kinds very practical. It should be on the bookshelf of every IP/
of business cases. Particularly helpful is the discussion of technology lawyer and ADR practitioner.
privacy and confidentiality in arbitration—and the differ-
ence between the two—as well as practical suggestions to
Joseph P. Zammit is an independent arbitrator, fo-
practitioners on how to maximize confidentiality when
cusing on intellectual property and commercial disputes
that is deemed important. [Pages 367-78.] Also of note is
involving technology. Before establishing Zammit Tech-
the authors’ sage advice regarding the preliminary con-
nology ADR, he was with Norton Rose Fulbright US
ference and other pre-hearing matters such as discovery,
LLP, where he represented clients in numerous domestic
tutorials, bifurcation, witness disclosures, motions, and
and international arbitrations. Mr. Zammit is listed on
pre-hearing briefs. [Pages 382-402.] An appendix pro-
the Silicon Valley Arbitration and Mediation Center’s
vides a convenient and comprehensive checklist of topics
List of the World’s Leading Technology Neutrals. He is
to be addressed at the preliminary conference. [Pages
the co-author of “Arbitrating International Intellectual
417-419.] The section on the evidentiary hearing itself
Property Disputes,” MEALEY’S International Arbitra-
covers such seemingly mundane, but necessary, tasks as
tion Report, June 2009, and “Disclosure and Admission
marking and assembling exhibits and using summaries
of Evidence in the International Arbitration of Intel-
of voluminous exhibits, as well as more substantive is-
lectual Property Disputes,” Chapter 7 of Arbitration
sues such as opening and closing statements, the presen-
of International Intellectual Property Disputes (Juris
tation of testimony (both fact and expert), and post-hear-
Publishing 2012).
ing briefs.[Pages 402-13.] In addition, the authors provide
an insightful analysis of factors that may prompt a

60 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
The Roles of Psychology in International Arbitration
Edited by Tony Cole
Reviewed by Jane Wessel and Ben Pilbrow
The Roles of Psychology in International Arbitration1 is have a considerable effect in the decision making process,
series of essays by experts from the fields of law, arbitra- although the extent of that influence depends upon the
tion, psychology, philosophy and anthropology on the background and experiences of the arbitrator. Ms Suss-
roles of psychology in international arbitration. It is a man helpfully recommends a number of conscious steps
grand example of inter-disciplinary cross-fertilization, that an arbitrator can take to combat the impact of biases.
containing valuable and sometimes surprising insights
In Chapter 4, Jos Hornikx, an expert in communica-
for international arbitration experts. The overall impact
tion and information studies, focuses on cultural differ-
is a comprehensive consideration of a broad range of
ences in assessing the merits of arguments. Professor
psychological phenomena as they apply to international
Hornikx discusses some fascinating research on the influ-
arbitration.
ence of culture on the assessment of argument quality.
Part 1 deals with the decision making process of arbi- Based on the well-known research led by Professor Geert
tration. This opens with a study by Professor Rusty Park Hofstede into cultural differences, Professor Hornikx
considering the interconnections between an arbitrator’s postulates that arbitrators from different cultural back-
application of the law, the psychological impact of the grounds may perceive the quality of arguments differ-
risk of being annulled, and the influence of procedural ently because of the different importance that they may
“soft laws” in international arbitration. He highlights the ascribe to different values. Although Professor Hornikx
benefits of the communal decision-making in a three- recognizes the limitations of the available research outside
member tribunal in counteracting possible biases (both Western cultures, his insights may provide useful insights
conscious and subconscious). Professor Park also raises into the decision-making process of arbitrators from dif-
a fascinating question of whether the source of an arbi- ferent cultural backgrounds.
trator’s authority, coming as it does from the individu-
Part 2 focuses on arbitration as a means for the reso-
als involved in the proceedings, may lead to arbitrators
lution of disputes. In Chapter 5, Professor Ran Kuttner
favoring individualistic concerns, by contrast with state-
suggests that international arbitration is like a ship, where
appointed judges who may tend to prioritise community
the parties own and can travel on the ship, with the arbi-
values.
trator as the ship’s captain. He proposes that, as a result,
In Chapter 2, Peter Ayton and Genevieve Helleringer, the question of “who controls the ship” is more open to
professors respectively of psychology and law, consider interpretation in international arbitration than in litigation
bias, vested interests and self-deception in decision mak- (where, to continue the analogy, the ship is a public ferry
ing in the context of the degree to which one party may and the parties merely passengers). Professor Kuttner
rely on the impartiality of an arbitrator appointed by its argues that a new breed of arbitrator is coming into being:
counter-party. Professors Ayton and Helleringer suggest a manager of the dispute resolution process, with a key
that “people confabulate a plausible explanation” for why role as a facilitator.
they reached a certain conclusion and “in so doing, ‘seem’
In Chapter 6, Pietro Ortolani and Donna Shestowsky
to be ‘unaware of their unawareness”’ and so cannot have an
focus on the psychology of the disputants in arbitration,
accurate insight into their own decision-making process.
a sadly neglected area of study. Dr. Ortolani and Profes-
Professors Ayton and Helleringer question the ability of
sor Shestowsky undertake a comparison between various
arbitrators to self-certify their impartiality, and even sug-
aspects of domestic and international arbitration. The
gest, worryingly, that disclosure of a possible source of
authors suggest that the disparity between domestic and
bias may undermine an arbitrator’s ability to counteract
international arbitration is a logical result of the differ-
its influence in making a decision.
ing motivations of parties choosing arbitration in these
Chapter 3 considers biases in arbitrator decision- contexts. In the international sphere, parties are keen
making, exploring similar themes to Chapter 2, but to ensure that their counterparty does not enjoy home
this time from the more conventional perspective of advantage in the choice of substantive rules, an issue that
an experienced arbitrator. Edna Sussman asks whether usually does not arise in the context of domestic arbitra-
international arbitrators should consider the impact of tion. Additionally, the predictability of the default option
the procedural flexibility of the arbitration process, which differs in an international context (where conflict of laws
tends toward allowing documents into evidence that rules may be highly unpredictable).
might be excluded in court, but which the arbitrators can-
Richard Earle outlines the development of investor-
not then disregard. She considers various forms of bias,
state arbitration in Chapter 7 and emphasizes the im-
including hindsight bias, anchoring bias, framing bias,
portance of neutrality in the context of supra-national
coherence bias, and confirmation bias, each of which may

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 61
arbitration. Using Occidental v. Ecuador as a foundation for is unusual and rather challenging. The authors are phi-
exploring these themes, he explains the purpose, context losophers whose primary interests are in psychology and
and legal footing for investor-state arbitrations and con- linguistics. Their insights into the meanings provided to
siders how unconscious bias and cultural intelligence may certain words by the international arbitration community
have played a part in the decision by Ecuador and other are interesting, but one is left questioning whether the size
Latin American states to break away from ICSID in favor of their sample suggests that their findings may not be
of UNASUR. representative of the international arbitration community
as a whole.
Part 3 focuses on the arbitral procedure. Mark Cymrot
and Paul Levine explore in Chapter 8 the psychological Chapter 12 returns to the views of an experienced
benefits of going first in arbitration proceedings, consider- arbitrator, but one who is an engineer rather than a
ing how anchoring and framing can influence arbitrators. lawyer. Geoffrey Beresford Hartwell makes the interest-
They offer a fascinating study comparing the primacy and ing assertion that arbitration is not legal in nature, but
recency effects to see whether a party gains more advan- a method of making practical decisions. He relies upon
tage by going first in proceedings or by having the last op- himself, an arbitrator without legal training, as evidence
portunity to persuade the tribunal. The authors conclude justifying his assertion, and emphasizes that arbitration
that anchoring is likely to have the more powerful influ- is based upon trust between parties and arbitrator, in
ence. They provide a list of strategies to deal with these contrast to litigation, which is based upon state author-
psychological effects, which should be in every advocate’s ity. From this foundation, he considers the circumstances
arsenal. when an arbitrator may be removed for lack of neutrality,
and the role of experts in arbitration. Beresford Hartwell’s
insights are impressive, although this chapter has little to
”For international arbitration practitioners, say about psychology and the role it plays in international
it contains many helpful insights and arbitration.
practical tips...” Chapter 13 considers the influence of dissents in
arbitration. Audley Shepherd QC and Daphna Kapeliuk
Ula Cartwright-Finch considers in Chapter 9 the effect describe the incidence of dissents in common law courts,
of human memory on witness evidence in international civil law courts, international courts and international
arbitration. Many studies have shown that memory is a arbitration (both commercial and investor-state). Dissents
constructive process, such that later experiences, includ- are the epitome of a strong, confident judicial process,
ing the act of recollection itself, influence a witness’s beneficial in testing (and, counter-intuitively, bolster-
memory. Ms Cartwright-Finch’s careful review of the psy- ing) the views of the majority, and they can sometimes
chological phenomena involved in memory recollection be a catalyst for the evolution of the law (although this is
calls into question the weight that is given to such evi- unlikely in the context of arbitration). On the other hand,
dence. It would be interesting to expand on this research they directly undermine the authority of the majority deci-
by considering how different methods of witness prepara- sion they oppose. The authors consider the possibility that
tion influence a witness’ memory of events on which he is an arbitrator may be motivated, subconsciously or not, to
giving evidence. dissent from the majority decision in order to support the
party that appointed him or her, and the impact of a dis-
In Chapter 10, Cornel Marian and Sean Wright sug- sent on the collegial nature of panel deliberations. Lastly,
gest that there is a difference between how claimants and they consider the impact that a dissent may have on the
their counsel react to separate awards on costs because of unsuccessful party, particularly if the dissent focuses on
the different psychological biases influencing them. The issues of procedural irregularity.
chapter is clear and compelling, and has the consider-
able advantage of presenting significant practical advice Finally, Part 5 focuses on the context of international
to international arbitration practitioners. It concludes by arbitration. In Chapter 14, Stavros Brekoulakis questions
presenting and discussing a number of techniques aimed whether the current approach to dealing with arbitrator
at combating these biases. bias is insufficient, in that it focuses solely on the question
of individual bias and tends to overlook cultural and sys-
Part 4 deals with the role of the arbitrator. It com- temic biases, to which international arbitration institutions
mences with a study by Professor Dieter Flader and may be vulnerable due to the homogenous nature of their
Charles Anderson in Chapter 11 of their research into membership. From this point, he develops his theme by
the role of social interaction in international arbitration, suggesting that the existing empirical studies of arbitral
approaching the question from a wholly qualitative point judicial behavior fail to provide a comprehensive explana-
of view, in contrast to the quantitative method typically tion of arbitral decision making, because they do not take
used in the social sciences. The aim of their research is to account of this institutional context. Professor Brekoulakis
give a more accurate and developed description of the points out the lack of significant academic scrutiny of
strategies of arbitration. The result, for readers used to the these issues.
quantitative approach of modern science or legal analysis,

62 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 Chapter 15 is a fascinating exploration of internation- ing the three key factors for arbitration users: (i) perceived
al arbitration from the point of view of anthropology and neutrality, (ii) perceived trust and (iii) treatment with
its research techniques, focusing on cultural (rather than respect and dignity.
individual) approaches to dispute resolution. Professor
Bantekas identifies two difficulties that the international
Conclusion
arbitration community may have in judging the suitabil-
ity of general arbitration practice to specific communi- The Roles of Psychology in International Arbitration is an
ties: (i) the unperceived bias that is brought to the issue, admirable book. It gathers input from an array of experts
whether cultural or relating to pre-established practices, in a diverse range of fields. For international arbitration
and (ii) language barriers, which often run deeper than practitioners, it contains many helpful insights and practi-
the meaning of individual words so that they cannot be cal tips that should test their preconceptions and enable
overcome with a dictionary alone. He considers the influ- them to improve their understanding and practice of
ence on dispute resolution of West African culture, which international arbitration.
prioritises the reconstruction of social relationships over
the vindication of rights, albeit while also emphasizing Endnote
the priority of legal certainty. This cultural difference has 1. Edited by Tony Cole, First Edition published 2017 by Kluwer Law
important repercussions for marketing the “product” of International B.V.
arbitration in West Africa.
Finally, in Chapter 16, Adriana Aravena-Jokelainen Jane Wessel is an international arbitration Partner
and Sean Wright consider factors that historically arbitra- at Arnold & Porter Kaye Scholer, and Ben Pilbrow is a
tion users have considered important in choosing to use Partner in the Commercial and International Disputes
arbitration. With this foundation, they argue that arbitra- Department of Shepherd and Wedderburn LLP.
tion institutions can “balance the triangle” by strengthen-

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NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 63
 Award-Winning Student Papers

Med-Arb: How to Mitigate the Risk of Setting Aside

or Refusal of Recognition and Enforcement of a
Med-Arb Award
By Sarah Benzidi

Introduction mutually acceptable resolution.”2 Arbitration is “the most

Albert Einstein reportedly said: “The true sign of formal alternative to court adjudication wherein disputing
intelligence is not knowledge but imagination.”1 One field parties present their case to one or more impartial third
in which we can observe the human imagination is the person who are empowered to render a binding decision.”
field of dispute resolution mechanisms. Parties can choose Med-arb, then, refers to “the hybrid process in which me-
among litigation, arbitration, mediation, negotiation, diation is combined with arbitration.”3
parenting cooperation, early neutral evaluation, mini-trial, Med-arb is a two-stage dispute resolution mechanism.
settlement conference, and referral to the expert, and this In the first stage, parties try to come to an agreement with
enumeration is not even exhaustive. the help of a third-party neutral called a med-arbiter,
One of the numerous options available to parties to who first assumes the role of a mediator. If the parties do
solve their disputes is a process called med-arb. Although not solve their dispute during this first stage, they enter
advantageous in many respects, this fairly recent alter- the second stage of the process, the arbitration phase, in
native dispute resolution mechanism is not without its which the med-arbiter switches roles from mediator to
problems. Can those problems be overcome? This is what arbitrator. In that second stage, the parties relinquish con-
this article seeks to examine. trol over decision making to the arbitrator, who conducts
an adjudicative hearing to decide either the entirety of the
The article will be divided in three main parts. In the dispute or the outstanding issues, if the parties reached a
first part (I), we will issue a brief reminder about what partial agreement in the mediation phase.4
med-arb is (A and B) and look at the reasons why med-arb
has been developed in recent decades (C). The parties may also choose two different neutrals to
serve as the mediator and the arbitrator in their dispute.
The second part of this article (II) will be dedicated However, this article will focus on the situation, some-
to an analysis of the issues raised by the hybrid nature of times referred to as “same-neutral med-arb,” where the
med-arb. Emphasis will be placed on four specific issues parties appoint the same neutral to serve both functions.5
that might have a direct impact on the viability of an
arbitral award rendered in the context of a med-arb. Those Finally, it should be stressed that med-arb is a volun-
issues are the rule of confidentiality (A), the right to know tary process. There can be no med-arb without an agree-
of and to confront the other side’s arguments (B), impar- ment of the parties to use this type of dispute resolution
tiality (C), and independence (D). mechanism.6

Finally, we will assess med-arb and its potential ben- B. How Does It Work in Practice?
efits in light of the four analyzed issues. Has our imagina- Both the mediation phase and the arbitration phase of
tion gone too far? Or is this innovative form of ADR worth a med-arb are closed to the public. It is therefore difficult
keeping, and if so, under what conditions? Is it possible to to know what exactly goes on behind the closed doors
mitigate the risk of setting aside or refusal of recognition of a med-arb.7 Beyond the fact that all med-arb proceed-
and enforcement of a med-arb award? This will be the ings combine mediation and arbitration, the process
subject of the last part of this article (IV). may differ considerably from one med-arb to another.
The overall structure and conduct of a med-arb proceed-
I. Med-Arb: A Hybrid Form of ADR ing will ultimately depend on the parties (including the
specifications they have made in their dispute resolution
A. Definition of Med-Arb clause or contract) and on the med-arbiter (her education,
As the word indicates, med-arb is an alternative her experience, and her preferred approaches, which may
dispute resolution mechanism that combines mediation vary based on the specific circumstances of each case). For
and arbitration in sequence in a single case. Mediation is instance, the usual definitions of “med-arb” imply that the
a “voluntary, confidential process in which a third-party mediation phase and the arbitration phase are separated,
neutral intervenes to assist the disputants to negotiate a but with the agreement of the parties, the med-arbiter

64 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
could also move back and forth between mediation and but leaves some room for settlement (“flexibility”), which
arbitration.8 promotes “efficiency and cost-savings over the use of ar-
bitration.”18 In short, med-arb proponents consider that it
Med-arb should be distinguished from other alter- resolves the problems of mediation and arbitration: “The
native dispute resolution mechanisms like early neutral Med-Arb ‘solution’ is to combine arbitration’s finality
evaluation9 or, in the context of family law, parenting with mediation’s flexibility in order to gain efficiency and
coordination.10 It also ought not to be confused with arb- the best of both processes.”19
med, in which the arbitral hearing occurs before the me-
diation session. In an arb-med, the arbitrator will usually 2. Med-Arb’s Appealing Features
issue an award and put it in a sealed envelope before the Features contributing to the appeal of med-arb are
parties start mediating. If the parties reach an agreement, many and, as mentioned, include finality, efficiency and
the neutral tears up the envelope and the decision will flexibility.
never be revealed. If they do not, the arbitrator reveals
the award.11 Arb-med does not raise the same issues as A med-arb process offers the parties greater flexibility
those created by med-arb. However, it can be more time- when compared to pure arbitration, because the parties
consuming and more expensive. can try to resolve their dispute by themselves in a first
step, which is especially valuable if the parties want to
C. Why Was Med-Arb Developed? preserve their relationship. Therefore, they have more
control over the overall dispute resolution process.
1. General Context
In recent years, the ADR community has seen in- Parties are also sure to find a solution to their dis-
creasing experimentation with med-arb, noting that pute, either by their amicable agreement or by the arbitral
med-arb proceedings are a “frequent feature in many award. Med-arb’s finality guarantees the parties that a
mass-tort settlement ADR programs that have been decision will be made if they cannot settle by themselves.
reviewed and approved by the courts in recent years.”12 This guarantee does not exist in a pure mediation, where
As early as 1997, a survey indicated that med-arb was the the parties who do not reach an agreement will have to
preferred ADR procedure for 23 percent of the survey’s incur the expenses of a new process (e.g., arbitration,
respondents in the service industry, and 13 percent in the litigation).
transportation, communications, and utilities group. Relatedly, med-arb is also generally regarded as an
efficient dispute resolution mechanism. Once the parties
recognize that no agreement can be reached, the arbitra-
tion phase can go relatively fast. The med-arbiter will
already know the issue, the facts, and the positions of the
parties upon entering the second phase of the med-arb.
Contrary to a “pure arbitrator,” the med-arbiter will be
able to carry out her mission without having to study the
case from scratch. The med-arbiter may thus not need as
much time to decide the case as a judge or an arbitrator
would.20
Source: See endnote 13 Since the parties are supposed to try to find a solution
More recently, Robert N. Dobbins noted that hy- by themselves in the presence of the potential arbitrator
brid processes, particularly med-arb, were “growing in of their case, the parties to a med-arb may be incentiv-
popularity.”14 And a 2008 survey among practitioners ized to be more reasonable.21 For instance, “research in
indicated that process concerns about med-arb were commercial uses of med-arb suggests that clients tend
decreasing.15 to be more conciliatory and less hostile in med-arb as
compared to pure mediation (…) Clients know that they
How can we explain the growing interest in med- mediate in the shadow of arbitration; accordingly, they
arb? The process first arose in the public sector16 before may be more likely to reach a decision.”22 Hence, med-
gaining popularity in the private sector. According to arb may be useful in a particularly high-conflict situa-
Brian A. Pappas, interest in med-arb is rising among pro- tion where the parties (or at least one of them) tend to
fessionals who provide both mediation and arbitration be unreasonable. This latter aspect may have the effect
services because of the increasing legalization of ADRs: of encouraging the parties to resolve their dispute more
“Mediation is becoming more evaluative and adversarial, rapidly, which can have a positive impact on the overall
arbitration and litigation are increasingly similar, and cost of the process.
arbitration is viewed as too costly, too inefficient, and ef-
fectively, the ‘new litigation.’” 17 Med-arb seems to offer a As just mentioned, cost might be an appealing factor
process combining the best of mediation and arbitration: too. A med-arb proceeding will likely be less expensive
it guarantees a final resolution of the conflict (“finality”) than litigating the dispute in court. By opting for a “same-

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 65
neutral med-arb,” the parties will contract with one tration phase.28 The parties may also seek to ingratiate
person to deliver two services and will thus most likely themselves with the neutral during the mediation phase:
pay less than if they had to appoint two different persons “Perhaps this could manifest itself in the parties acting
to fill the roles of mediator and arbitrator.23 as if they are on their ‘best behavior,’ but it could also
involve deception or trying to paint the opposing party in
Another advantage of combining mediation and a negative light.”29
arbitration is that it may allow the parties to substantially
narrow their dispute during the mediation phase, leaving Last but not least, med-arb raises the risk, analyzed in
only the outstanding issues for the arbitration stage. In detail below, of the neutral using confidential information
some cases, it may be useful to the parties for the arbitra- disclosed in the mediation (particularly in caucus) in fash-
tion of the outstanding issues to take place “as soon as ioning the arbitration award. Furthermore, the right to be
possible following the narrowing of the dispute accom- heard and the med-arbiter’s independence and impartial-
plished during the mediation phase. (…) If the mediator ity may also be at risk, as explained in the next sections of
has earned their confidence, the parties may prefer to this article.
have the mediator decide the remaining issues over any
other neutral.”24 Parties could also ask the med-arbiter to Those reasons explain why acceptance of the “same-
neutral med-arb” system is not universal. For instance,
decide between the parties’ last best offers, or within the
the American Arbitration Association recommends that
range bounded by those offers.25
the same person not serve as both mediator and arbitra-
These factors may make med-arb particularly at- tor in the same case: “Except in unusual circumstances,
tractive for parties involved in small cases that do not a procedure whereby the same individual who has been
warrant big dispute-resolution costs. Parties also might serving as a mediator becomes an arbitrator when the
be willing to use med-arb in bigger disputes that they mediation fails is not recommended, because it could in-
would like to solve in a fast, efficient and cost-effective hibit the candor which should characterize the mediation
manner over which they would like to retain relative process and/or it could convey evidence, legal points or
control.26 settlement positions ex parte, improperly influencing the
arbitrator.”30 The AAA nevertheless offers a sample med-
arb clause to those parties who would like to use med-
II. Four Potentially Problematic Issues
arb to resolve their disputes: “If all parties to the dispute
Regarding Med-Arb agree, a mediator involved in the parties’ mediation may
Despite all the advantages to parties in allowing the be asked to serve as the arbitrator.”31
same neutral to play the role of mediator and arbitrator
in the same case, med-arb raises important practical, ethi- This section will focus on four major issues that may
cal, and legal issues. hinder the process of the execution and recognition of the
arbitral award rendered at the end of a med-arb. They
The choice of a med-arbiter might present a practical include: (A) the rule of confidentiality in mediation, (B)
difficulty. Although one might think that the parties can the right to know of and to confront the other side’s argu-
save time in the appointment process, since they only ment, (C) the rule of impartiality, and (D) the rule of inde-
need to find one person instead of two to intervene as pendence. In the last section (IV), we will discuss whether
a mediator and arbitrator—which may be true in some these issues can be addressed in such a way that the risk
cases—the parties might actually have trouble find- of challenging med-arb awards may be reduced.
ing and agreeing on the choice of a neutral who has the
(very unique) skills required to assume both functions. If A. Med-Arb and Confidentiality
the med-arb is not properly conducted, it might also be 1. Presentation of the Issue
difficult for the parties to know exactly when the media-
The Uniform Mediation Act (UMA), which has been
tion phase has ended and when the arbitration phase
adopted in twelve jurisdictions and introduced in another
has begun. Who should decide that the mediation has
two,32 provides parties to a mediation with a general priv-
failed and that it is time for the parties to enter arbitra-
ilege33 protecting the mediation communications from
tion? When should such a decision intervene? Also, ef-
involuntary disclosure in later proceedings,34 explicitly
ficiency—in theory one of med-arb’s advantages—might
including the arbitral proceedings.35 The privilege may be
not be achieved if the set of facts relevant to mediation
waived, but if fewer than all parties waive the privilege,
differs from the facts pertinent to the arbitration.27
the non-waiving party will be able to prevent the use
The hybrid nature of med-arb may also alter the of mediation communications in the subsequent proce-
behavior that parties would have in a “pure” mediation. dure.36 Moreover, even the states that have not adopted
Because they know that their mediator can potentially the UMA may also prohibit the use of mediation commu-
become their arbitrator, parties may be reluctant to fully nications in other proceedings. And further complicating
participate in the mediation process and may avoid talk- the situation, some states may regulate the mediation
ing openly from fear that what they would say during communications within a specific subject area (such as
the mediation could be used against them in the arbi- labor law in Massachusetts).37

66 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 The confidentiality of mediation communications Option 1: Confidential Information Can Be
functions on two levels. First, this rule applies to the joint Communicated During Caucus but Cannot Be Used in
sessions held during a mediation and thus binds all the the Arbitration Phase
mediation participants (the parties and the mediator). A first way to address that question would be to
This is what I call the first level of confidentiality. But allow the med-arbiter to hold caucuses during which
this rule also operates at a second level, by protecting the confidential information can be communicated to her
information communicated by one party to the mediator by one party, but to prohibit the med-arbiter from using
during what are called “caucuses.” A caucus is a “private that confidential information in her arbitral deliberations.
meeting between mediator and one party to explore new This option would both preserve the confidentiality of
options, to clarify proposals, to allow the parties to cool caucuses and respect the rule preventing the arbitrator
down, to gather facts for the mediator’s use or to give from deciding based on ex parte communication. Hence,
the parties a break from negotiations.”38 This private this option seeks to maintain the specific features of, re-
session, requested by either the mediator or one of the spectively, mediation and arbitration, making med-arb a
parties, also allows the other party to meet with his/her simple juxtaposition of a “pure” mediation and a “pure”
own party members, make the necessary phone calls, arbitration.
and rest.39 Caucuses can be very useful to the mediator to
facilitate agreement when the conversations in the joint Martin C. Weisman has adopted this position, argu-
sessions are not constructive anymore: each party has the ing that the med-arbiter must be able to disregard media-
opportunity to talk in private to the mediator with the tion communications during the arbitration phase and
assurance that all the information she does not want to that nothing disclosed in caucus can be considered in
share with the other party will remain confidential. This the arbitration phase unless introduced by either party
is what I call the second level of confidentiality. independently during the arbitration.41 The med-arbiter
should thus “forget” about all the confidential informa-
In mediation, it is thus perfectly conceivable that tion she was told in private sessions.42
the process ends with some information disclosed to the
mediator but still withheld from the other parties. This Is that solution realistic? Studies show that “judges
asymmetry is not problematic because the mediator does frequently cannot ‘close the valves of (their) attention.’
not have any decision-making power—her role is to help The presumption that people can ignore what they know,
the parties to find a solution to their dispute, not to arbi- or use it for some purposes but not for other purposes,
trate the conflict. may sometimes be true, but often is little more than a
convenient fiction.”43 This is why the authors of those
By contrast, this unilateral exchange of information studies, Wistrich, Guthrie and Rachlinski, recommend,
from one party to the neutral, to the exclusion of the for instance, that a judge who supervises settlement
other parties, is far more problematic when the neutral is discussions not serve as the fact finder in the same case.44
invested with a decision-making mandate, as in the case Further, research has shown that judges are less able to
of the arbitrator. Most ethical rules governing arbitra- ignore inadmissible information when making determi-
tions expressly forbid ex parte contacts with the arbitrator, nations that they consider less amenable to judicial re-
i.e. in the absence of the other parties to the arbitrated view.45 Those findings have led Brian A. Pappas to write,
dispute. For instance, the American Arbitration Associa- in response to Martin C. Weisman: “If judges are unable
tion’s Commercial Arbitration Rules provide that “No to reliably disregard information, how can we expect
party and no one acting on behalf of any party shall arbitrators (who face little risk of review) to not consider
communicate ex parte with an arbitrator or a candidate mediation communications during the arbitration phase?
for arbitrator concerning the arbitration,” except for the (…) Being human means that we are not completely in
purpose of selecting a candidate arbitrator.40 control of our thought processes.”46 Accordingly, even the
If information in a mediation can be communicated most ethical med-arbiter may be challenged by a solution
exclusively to the mediator during caucuses, and if such of “deliberate amnesia.”
unilateral communication of information is strictly for- Option 2: Confidential Information May Be
bidden in an arbitration, what is the correct rule in med- Communicated During Caucus but Has to Be Disclosed
arb, which is supposed to combine the characteristics of to the Other Parties Later on in the Mediation
mediation and arbitration?
In a second option, a med-arbiter would be permit-
2. Confidentiality Issue In Caucuses ted to hold caucuses during the mediation stage, but
There are different ways to address the question of everything said during those private sessions would
the communication of confidential information during have to be disclosed to the other parties at some point
caucuses. during the mediation.47 In this second option, the parties
would know that anything they tell to the med-arbiter
during caucuses would have to be communicated to the
other party later on in the mediation phase. In such a

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 67
framework, the purpose of caucusing would be limited that a pure mediation does not: the parties are certain
to facilitating the dialogue between the parties. Because that their dispute will be solved at the end of the process
it might be difficult to reveal some things in front of all of (through the mediation phase or if not, through the arbi-
the participants of the mediation, caucuses as described tration phase). Of course, this third option reinforces the
here would enable a party to reveal some information counsels’ and the med-arbiter’s duty to provide accurate
to the mediator first, and then, as a second step, disclose information to the parties before the med-arb starts. In
that information to the other parties, with the help of the such a scenario, the parties’ counsel and the med-arbiter
mediator, if necessary. should ensure that the parties have a clear understand-
ing of what a caucus is, and what its advantages are, and
However, this option is not satisfactory either, that they would be deprived of private sessions with the
because it does not guarantee the appearance of impar- neutral if they opted for a med-arb rather than for a pure
tiality. A party could be legitimately concerned that not mediation.
all of the information that has been communicated to
the med-arbiter during caucuses will be disclosed later 3. Confidentiality Issue in Joint Sessions
in the mediation. Moreover, this option could end up We have addressed the issue of confidentiality in the
working against the parties, because mediation is sup- context of caucus (what I called the second level of con-
posed to be a safe place for discussion and open dialogue fidentiality in mediation, which binds one party and the
between the parties and also between the parties and the mediator). What about the confidentiality issues raised
mediator. Consider the situation in which one party feels by the general mediation process (what I called the first
comfortable enough to start telling the med-arbiter con- level of confidentiality in mediation, which binds all the
fidential things that she does not want to be known by participants in a mediation—the parties and the media-
the other parties. That party would have no other choice tor), beyond the confidentiality issues specific to private
than to disclose that confidential information to the other sessions?
parties. However, it would be contrary to the spirit of
mediation in my view to “punish” the party for being According to some authors, the confidentiality pro-
“too ready” to talk openly to the mediator. tecting mediation implies that the med-arbiter in the arbi-
tration phase can only use the pieces of information that a
Option 3: No Caucus Can Be Held in a Med-Arb “pure arbitrator” would have at her disposal: namely the
The third option would consist of preventing the elements contained in the file of the case or the elements
med-arbiter from holding caucuses. In this scenario, all that would be exposed by the parties during the arbitral
the information disclosed by one party would be com- hearings.49 This position results from a strict interpreta-
municated to the mediator, as well as the other parties, at tion of the different acts (such as the Uniform Mediation
the same time, during the joint sessions. Act), statutes or guidelines providing that the mediation
communications cannot be used in other proceedings,
This third option is the only one that, from a strictly
including arbitral proceedings, with no exception for
legal perspective, does not raise any issue. It is true that
med-arb.
option 3 is tantamount to depriving the med-arbiter of
a powerful tool in the mediation phase. Many praise When taking over the role of the arbitrator, the med-
the efficiency of caucusing in mediation.48 However, arbiter obviously already knows the facts of the case and,
one should not forget about the specificities of med-arb. depending on how far the mediation process has gone,
It is quite common that a mediator decides to caucus potentially knows more than what a “pure arbiter” could
when she feels that the tension between the parties is too find in the file of the case, including the feelings of the
important to generate constructive discussions. But we parties, their personal past, the history of their personal
have already seen that parties may be incentivized to be relationship, their underlying conflicts, and more. Should
more reasonable in a med-arb than in a “pure” mediation the med-arbiter forget about everything she heard while
because they know that the med-arbiter is empowered to acting as a mediator that has not been formally discussed
decide the final outcome of their case if they cannot find in the arbitration phase? Does the first level of confi-
an agreement (see p. 65). We can thus assume that the dentiality in mediation prevent the med-arbiter from
situations where caucuses would be necessary or useful making use of that additional information in her arbitral
would be less likely to occur in a med-arb than in a pure deliberations?
mediation. Of course, caucuses are not limited to situa-
I do not think so. We have already seen that “delib-
tions where the parties are being unreasonable. There are
erate amnesia” is not a reliable solution, since human
other reasons why a mediator might want to caucus, for
beings struggle to ignore information of which they are
instance, when a party seems a bit lost or feels pressured
aware. More importantly, “deliberate amnesia” would not
in the process. In those cases, unfortunately, the inabil-
be consistent with the decision of the parties to opt for
ity of the med-arbiter to ask for a private session with a
med-arb. Med-arb is a voluntary process: the parties to a
party might be a real disadvantage. Nevertheless, this
med-arb have chosen, among a broad variety of dispute
disadvantage compared to a pure mediation is, in my
resolution mechanisms, a kind of ADR precisely charac-
opinion, acceptable, because med-arb offers a guarantee

68 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
terized by the fact that the mediator is supposed to turn tual issues to an arbitrator if the media-
into an arbitrator should the parties reach an impasse in tion fails; and (3) evidence of whether the
the mediation phase.50 As explained above (see supra p. parties agree to waive the confidentiality
65), one of the reasons why parties might choose med-arb requirements imposed on the mediation
over pure arbitration is that they wish to avoid having process by (the Ohio law) in the event
to re-explain the case from scratch to a new arbitrator, in that their disputes are later arbitrated.52
the interest of economy and/or efficiency. Moreover, the
parties have chosen the specific track of mediation to start The same year, the Texas First District Court of Ap-
their dispute resolution process. They have thus chosen peals concluded that: “Just as it would be improper for a
a form of ADR centered on discussions that are gener- mediator to disclose any confidential information to an-
ally more focused on the parties’ interests than on their other arbitrator of the parties’ dispute, it is also improper
positions, which is a kind of discussion normally not held for the mediator to act as the arbitrator in the same or a
during arbitration proceedings. Is the choice of med-arb related dispute without the express consent of the par-
not an indication that the parties actually wish the med- ties.”53 Three years later, a Massachusetts Superior Court
arbiter to rely on the in-depth knowledge of the case she ruled that any waiver of the mediation privilege had to
acquired during the mediation phase? If not, what would be clear and explicit by the parties holding the privilege,
be the point of appointing the same neutral to perform as even in the med-arb context.54
mediator and arbitrator in the same dispute? In summary, according to current doctrine, med-arb
The different regulations prohibiting the use of awards rendered based on mediation communications, as
mediation communications in subsequent arbitration opposed to arbitration evidence, may be subject to being
proceedings do not account for the situation where the vacated under the Federal Arbitration Act or a similar
parties have deliberately chosen the same person to be state statute without a proper waiver by the parties al-
the mediator and the arbitrator of their dispute. I think lowing the med-arbiter to use mediation communications
that those rules should be adapted to take into account in the arbitration phase.55
the specific situation of a “same-neutral med-arb.” Given the very nature of the “same-neutral med-arb,”
Currently, the med-arbiter is only allowed to take I think that the various statutes, acts and guidelines gov-
into account mediation communications in fashioning erning arbitration in the United States should be adapted
her award if the parties have expressly consented to it to take into account the specificities of med-arb. It would
in writing. The case law demonstrates that without such be much more consistent with both the characteristics of
an express consent, a losing party who can prove the use med-arb and with the choice made by the parties to opt
of mediation information by the med-arbiter during the for med-arb rather than for “pure” mediation followed by
arbitration phase can successfully challenge the med-arb “pure” arbitration, that the default rule allow the med-
award. arbiter to use mediation information in the arbitration
phase, including in fashioning her award. I thus think
In Bowden v. Weickert, for instance, the Ohio Court that in the specific circumstances where the parties have
of Appeals vacated a med-arb award because the med- agreed to appoint, in the same dispute, the same person
arbiter clearly used mediation communications to fashion as a mediator and arbitrator, the confidentiality imposed
it. The court reasoned: “the arbitrator had a duty to on the mediator should be attached only to the person of
remain impartial (…) and to protect the confidentiality of the mediator and not to the function of the mediator. In
all mediation communications.”51 Hence, the med-arbiter other words, if the mediator is the same person as the arbi-
could only rely upon evidence presented at the arbitral trator in the same case, she should not be prevented upon
hearing when crafting his arbitration award. Because he assuming the different function of arbitrator from making
failed to do so, the Court concluded that he had exceeded use of the additional knowledge she acquired during the
his authority. The Court nevertheless recognized the par- mediation phase, even if that information would not be
ties’ right to engage in med-arb, but some rules had to be provided to a “pure arbitrator” in a typical case.56
respected “at the outset:”
Two clarifications must be made. First, here I am only
At a minimum, the record must include considering the mediation information communicated
clear evidence that the parties have during the joint sessions, as opposed to caucus, which I
agreed to engage in a med-arb process, think should be avoided in med-arb for the different rea-
by allowing a court-appointed arbitra- sons explained in this article.57 Second, of course, the par-
tor to function as the mediator of their ties should remain able to prevent the med-arbiter from
dispute. The record must also contain: using mediation information in the arbitration phase
(1) evidence that the parties are aware (despite the risks that this artificial solution presents)58
that the mediator will function as an but, in order to do so, their written agreement should be
arbitrator if the mediation attempt fails; required. My suggestion is thus to reverse the current
(2) a written stipulation as to the agreed default rule: under the rule proposed here, a waiver by
method of submitting their disputed fac- the parties would no longer be required to authorize the

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 69
use of mediation communications in crafting the award. and the right to equal treatment in arbitration constitute
Instead, a written agreement of the parties would be additional reasons as to why caucuses should be avoided
necessary to prevent such use. during the mediation phase. By authorizing the use of
caucuses in the first part of a med-arb process, the risk is
B. The Right to Know of and Confront the Other created that the med-arbiter will take into account some
Side’s Arguments information provided by one party without giving the
The second issue raised by the hybrid nature of med- other parties a fair chance to confront that information
arb concerns the right to know of and confront the other during the arbitration phase, which constitutes a blatant
side’s arguments. violation of due process requirements.
“It is a firmly established rule of common law that a What if the parties want to be able to caucus with
judge or anyone exercising a judicial function must hear the med-arbiter during the mediation phase? Given
both sides of every case: not only the plaintiff or pros- the rights at stake, a simple agreement of the parties to
ecutor, but also the defendant must be heard.”59 In the maintain the use of caucus in med-arb is not satisfactory.
United States, this principle is part of the broader concept The parties should at least expressly agree, in writing and
of “due process.” in advance, that the med-arbiter can hold caucuses and that
the med-arbiter can use the information received during
Due process also applies to arbitration. Indeed, de- those caucuses in fashioning the award. However, even
spite the private nature of arbitration: this precaution might not be sufficient to remove any risk
Making certain the award is enforceable of annulment of the award by court. I am not aware of
is one of the most central duties of the cases that have addressed that question under US law, but
arbitral tribunal. If the arbitral tribunal the risk does exist that a court will refuse to enforce an
wants to issue an enforceable award, agreement by which the parties actually agree to waive in
the process has to meet certain quality advance (without any exact knowledge regarding what
standards. These minimum quality stan- they are renouncing) their right to confront the argu-
dards are, of course, procedural. They ments made by the other parties during caucuses. The
can be called due process requirements courts could indeed consider that there is more at stake
just like the minimum standards in ordi- than the sole private dispute of the parties and that such
nary court procedure. In the same way, agreement might undermine the confidence of the public
they establish the minimum procedural in the arbitrators’ integrity, for instance. The same is true
safeguards necessary for someone to be in an international context. Some jurisdictions are likely
deprived of his property or other rights. to consider for public policy reasons that a party cannot
As such, they can be considered aspects waive in advance his or her rights to due process, or some
of such elements as procedural fairness, aspects of due process such as the right to confront the
opportunity to be heard, and equal treatment other parties’ arguments.65
as well as access to justice.60
Therefore, and in addition to the previous develop-
Due process in arbitration thus encompasses the ments regarding the confidentiality issue (see supra,
right of the parties to equal treatment61 and the right pp. 67-68), it is safer not to hold caucus in a med-arb, in
to be heard (on a claim or on a fact alleged or on some order to obtain the execution and recognition of med-arb
evidence presented by the other party). The right to awards.
be heard in arbitration,62 or at least the right to “have
C. Med-Arb and Impartiality
a meaningful opportunity to be heard”63 in arbitration
proceedings, has been upheld by the American courts We have already seen that the confidentiality rule in
on several occasions. Failure to respect those minimum mediation and the right to know of and to confront the
procedural standards would constitute a ground for suc- other parties’ arguments are an obstacle to the use of cau-
cessfully challenging the award. cus in med-arb. So is the principle of impartiality, defined
as the absence of any inclination or disinclination towards
Those principles imply that, similar to a judge, an the parties. Indeed, case law indicates that the execution
arbitrator can normally make a decision only on the and the recognition of awards rendered in “pure arbitra-
basis of elements that are known by all the parties and tion” are declined for breach of impartiality when it is
on which all parties have been given the opportunity to proven that the arbitrator has had unilateral contacts with
comment. This is partly why an arbitrator, once appoint- one party while the dispute was ongoing.66 Therefore, the
ed, cannot have a private meeting with one party in the holding of caucus meetings during the mediation phase of
absence of the other parties.64 a med-arb is likely to lead to the same outcome.
Again we see the clash between the core procedural A judge is presumed to be “impartial until proven
requirements applicable to arbitration and the common otherwise. However, subjective impartiality requires a
practice of caucusing in mediation. The right to be heard very delicate effort in judging; judges should endeavor

70 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
not to have any bias, prejudice, or precondition, and D. Med-Arb and Independence
should avoid the appearance of favoring or hindering any It is another fundamental principle in arbitration that
party to a case.”67 No matter how righteous the med-ar- an arbitrator must be and remain independent through-
biter is, the simple fact that a party meets the arbitrator of out the whole arbitration process. By independence, I
their case in the absence of the other parties is enough to refer to the absence of personal, professional or finan-
make those parties fear that the med-arbiter is no longer cial interests and ties with one party, whether direct or
impartial.68 indirect.73 Such ties could influence the arbitrator in her
The style adopted by the med-arbiter in the media- decision-making process. A lack of independence may
tion phase may also cause the parties to question the be a ground to challenge an award. Hence, it must be
fairness of the med-arb in its arbitration phase. Media- guarded against from the outset.
tors can use a variety of different styles and approaches. Again, this core principle of arbitration may be at risk
Generally, styles range from purely facilitative to purely in the context of med-arb. The mediator will probably
evaluative. In a purely facilitative approach, a mediator learn the potential settlement range of the parties during
will assist the parties in “identifying and exploring inter- the mediation phase. “Once in arbitration, however, the
ests, concerns, motivations, goals, common ground and neutral is charged with impartially rendering the award
possible resolutions. However, the mediator will avoid according to the evidence, and decisions falling outside
drawing conclusions for the parties or offering opinions the settlement range will naturally be met with displea-
as to value, legal positions, rights, merits of the case or sure by the disadvantaged party.”74 The fact that an arbi-
potential litigation outcome.”69 In sum, such a media- trator may arrive at a decision through objective and legal
tor does not evaluate the case. By contrast, in using an assessment that does not fall into the settlement range
evaluative style, “a mediator is likely to offer opinions on reached by the parties at the end of the mediation phase
strengths and weaknesses of a case, to predict the out- may create a fear of appearing impartial, and thus poten-
come at trial and to initiate proposals for settlement.”70 tially impede the med-arbiter’s independence. “In sum,
Evaluative mediations focus more on the merits of the the Med-Arb hybrid provides additional pressure for the
parties’ legal positions, which is why not everyone in the arbitrator to issue a compromised award that ‘splits the
mediation community is in favor of evaluative media- baby,’ a common critique of arbitration.”75
tion. Some even view it as an oxymoron.71 In any case,
even the proponents of this style of mediation stress the Is this challenge insurmountable? I do not think so,
importance for the mediator to be cautious because “once but the responsibility of the med-arbiter in this respect is
an evaluation is made, the mediator’s appearance of even greater than in a “pure” arbitration.
impartiality may be impaired.”72 This risk is even greater First of all, the med-arbiter should pay special atten-
in med-arb. Could a party sincerely believe that she will tion to the necessity of rendering an award by reference to
benefit from a fair, comprehensive, and equal examina- legal principles. Of course, we have seen that the parties
tion of her file if she is told by the med-arbiter during the could limit the med-arbiter’s discretion (to the settlement
mediation phase that her claim is excessive and that she range reached by the parties during the mediation phase
is unlikely to get what she demands in court? for instance), and the med-arbiter should respect the
In short, the evaluative approach, whose use is al- parties’ intent. But in doing so, the med-arbiter should
ready criticized by some in a “pure mediation,” increases still abide by the law76 unless otherwise agreed by the
the risk that a party who received a negative evaluation parties.77
of her position during the mediation phase will ulti- Second, the parties should be explicitly informed that
mately challenge the award rendered at the end of the if they do not find an amicable settlement to their dispute,
med-arb process. To avoid any suspicion of partiality, the the med-arbiter will have to decide the case by reference
med-arbiter should thus refrain from providing the par- to legal principles (again, unless otherwise agreed by the
ties with an evaluation of their case. parties). The med-arbiter should specifically insist on the
Finally, and more generally, a med-arbiter might have fact that the application of the legal principles to the facts
to pay more attention to deciding the case impartially of the case could lead her to render an award that may
compared to a judge or an arbitrator. Indeed, unlike a or may not correspond to the position of a party, or that
judge or an arbitrator, the med-arbiter will have spent might potentially not be within the range of settlement
hours with the parties (listening to their stories, witness- the parties reached in the mediation phase.
ing their feelings, and trying to discover their interests) Finally, to decrease the risk of a party challenging the
before starting the arbitration phase. However, media- award, the med-arbiter should draft the award with great
tors, like arbitrators, are already subject to the duty of care and precision.
being impartial. Med-arbiters should thus be properly
acquainted with dealing with that imperative.

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 71
III. Conclusion are required if the mediator and the arbitrator are
It is time now to make a final assessment of the two different persons, which is why the words
“single-neutral med-arb.” Among other drawbacks, I “mediation-arbitration” are adequate.
have focused on four issues. Those issues pertain to the • The regulations should make clear that they apply
core principles of mediation (the confidentiality rule) or only to med-arb as defined in the previous point
of the judicial function (the right of the parties to know of (same-neutral med-arb) and not to mediation-arbi-
and confront the other side’s arguments, and impartiality tration.
and independence of the med-arbiter). Does that mean
that there should be no place for med-arb among the • They should also state that the rules normally ap-
dispute resolution mechanisms? It all depends on how plicable to mediation and arbitration, respectively,
we envisage med-arb. apply to med-arb, subject to the following adjust-
ments:
If we see med-arb as a simple sequence of a classic
mediation and a classic arbitration, then we must con- ¤ Contrary to “pure” mediation, the default rule
clude that med-arb fails to respect the basic procedural should be that the med-arbiter would be allowed
rights of the parties and, therefore, should not be granted to use the information received during the joint
the same value as other dispute resolution mechanisms. sessions of the mediation in the arbitration phase.
Parties could agree to derogate from this default
In contrast, if we accept that med-arb is a dispute res- rule, by explicitly and in writing, preventing the
olution mechanism as such, that it is a real hybrid figure, med-arbiter from using mediation information in
a real product that combines mediation and arbitration the arbitration phase, after having been warned
in a unique synthesis, rather than the result of a simple by the med-arbiter that studies demonstrate that
addition of mediation and arbitration—if we recognize, people can hardly ignore what they know (which
in other words, that med-arb is called “med-arb” and of course is not a reason for the med-arbiter not
not “mediation-arbitration,” then there is no reason to to make the best efforts to disregard mediation
deprive ourselves of this original type of ADR, which can communications).
be both effective and cost-efficient.
¤ Unless otherwise agreed by the parties, the med-
In my view, med-arb deserves to be regulated as a arbiter should be prevented from caucusing dur-
full-fledged dispute resolution mechanism. The current ing the mediation phase, because of the legal and
regimes respectively applicable to mediation and arbitra- ethical issues those private sessions raise. The
tion do not fit the med-arb model. They have proven un- parties that would nonetheless agree to maintain
able to meet med-arb’s features, which, I think, explains caucus should sign a written agreement explicitly
why some are reluctant to use it. allowing the med-arbiter to caucus with the par-
The current acts, statutes, rules or guidelines regu- ties separately and to make use of the information
lating mediation and/or arbitration in the United States communicated by them to the med-arbiter during
and also internationally, such as the ICC rules, should those caucuses. However, the med-arbiter should
incorporate a section dedicated to med-arb that includes draw the attention of the parties to the risk that
the following points: such an agreement might not be enforced by the
courts, whether in the United States or abroad,
• They should define med-arb as an alternative for public policy reasons and that consequently
dispute resolution mechanism characterized by the the courts might refuse to execute or recognize
existence of two distinct phases—the mediation a med-arb award if one party can prove that the
phase and the arbitration phase should the parties med-arbiter actually used information received
fail to reach an amicable agreement by themselves during caucuses in fashioning the award.
in the mediation phase—in which the mediator
and the arbitrator appointed by the parties would ¤ The med-arbiter should adopt a facilitative
be the same person. The word “med-arb” would approach and avoid an evaluative one, unless
thus be limited to the “same-neutral med-arb.” By expressly and clearly required by the parties in
contrast, “mediation-arbitration” would refer to a writing. In practice, it might be hard to draw
mediation followed by an arbitration proceeding a line between the respective spectrums of the
with two different neutrals assuming the roles of evaluative and the facilitative approaches, but in
mediator and arbitrator. Indeed, the word “med- essence, the med-arbiter should refrain from giv-
arb” indicates that it is a dispute resolution mecha- ing one party the impression that she has already
nism governed by its own regime (such as the one made up her mind on the dispute and that there
proposed below). Some adjustments to the rules is no point in presenting his or her case in the
governing mediation and arbitration are necessary arbitration phase. An evaluative approach should
precisely because the mediator and the arbitrator also be avoided in mediation because there is no
are the same person. By contrast, no adjustments certainty that the med-arbiter will reach the same

72 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 conclusion based on the evidence that is present- Kurkela Matti S. & Turunen Santtu, Due Process in
ed later on during the arbitration phase. International Commercial Arbitration (Oxford Univ.
Press, 2nd ed. 2010)
• The parties should be required to expressly agree,
in clear and unambiguous terms, to opt for med- Lipsky David B. & Seeber Ronald L., The Appropriate
arb as defined above, with a same neutral desig- Resolution of Corporate Disputes—A Report on the
nated as the mediator and the arbitrator of their Growing Use of ADR by U.S. Corporations (Cornell/
dispute. This agreement would count as recogni- PERC Inst. on Conflict Res., 1998)
tion that they are subject to all of the above rules.
Nolan-Haley Jacqueline M., Alternative Dispute
• Finally, parties should be allowed to appoint only Resolution in a Nutshell (West group, 2nd edition
neutrals who can demonstrate that they are ac- 2001)
complished and experienced in both mediation and
Ordover Abraham P. with Flores G. Michael and Do-
arbitration.
neff Andrea, Alternatives to Litigation: Mediation,
There is much more to say about med-arb. For Arbitration, and the Art of Dispute Resolution
instance, the question of evidence in med-arb and the (Notre Dame, Ind.: NITA, 2nd ed. 1993)
question of the necessity of specific training to perform
Picker Bennett G., Mediation Practice Guide, A
as med-arbiter78 could each be the subject of an entire ar-
Handbook for Resolving Business Disputes (Bethesda,
ticle. However, the rules that I propose in this article have
Md.: Pike & Fischer, Inc., 1998)
the merit of clarifying the framework of med-arb and
securing to the maximum extent possible the viability of Várady Tibor, Barceló III John J., Kröll Stefan & von
med-arb awards. Mehren Arthur T., International Commercial Arbi-
tration—A Transnational Perspective (St. Paul, MN:
Some might think that the idea of regulating med-arb
West Academic Publishing, 6th ed. 2015)
runs counter to the flexibility supposed to characterize al-
ternative dispute resolution mechanisms and that the use Alternative Dispute Resolution in State and Local
of med-arb should not be constrained by rules. I disagree. Governments: Analysis and Case Studies (Otto J. Het-
The rules that I propose are only a default regime. Parties zel & Steven Gonzales eds., ABA Book Publishing, 2015)
would remain able to deviate from those rules (true, with
certain formalities to be respected but parties would still Handbook on Mediation (Thomas E. Carbonneau &
be free to choose the kind of med-arb that they think is Jeanette A. Jaeggi eds., American Arbitration Association,
best suited for them). Moreover, flexibility must not be 2006)
granted at the expense of elementary procedural rights. Periodicals
There is no point in refusing to regulate med-arb in order
to preserve flexibility if the courts can refuse to recognize Alphabetically:
or execute the med-arb award because minimum safe-
Alberti Christian P. & Bigge David M., Ascertaining the
guards have not been respected in the
content of the applicable law and iura novit tribunus: approach-
med-arb proceeding.
es in commercial and investment arbitration, 70(2) Disp. Res.
To conclude, the rules that I propose require from J. 1-20 (2015)
med-arbiters as well as the parties’ counsel an enhanced
Bartel Barry C., Med-Arb as a Distinct Method of Dispute
duty to provide information to the parties. Parties can-
Resolution: History, Analysis, and Potential, 27 Willamette
not opt for a med-arb process if they do not know what
L. Rev. 661 (1991)
mediation is, what arbitration is, what a caucus is, what
the (truly powerful) advantages of caucusing are, and Barsky Allan, “Med-Arb”: Behind the Closed Doors of a Hy-
what the difference between an evaluative and a facilita- brid Process, 51 Fam. Ct. Rev. 637 (2013)
tive approach is, etc. This enhanced duty to inform the
parties may seem like a heavy burden, but this obligation Blankenship John T., Developing your ADR attitude: Med-
provides an opportunity to educate the parties about the Arb, a template for adaptive ADR, 42 Tenn. B.J. 28 (2006)
countless ways to resolve a dispute, and that will only Blankley Kristen M., Keeping a Secret from Yourself? Confi-
benefit the realm of ADR. dentiality When the Same Neutral Serves Both as Mediator and
as Arbitrator in the Same Case, 63 Baylor L. Rev. 317 (2011)
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2015)
rev. 17 (2008)
Van Leynseele Patrick, Med-Arb et tierce décision obliga- Endnotes
toire: les enjeux, les écueils, les solutions et les précautions à 1. Actually, this quote would not be entirely correct and would be
prendre, 1 Jurim Pratique, 101 (2014) constructed from this sentence: “Imagination is more important
than knowledge” (interview of Albert Einstein by George Sylvester
Weisman Martin C., Med-Arb: The Best of Both Worlds, 19 Viereck in the October 26, 1929 issue of the Saturday Evening Post).
Disp. Resol. Mag. 40 (2013) 2. Alternative Dispute Resolution in State and Local
Governments: Analysis and Case Studies at 8 (Otto J. Hetzel &
Weixia Gu, The Delicate Art of Med-Arb and its Future Insti- Steven Gonzales eds., ABA Book Publishing, 2015).
tutionalisation in China, 31(2) Pac. Basin L. J. 97 (2014)
3. Gu Weixia, The Delicate Art of Med-Arb and Its Future
Wistrich Andrew J., Guthrie Chris & Rachlinski Jeffrey J., Institutionalisation in China, 31(2) Pac. Basin L. J. 97, 97 (2014).
Can Judges Ignore Inadmissible Information? The Difficulty 4. Allan Barsky, “Med-Arb”: Behind the Closed Doors of a Hybrid
Process, 51 Fam. Ct. Rev. 637, 637-638 (2013). This author notes that
of Deliberately Disregarding, Cornell Law Faculty Publica-
the parties are free to “agree in advance whether the arbitrated
tions. Paper 20 (2005) decisions will be binding or nonbinding (sometimes called
“recommendatory”). Most arbitrators and theorists favor binding
Cases arbitration so the process necessarily results in a definite outcome.”
Chronologically: 5. Kristen M. Blankley, Keeping a Secret from Yourself? Confidentiality
When the Same Neutral Serves Both as Mediator and as Arbitrator in the
Ewing v. Act Catastrophe-Tex. L.C., 375 S.W.3d 545, 551- Same Case, 63 Baylor L. Rev. 317, 320 (2011).
52 (Tex. App. 2012) 6. Id. at 323.
7. Allan Barsky, supra note 4, at 638.
Town of Clinton v. Geological Servs. Corp., 21 Mass. L.
8. Allan Barsky, supra note 4, at 638. Please note that this article
Rep. 609 (2006)
focuses on med-arb as defined as a process composed of a
Bowden v. Weickert, 2003-Ohio-3223 (Ct. App.) mediation phase chronologically followed by an arbitration phase.
9. Like the med-arbiter, the early neutral evaluator may use
In re Cartwright, 104 S.W.3d 706, 714 (Tex. App. 2003) techniques related to mediation and arbitration. However, her
role is primarily to provide the parties with an evaluation of the
Twp. of Aberdeen v. Patrolmen’s Benev. Ass’n, Local 163, case, based on the evidence and the arguments presented to her
286 N.J. Super. 372, 669 A.2d 291 (Super. Ct. App. Div. by each party. She might help the parties to reach an agreement
but only after rendering an evaluation report, which is never
1996)
binding (contrary to the arbitral decision rendered by the med-
arbiter) (Allan Barsky, supra note 4, at 639). See also, on this
Nordstrom-Janzon and Nordstrom-Lehtinen v. Netherlands,
topic, Alternative Dispute Resolution in State and Local
Application No. 28101/95 (Eur. Ct. Hum. R. 1996) Governments: Analysis and Case Studies at 28 (Otto J. Hetzel &
Steven Gonzales eds., ABA Book Publishing, 2015).
Univ. of Tex. Med. Sch. v. Than, 901 S.W.2d 926, 928 (Tex.
10. A parenting coordinator will use methods similar to mediation
1995) and arbitration but also akin to evaluation, parenting education,
co-parent counseling, monitoring or enforcement. The scope of
Nolan v. Colorado Cent. Consol. Min. Co., 63 F. 930, 1894
the techniques used by a parenting coordinator is thus broader
U.S. App. LEXIS 2460 (8th Cir. Colo. 1894) than that of a med-arbiter. Moreover, the parenting coordination
usually is less formal than med-arb, especially in its second stage

74 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 (for instance, the parenting coordinator may decide on certain 26. Id. at 34-35; Patrick Van Leynseele, supra note 20 at 104.
issues without “conducting a court-like hearing for each issue to 27. Kristen M. Blankley, supra note 5 at 336-337.
be decided”). Also, parenting coordination will usually occur after
a judicial decision has been rendered and is supposed to help the 28. Id. at 325; Patrick Van Leynseele, supra note 20 at 106; Handbook
parents to implement the order, whereas med-arb is usually used on Mediation at 175 (Thomas E. Carbonneau & Jeanette A. Jaeggi
by the parties with the hope of avoiding going to court (Allan eds., American Arbitration Association, 2006).
Barsky, supra note 4, at 638-639). 29. Id. at 336.
11. Kristen M. Blankley, supra note 5 at 335 (footnote 63). 30. American Arbitration Association, Drafting Dispute Resolution
12. Thomas J. Brewer & Lawrence R. Mills, Combining mediation & Clauses—A practical Guide, 33 (2013), available online at https://
arbitration, 54(4) Disp. Res. J. 32, 34 (1999). www.adr.org/aaa/ShowPDF?doc=ADRSTG_002540 (last visited
April 18, 2017).
13. David B. Lipsky & Ronald L. Seeber, The Appropriate
Resolution of Corporate Disputes—A Report on the 31. Id. at 34.
Growing Use of ADR by U.S. Corporations at 12 (Cornell/ 32. See the enactment status map on the Uniform Law
PERC Inst. on Conflict Res., 1998). More than 600 companies Commission’s website http://www.uniformlaws.org/Act.
responded to the survey. aspx?title=mediation%20Act (last visited April 12, 2017).
14. Robert N. Dobbins, Practice Guide: The Layered Dispute Resolution 33. The UMA distinguishes between the privilege (Sections 4-6)
Clause: From Boilerplate to Business Opportunity, 1 Hastings Bus. and the confidentiality (Section 8). “The evidentiary privilege
L.J. 161, 162 (2005). See also Martin C. Weisman, Med-Arb: The Best granted in Sections 4-6 assures party expectations regarding the
of Both Worlds, 19 Disp. Resol. Mag. 40, 40 (2013). confidentiality of mediation communications against disclosures
15. Questionnaires were sent to about 100 commercial arbitrators and in subsequent legal proceedings. However, it is also possible for
mediators in the country. Sixty-eight percent of those answering mediation communications to be disclosed outside of proceedings,
agreed that an arbitrator “may serve” as both mediator and for example to family members, friends, business associates and
arbitrator. “The percentage, noted Phillips, may have been the general public. Section 8 focuses on such disclosures.” (UMA,
even higher, because in retrospect, the question may have been Comment on Section 8). It would thus be more accurate to use
misleading—some who answered ‘should not serve’ likely the word “privilege” rather than “confidentiality” in the present
answered based on their own risk-benefit analysis, rather than article. However, I use the term “confidentiality” since this is the
based on the facts that persuade parties to want an opportunity to word systematically used in the doctrine.
have a conflict mediated and then, if necessary, arbitrated by the 34.(a) Except as otherwise provided in Section 6, a
same neutral.” (Gerald F. Phillips, Back to Med-Arb: Survey Indicates mediation communication is privileged as provided
Process Concerns Are Decreasing, 26 Alternatives to High Cost in subsection (b) and is not subject to discovery or
Litig. 73, 78 (2008)). admissible in evidence in a proceeding unless waived
16. “In order to reach a collective bargaining agreement, particularly or precluded as provided by Section 5.
in important industries in which striking is not a viable option for
(b) In a proceeding, the following privileges apply:
the public good” (Kristen M. Blankley, supra note 5, at 323-324).
(1) A mediation party may refuse to disclose, and may
For more details about the historical development of the med-arb
prevent any other person from disclosing, a mediation
process, see Barry C. Bartel, Med-Arb as a Distinct Method of Dispute
communication.
Resolution: History, Analysis, and Potential, 27 Willamette L. Rev.
(2) A mediator may refuse to disclose a mediation com-
661, 665 (1991).
munication, and may prevent any other person from
17. Brian A. Pappas, Med-Arb and the Legalization of Alternative Dispute disclosing a mediation communication of the mediator.
Resolution, 20 Harv. Negot. L. Rev. 157, 159 (2015).
(3) A nonparty participant may refuse to disclose, and
18. Id. at 159.
may prevent any other person from disclosing, a me-
19. Id. at 166-167. diation communication of the nonparty participant.
20. Patrick Van Leynseele, Med-Arb et tierce décision obligatoire: (c) Evidence or information that is otherwise admis-
les enjeux, les écueils, les solutions et les précautions à prendre, 1 sible or subject to discovery does not become inadmis-
Jurim Pratique, 104-105 (2014); Jacqueline M. Nolan-Haley, sible or protected from discovery solely by reason of its
Alternative Dispute Resolution in a Nutshell at 229-230 disclosure or use in a mediation (UMA, Section 4).
(West group, 2nd edition 2001). 35. “Proceeding means: (A) a judicial, administrative, arbitral, or other
21. Id. at 106. See also Brian A. Pappas, supra note 17, at 159 (the adjudicative process, including related pre-hearing and post-
“finality of arbitration is utilized as the stick to promote good behavior hearing motions, conferences, and discovery; or (B) a legislative
in mediation”); Jacqueline M. Nolan-Haley, supra note 20 hearing or similar process” (UMA, Section 2(7)).
at 229; Bette J. Roth, Med-arb, Arb-med, Binding Mediation, 36. “(a) A privilege under Section 4 may be waived in a record or
Mediator’s Proposal, and Other Hybrid Processes, 2 (American orally during a proceeding if it is expressly waived by all parties
Arbitration Association Advanced Mediator Training, November to the mediation and:
6, 2009, available online at http://www.rothadr.com/pages/ (1) in the case of the privilege of a mediator, it is expressly waived
publications/aaa%20medarb.pdf (later visited April 20, 2017). by the mediator; and
22. Allan Barsky, supra note 4, at 640. See also John T. Blankenship, (2) in the case of the privilege of a nonparty participant, it is
Developing your ADR attitude: Med-Arb, a template for adaptive expressly waived by the nonparty participant.” (UMA, Section 5).
ADR, 42 Tenn. B.J. 28 (2006). Some studies also demonstrate that 37. See Mass. Ann. Laws ch. 150, § 10A (1999).
parties were substantially more motivated to settle during the
mediation phase to avoid the loss of control that would come in 38. Abraham P. Ordover with G. Michael Flores and Andrea
the arbitration phase (Martin C. Weisman, Med-Arb: The Best of Doneff, Alternatives to Litigation: Mediation, Arbitration,
Both Worlds, 19 Disp. Resol. Mag. 40 (2013)). and the Art of Dispute Resolution at 54 (Notre Dame, Ind.:
NITA, 2nd ed. 1993).
23. For different tips about how to reduce the cost of a med-arb
process, see Kristen M. Blankley, supra note 5 at 326-327. 39. Id. at 54.
24. Thomas J. Brewer & Lawrence R. Mills, supra note 12 at 35. 40. American Commercial Association Commercial Arbitration
Rules and Mediation Procedures (Including Procedures for
25. Id. at 35. Large, Complex Commercial Disputes), Rules Amended and

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 75
 Effective October 1, 2013 Fee Schedule Amended and Effective 62. See for instance Township of Montclair v. Montclair PBA Local No.
July 1, 2016, R.19. Available online at https://www.adr.org/aaa/ 53, Superior Court of New Jersey—Appellate Division (May 22,
ShowPDF?doc=ADRSTG_004130 (last visited April 18, 2017). 2012), Case No. A-0657-1154, 2012 N.J. Super. Unpub. LEXIS 1122
(Sup. Ct. N.J. 2012) (unpublished opinion quoted by Christian P.
41. Martin C. Weisman, Med-Arb: The Best of Both Worlds, 19 Disp.
Alberti & David M. Bigge, Ascertaining the content of the applicable
Resol. Mag. 40, 40 (2013).
law and iura novit tribunus: approaches in commercial and investment
42. This solution is also the one proposed by PatrickVan Leynseele: arbitration, 70(2) Disp. Res. J. 1-20 (2015)).
“the mediator cannot incorporate in his/her final decision
elements that he or she is aware of thanks to the caucus if these 63. Ewing v. Act Catastrophe-Tex. L.C., 375 S.W.3d 545, 551-52 (Tex.
App. 2012); Univ. of Tex. Med. Sch. v. Than, 901 S.W.2d 926, 928
elements have not been debated before him during the arbitration
(Tex. 1995).
phase. He must, in some way, repress them (‘forget them’) so that
they do not influence his sentence either explicitly or implicitly” 64. This rule can also be explained by the necessary independence
(Patrick Van Leynseele, supra note 20 at 127) (free translation from and impartiality of the arbitrator (which is why even the contacts
French; emphasis added). between the arbitrator and one of the parties that took place prior
to the arbitrator’s appointment must be disclosed).
43. Andrew J. Wistrich, Chris Guthrie & Jeffrey J. Rachlinski, Can
Judges Ignore Inadmissible Information? The Difficulty of Deliberately 65. This might be the case in Europe for instance. According to
Disregarding, Cornell Law Faculty Publications, Paper 20, at 1330- the jurisprudence of the European Court of Human Rights, a
1331 (2005). Available online at http://scholarship.law.cornell. waiver “must be supported by minimum procedural guarantees
edu/lsrp_papers/20 (last visited April 12, 2017). commensurate to the importance of the rights waived” (Nordstrom-
Janzon and Nordstrom-Lehtinen v. Netherlands, Application No.
44. Id. at 1259.
28101/95, 22 November 1996). “Therefore, for a waiver to be
45. Id. valid, it must be clear and unambiguous, as well as express and
46. Brian A. Pappas, Med-Arb: the best of both worlds may be too good to informed, and must not run counter to an important public
be true: a response to Weisman, 19.3 Disp. Res. Mag. 42, 42 (2013). interest. This latter requirement suggests that not all rights can
be completely waived (e.g., such as the rule against partiality),
47. And in any case, before the beginning of the arbitration phase but this is a question on which there is no authority and which,
(for the same reasons why a judge or a “pure” arbitrator should ultimately, is not clear” (Julia Hörnle, Cross-border Internet
not start the proceedings knowing some information that a party Dispute Resolution at 107 (Cambridge University Press, 2009)).
would have communicated to her outside the presence of the
other parties). 66. See for instance Nolan v. Colorado Cent. Consol. Min. Co., 63 F.
930, 1894 U.S. App. LEXIS 2460 (8th Cir. Colo. 1894).
48. See for instance Patrick Van Leynseele, supra note 20 at 105.
However, several authors underline the dangers of caucusing (see 67. Kemal Sahin, Impartiality of the Judiciary, 1 Ankara bar rev. 17, 17
for instance Jacqueline M. Nolan-Haley, supra note 20 at 124- (2008). Also available online at http://www.ankarabarosu.org.tr/
126). siteler/AnkaraBarReview/tekmakale/2008-1/3.pdf (last visited
April 11, 2017) (emphasis added).
49. Patrick Van Leynseele, supra note 20 at 127-128.
68. See supra, p. 18.
50. We assume that the parties were well aware of the fact that
one same neutral could successively be the mediator and the 69. Bennett G. Picker, Mediation Practice Guide, A Handbook
arbitrator. In any case, the med-arbiter should ensure that the for Resolving Business Disputes at 38 (Bethesda, Md.: Pike &
parties have clearly understood that before starting the med-arb. Fischer, Inc., 1998).

51. Bowden v. Weickert, 2003-Ohio-3223, ¶ 36 (Ct. App.). 70. Id. at 39.

52. Id, at ¶ 35. 71. Id. at 38.

53. In re Cartwright, 104 S.W.3d 706, 714 (Tex. App. 2003). 72. Id. at 40.

54. Town of Clinton v. Geological Servs. Corp., 21 Mass. L. Rep. 609 73. Tibor Várady, John J. Barceló III, Stefan Kröll & Arthur T.
(2006), summarized by Kristen M. Blankley, supra note 5 at 353. von Mehren, supra note 61 at 383.
See also Twp. of Aberdeen v. Patrolmen’s Benev. Ass’n, Local 74. Brian A. Pappas, Med-Arb: the best of both worlds may be too good to be
163, 286 N.J. Super. 372, 669 A.2d 291 (Super. Ct. App. Div. 1996) true: a response to Weisman, 19.3 Disp. Res. Mag. 42, 42 (2013).
where the Superior Court of New Jersey held that mediation
75. Id. at 42.
communications cannot form the basis for an arbitration award.
In this case, though, the court did not answer the question as to 76. So in the two examples, the med-arbiter should choose, between
whether a waiver by the parties would make the use of mediation the options allowed by the parties, the one that is the closest to
communications by the med-arbiter in the arbitration phase valid. what the law dictates.
55. Kristen M. Blankley, supra note 5 at 322. 77. For instance, in a commercial dispute, parties could agree to ask
the arbitrator to decide their dispute by reference to commercial
56. And provided that this additional information is shared by all the
practices or customs (via “honorable engagement clause,” also
parties involved in the med-arb (see the following developments).
referred to as “equity clause”).
57. See supra pp. 15-18 and the sections B, C and D infra.
78. As underlined by Martin C. Weisman, “There are mediation and
58. See supra p. 17. arbitration protocols governing the ethical standards in each
59. John M. Kelly, Audi Alteram Partem; Note, Natural Law Forum. process, but none of the standards encompasses their combination”
Paper 84, 103 (1964). (Martin C. Weisman, Med-Arb: The Best of Both Worlds, 19 Disp.
Resol. Mag. 40 (2013)).
60. Matti S. Kurkela & Santtu Turunen, Due Process in
International Commercial Arbitration at 1-2 (Oxford Univ.
Press, 2nd ed. 2010) (emphasize added). Sarah Benzidi holds an LL.M. from Harvard Law
61. Tibor Várady, John J. Barceló III, Stefan Kröll & Arthur T. School. She is admitted to the Brussels Bar and is a
von Mehren, International Commercial Arbitration—A Seminar Assistant at the Free University of Brussels
Transnational Perspective at 649 (St. Paul, MN: West
Academic Publishing, 6th ed. 2015). (U.L.B.).

76 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
The Past, Present, and Future of the Doctrine of ‘Manifest
Disregard’
By Carl Mudd

I. Introduction II. What Is ‘Manifest Disregard of The Law’?

Since the Supreme Court’s decision in Hall Street As- Section 10 of the Federal Arbitration Act6 (FAA)
socs. L.L.C. v. Mattel, Inc.1 courts, commentators, and provides the statutory bases for vacating an arbitral
practitioners have questioned the continuing viability, award, including “where the award was procured by
and even the existence, of the doctrine of manifest ‘corruption,’ ‘fraud,’ or ‘undue means,’ and where the
disregard of the law (“manifest disregard,” “doctrine,” arbitrators were ‘guilty of misconduct,’ or ‘exceeded
or “standard”). Some argue that Hall Street effectively their powers.”‘7 In addition to the statutory grounds
abrogated manifest disregard.2 Others claim that the contained in FAA § 10, there are also various non-stat-
doctrine survived Hall Street as either a judicial gloss utory, judicially created, grounds for vacatur.8 Manifest
or a shorthand for the grounds enumerated in Section disregard of the law is generally understood to be one
10 of the Federal Arbitration Act.3 Still others, though of these judicially created grounds for vacating an
a minority, assert that Hall Street did not eliminate the award,9 though it “has not consistently or exclusively
traditional, pre-Hall Street understanding of manifest been viewed as a common-law expansion of the FAA”
disregard as a common-law, non-statutory, ground for (discussed in greater detail below).10 Although debate
vacating arbitral awards.4 In light of these differing and exists regarding the origins of the manifest disregard
diverging interpretations, it seems appropriate for the standard and its status as a common-law means for va-
United States Supreme Court to step in and resolve the cating an arbitral award, according to Stephen Huber,
controversy; however, the Court has yet to explicitly the standard approach to manifest disregard requires
hold what the correct interpretation is, though the “a showing that the arbitrator knowingly failed to
opportunity to do so has been presented.5 The lack of apply clearly applicable law.”11 An arbitrators mere ig-
direction regarding the viability of manifest disregard, norance of the law is not enough;12 rather, the moving
coupled with confusion surrounding the doctrine’s party must affirmatively show that the arbitrator, “[1]
“correct” interpretation and application (if still viable), knew about the existence of relevant law; [2] knew that
has caused many to question the fate of manifest disre- the law was controlling; and [3] intentionally refused
gard as a ground for vacating arbitral awards. to apply the law.”
This article examines this puzzling predicament,
and attempts to provide guidance regarding the future III. Origins and Development of ‘Manifest
of the manifest disregard standard. Part II briefly Disregard’
reviews the generally understood meaning of “mani- The exact origin of “manifest disregard of the law”
fest disregard of the law.” Part III investigates the is a topic of debate, with no clearly discernable answer.
origins and development of the doctrine by examining This section examines the origins and development
(a) the Supreme Court’s decision in Wilko v. Swan, (b) of the doctrine of manifest disregard, starting with
approaches to applying manifest disregard following the generally accepted view that the doctrine origi-
Wilko, and (c) the Court’s 2008 decision in Hall Street. nated from dicta in the United States Supreme Court’s
Part IV examines how the Second, Fourth, Fifth, Sixth, decision in Wilko v. Swan. After discussing Wilko, this
Eighth, Ninth, Tenth, and Eleventh Circuits have article examines various approaches to applying the
interpreted Hall Street, and how these interpretations doctrine of manifest disregard following Wilko (but
have influenced each circuit’s position regarding how before Hall Street). With these approaches in mind, this
the manifest disregard standard should be understood. article then discusses the Supreme Court’s decision in
Part V examines the future of manifest disregard, and Hall Street, and the implications that decision has had
takes the position that the doctrine remains viable, if on the continuing viability of the doctrine of manifest
not as common-law, as a judicial gloss/shorthand for disregard.
the grounds set forth in FAA § 10. Part VI suggests
that the most effective way to resolve the circuit split a. Wilko v. Swan: The Debate Begins
would be for the Supreme Court to issue an opinion The origin of the doctrine of manifest disregard
explicitly setting forth the “correct” interpretation and is a contested issue; however, most commentators
application of Hall Street and the doctrine of manifest agree that the manifest disregard standard originated
disregard. Part VII contains concluding remarks and from dicta in the United States Supreme Court’s 1953
recapitulates this article’s findings. decision in Wilko v. Swan,14 where the Court stated
that “the interpretation of the law by…arbitrators in

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 77
contrast to manifest disregard are not subject, in the b. Approaches to Applying the Doctrine of
federal courts, to judicial review for error in interpre- Manifest Disregard Following Wilko (but before
tation.”15 Although Wilko was subsequently overruled Hall Street)
on other grounds, this statement has been understood Following Wilko, various approaches to and appli-
to indicate, as Ashley Sundquist and Michael LeRoy cations of the doctrine of manifest disregard surfaced,
suggest, that manifest disregard of the law may be a “some very broad, some extremely narrow, but all
permissible ground for vacating an arbitral award, attempting to balance arbitration’s competing goals of
but an arbitrator mistaken interpretation of the law, efficiency and accuracy.”31 Thomas Burch, referencing
or a judge’s disagreement regarding how the law was Stephan Hayford,32 divides these varying applications
interpreted, does not provide “a justifiable reason for into three possible approaches: (1) the “futility ac-
vacature.”16 However, the extent of the Wilko Court’s knowledge”33 approach; (2) the “big error”34 approach;
discussion on the topic of manifest disregard is lim- and (3) “presumption-based”35 approach.36
ited; no attempt is made to elaborate on the meaning
of manifest disregard,17 making it difficult for courts The “futility-acknowledge” approach is the nar-
to determine the meaning of, and the amount of rowest approach and is “based on the level of difficulty
weight that should be afforded to, Wilko’s ambiguous involved in determining whether an arbitrator has
statement.18 consciously decided to ignore known, applicable law,
especially if the arbitrator did not issue a reasoned
Further complicating the issue is the fact that Wilko award.”37 Courts following this approach only apply
did not directly concern the scope of judicial review the doctrine of manifest disregard when “direct evi-
with regards to arbitral awards.19 Rather, the issue dence exists that the arbitrator consciously disregarded
confronted by the Court “was whether anti-fraud the law.”38 This approach can be seen in Advest, Inc. v.
claims brought under § 12(2) of the Securities Act of McCarthy. There, the First Circuit stated that, in order
1933 could be arbitrated, or whether public policy re- for an arbitration award to be vacated for manifest dis-
quired that such claims be litigated in state or federal regard of the law, “’there must be some showing in the
court.”20 The Court’s statement regarding “manifest record, other than the result obtained, that the arbitra-
disregard” was merely a byproduct of this analysis.21 tors knew the law and expressly disregarded it.”‘39 The
As Kenneth Davis notes, after addressing the main court went on to state that “disregard” in this context
issue, the Supreme Court “lapsed into muddled dicta, “implies that the arbitrators appreciated the existence
which has cast the issue of the scope of judicial review of a governing legal rule but [willfully] decided not to
of arbitration awards into uncertainty for over half apply it.”40 As the Advest court’s articulation implies,41
a century.”22 This uncertainty resulted in confusion this approach is severely limited. This is because a court
amongst courts, as acknowledged by the Fifth Circuit utilizing this approach most likely will not overturn an
in Citigroup Global Mkts. Inc. v. Bacon, where the court award absent a reasoned award,42 “or a transcript of
stated that it was unsurprising that “lower courts ini- the proceedings showing that the arbitrator explicitly
tially grappled with the uncertain implications” of the refused to follow the law....”43 This, Burch asserts, es-
Wilko Court’s ambiguous statement.23 sentially renders the doctrine a nullity.44 Nonetheless, it
Despite the confusion and lack of direction re- appears that “[m]ost courts that recognize manifest
garding the meaning and application of the manifest disregard as a ground for overturning awards...use this
disregard standard following the decision in Wilko, approach.”45
all circuit courts24 eventually adopted/recognized the The broadest approach, the “big error” approach,
doctrine (though some courts have since repudiated focuses on “whether the arbitrator made an egregious
their acceptance.)25, 26 This was partially due, at least mistake[,]”46 and unlike the “futility-acknowledge” ap-
for certain circuits, to the Supreme Court’s opinion in proach, does not require direct evidence indicating that
First Options of Chicago, Inc. v. Kaplan, where the Court the arbitrator consciously disregarded the law.47 Instead,
cited Wilko with approval and stated that a party can courts are allowed to “overturn an arbitration award
still “ask a court to review the arbitrator’s decision, by assuming that the arbitrator consciously disregarded
but the court will set that decision aside only in very known, applicable law based simply on the law’s clarity
unusual circumstances.”27 Other than First Options, how- and the arbitrator’s failure to apply it.”48 This approach is
ever, the Supreme Court seldom addressed the doctrine illustrated by the Second Circuit’s language in Willemijn
of manifest disregard,28 and as Thomas Burch references Houdstermaatschappij, BV v. Std. Microsystems Corp.49 There,
in relation to Hall Street, “only recently did the Court give the court agreed that manifest disregard of the law can
it any substantive analysis.”29 As a result, lower courts be found where an arbitrator ‘”understood and correctly
were left to apply the doctrine without clear direction or stated the law but proceeded to ignore it.”’50 However, the
constraint, resulting in differing articulation and applica- court determined that “a court may infer that [an arbitra-
tion of the standard.30 tor] manifestly disregarded the law if it finds that the error
made…is so obvious that it would be instantly perceived

78 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
by the average person qualified to serve as an arbitra- could validly agree to expand the grounds prescribed
tor.”51 As this statement indicates, a court applying this in § 10 and § 11 of the FAA for vacating or correcting an
approach may infer from the facts of the case that an arbi- arbitration award.”69 The Court answered this question
trator knew applicable law, and assume he/she ignored in the negative, holding that the grounds for vacating and
it based on the law’s clarity. This, Burch asserts, is in con- modifying an award under the FAA are exclusive.70
trast to the Wilko court’s statement “that awards should
not be reviewed for ‘error in interpretation,”’52 which may In arguing that the grounds set forth in FAA § 10 and
§ 11 were not exclusive (i.e., the parties had a right to
indicate why this approach is the one least employed.53
contractually expand the scope of review of an arbitration
The third approach, the “presumption-based” ap- award), Hall Street “pointed out that courts have been
proach, falls between the first two approaches, and can be permitted to expand review beyond section 10 and 11 of
understood as somewhat of a middle ground. Under this the FAA since Wilko created manifest disregard.”71 Hall
approach, courts review “the record of the arbitration pro- Street asserted that the Court’s statement in Wilko “meant
ceedings and will overturn the award if something in that that manifest disregard was a further ground for vaca-
record creates a presumption that the arbitrator ignored tur in addition to the grounds listed in section 10,” and
known, applicable law.”54 For example, in Montes v. Shear- therefore Supreme Court precedent “allowed for nonstat-
son Lehman Bros., Inc.,55 the Eleventh Circuit overturned an utory vacatur.”72 In response, the Court acknowledged
arbitral award on the ground that the arbitrator manifestly that a number of Circuit Courts had recognized manifest
disregarded the law.56 In making this determination, the disregard as an additional ground for vacating an award
court examined the arbitral award (there was no written beyond § 10 of the FAA,73 but the Court disagreed with
opinion), and noted that the panel was “flagrantly and bla- Hall Street’s argument, in part, because Wilko expressly
tantly urged” by the prevailing party to ignore known ap- rejected what Hall Street was asking for: “general review
plicable law.57 According to Hayford, during arbitration the for an arbitrator’s” legal errors.74 The Court, however, did
prevailing party asserted “that the controlling law was ‘not not stop there. Instead, the Court attempted to explain the
right,”’ and repeatedly exhorted “to the arbitration panel meaning of its earlier statement in Wilko, writing:
that they should do what was right, even if it produced an
Maybe the term ‘manifest disregard’ was
outcome inconsistent with the pertinent law.”58 The court
meant to name a new ground for review,
found that this, coupled with the fact that “nothing in the
but maybe it merely referred to the § 10
award or elsewhere in the record” suggested that the arbi-
grounds collectively, rather than add-
trator “did not heed” the prevailing party’s plea,59 indicated
ing to them.... Or, as some courts have
that the arbitrator knew the law but consciously ignored it.
thought, ‘manifest disregard’ may have
As the Eleventh Circuit’s decision illustrates, the “presump-
been shorthand for § 10(a)(3) or
tion-based” approach does require a degree of proof that
§ 10(a)(4), the paragraphs authorizing
the arbitrator knew the law and ignored it, but “direct proof
vacatur when the arbitrators were ‘guilty
that the arbitrator made a conscious decision to ignore the
of misconduct’ or ‘exceeded their pow-
law” is not a necessary prerequisite for vacatur.60
ers.’ We, when speaking as a Court, have
As the above illustrates, the precise standard utilized merely taken the Wilko language as we
by Circuit Courts following Wilko varied from circuit found it, without embellishment, see First
to circuit.61 According to Weathers Bolt, however, most Options of Chicago, Inc. v. Kaplan, 514 U.S.
circuits generally agreed (with the exception of the Sev- 938,942,115 S. Ct. 1920, 131 L. Ed. 2d 985
enth Circuit62) that successful use of manifest disregard (1995), and now that its meaning is im-
as a ground for judicial review and vacatur after Wilko plicated, we see no reason to accord it the
(but before Hall Street) required that63 “[l] the arbitrator significance that Hall Street urges.75
or arbitrators knew the law and [2] deliberately failed to
This statement has caused many courts and scholars
apply the applicable law.”64 Bolt also notes, and Jill Gross
to question the viability, and possibly the existence, of the
confirms,65 that many circuits “also required that the law
doctrine of manifest disregard (at least in federal courts).76
be clearly applicable to the situation at bar.”66
Although the Court “did not expressly reject ‘manifest
c. Hall Street disregard’ as a valid ground for review,” according to Jill
Gross, “it did not embrace it either.”77 This uncertainty
More than 50 years after the Court’s decision in Wilko,
has lead a number of Circuit Courts to construct differ-
the Supreme Court decided the case of Hall Street Assocs.
ing interpretations of the Court’s decision in Hall Street,
L.L.C. v. Mattel, Inc.,67 which has raised many questions
prompting divergence among courts and disagreement
and concerns regarding the continuing viability of the
regarding the future of the doctrine.
doctrine of manifest disregard.68 In Hall Street, the Su-
preme Court addressed (in dicta) the ambiguities associ- IV. Manifest Disregard After Hall Street
ated with Wilko ‘s comments regarding the scope of judi-
cial review of arbitral awards. The issue before the Court Since the Supreme Court’s decision in Hall Street,
was “whether the parties to an arbitration agreement Federal Circuit Courts have grappled with the issue of

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 79
whether manifest disregard remains a valid ground the court further confirmed “its understanding that Hall
for vacating arbitral awards. This has resulted in vary- Street’s practical effect was to establish the grounds spe-
ing views and responses regarding the current viability cifically enumerated in the FAA as the exclusive grounds
and application of the doctrine of manifest disregard. for vacatur.”88 Accordingly, the court concluded that ap-
Each Circuit’s view, Jonas Cullemark suggests, relates to pellant’s claim that the arbitrator manifestly disregarded
the meaning attributed to the word “exclusive” in Hall the law was “not cognizable” since such ground was “not
Street,78 and each Circuit’s response tends to depend, included among those specifically enumerated in §10....”89
according to Davis, “on whether the circuit viewed The court reaffirmed its position in Air Line Pilots v. Trans
the manifest disregard standard as statutory or non- State, where the court described manifest disregard as a
statutory.”79 As discussed below, the Circuits that have “defunct vacatur standard.”90 The court’s reasoning, John
definitively addressed the issue have taken three posi- and Ari Diaconis suggest, was “that manifest disregard is
tions regarding the doctrine of manifest disregard.80 The a non-statutory ground for vacatur and thus impermis-
first position, which I have labeled the abandonment sible under Hall Street’s pronouncement that FAA Section
group, holds that manifest disregard is no longer a vi- 10 is to be read exclusively.”91
able basis for vacatur. The second position, the “non-
statutory” group, believes that manifest disregard as a iii. Eleventh Circuit
non-statutory basis for vacatur survived Hall Street. The In Frazier v. CitiFinancial Corp., the Eleventh Circuit
third position, labeled the “shorthand or judicial gloss” adopted the Fifth Circuit’s position regarding the viabil-
group, holds that manifest disregard remains viable as a ity of manifest disregard.92 The court held that manifest
judicial gloss on the grounds listed in FAA § 10, or as a disregard, as a “judicially created” basis for vacatur, was
shorthand for FAA §§ 10(a)(3) and 10(a)(4). In addition “no longer valid in light of” the Supreme Court’s deci-
to these three positions, some courts have acknowledged sion in Hall Street.93 In so holding, the court agreed with
the continuing viability of manifest disregard, but have the Fifth Circuit “that the categorical language of [Hall
not definitively set forth whether the doctrine remains Street] compels such a conclusion.”94 The Eleventh Circuit
valid as a non-statutory, common-law ground or as a reconfirmed this position in Campbell’s Foliage, Inc. v.
judicial gloss/shorthand for the grounds enumerated in Federal Corp Insurance Corp., where that court determined
FAA § 10. that “the only viable ground for vacatur in [the Eleventh
Circuit] were those enumerated in the FAA.”95
a. Abandonment
The Fifth, Eighth, and Eleventh Circuits have inter- b. Non-Statutory
preted Hall Street as effectively eradicating the doctrine of The Sixth Circuit is the only circuit to maintain its pre-
manifest disregard—i.e., the doctrine no longer remains Hall Street position that the doctrine of manifest disregard
a viable basis for vacating arbitral awards post-Hall exists as a non-statutory, common-law, ground for vacat-
Street.81 This section briefly examines decisions in each ing arbitral awards. This section examines Sixth Circuit
circuit denying the continuing validity of the doctrine of decisions illustrating the Circuit’s view that manifest dis-
manifest disregard. regard remains a viable non-statutory means for vacatur.

i. Fifth Circuit i. Sixth Circuit

The Fifth Circuit, in Citigroup Global Markets, Inc. v. In Grain v. Trinity Health, the Sixth Circuit determined
Bacon, addressed the issue of “whether manifest disre- “that manifest disregard of the law is no longer a ground
gard of the law remains a valid ground for vacatur of an for modifying an award”;96 however, the court did not
arbitration award in light of the Supreme Court’s recent determine whether the doctrine remains a viable means
decision in Hall Street….”82 Relying on the history of the for vacatur. According to John and Ari Diaconis, “[d]istrict
law of vacatur and the development of FAA,83 the court courts within the Sixth Circuit seem to agree that mani-
rejected manifest disregard as an independent, non-statu- fest disregard has survived Hall Street.”97 In support of
tory ground for vacating arbitral awards.84 In so holding, this conclusion, the district courts cite the Sixth Circuit’s
the court determined that the Supreme Court’s language unpublished opinion in Coffee Beanery v. WW.98 There,
in Hall Street made clear that the grounds for vacatur set the court held that application of Hall Street is limited
forth in Section 10 of the FAA were exclusive.85 As a re- to circumstances involving contractual expansion of the
sult, the court concluded that “manifest disregard of the grounds for review.99 In so holding, the court acknowl-
law as an independent, nonstatutory ground for setting edged that Hall Street “significantly reduced the ability
aside an award must be abandoned and rejected.”86 of federal courts to vacate arbitration awards for reasons
other than those specified in 9 U.S.C. § 10”; however, the
ii. Eighth Circuit court found that “it did not foreclose federal courts’ re-
In Med. Shoppe Int’l, Inc. v. Turner Invs., Inc., the view for an arbitrator’s manifest disregard of the law.”100
Eighth Circuit confirmed its view that the bases for vacat- Consistent with this statement, the court found that, al-
ing an arbitral award are limited to the express grounds though its “ability to vacate an arbitration award is almost
set forth in the FAA.87 According to Stanley Leasure, exclusively limited to these grounds...it may also vacate

80 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
an award found to be in manifest disregard of the law.”101 gard of law ground for vacatur, as understood in the
The court then endorsed the pre-Hall Street view that the [Ninth Circuit]....”115 The Ninth Circuits reaffirmed its
doctrine of manifest disregard applies if ”(1) the appli- position in Wetzel’s Pretzels, LLC v. Johnson, where the
cable legal principle is clearly defined and not subject court stated that “[i]n order for us to vacate the award on
to reasonable debate; and (2) the arbitrators refused to the ground that the arbitrator exceeded his powers under
heed that legal principle.”102 This indicates, as John and § 10(a)(4),” the moving party must “show that the award
Ari Diaconis suggest, that the Sixth Circuit “recognizes was ‘completely irrational, or exhibit[ed] a manifest
manifest disregard as an independent ground for vacatur, disregard of law....”’116 In order to vacate an arbitration
separate and apart from FAA Section 10.”103 award for manifest disregard of the law, the court noted,
“’it must be clear from the record that the arbitrators
c. Statutory: Judicial Gloss/Shorthand recognized the applicable law and then ignored it.”’117
Though many circuits no longer advocate for the Thus, it is clear that that the Ninth Circuit has adopted
non-statutory, common-law, understanding of manifest the view that manifest disregard remains a viable means
disregard, a number of Circuit Courts still believe the for vacatur as a shorthand for the statutory grounds set
doctrine survived Hall Street as a shorthand for, or a ju- forth in FAA § 10.
dicial gloss on, the grounds enumerated in FAA § 10. As
Jack Rephan notes, “[a] number of Federal Circuits...have d. Surviving but Unsure
interpreted [Hall Street] as not rejecting, in toto, manifest The doctrine of manifest disregard has survived in
disregard as basis for seeking to vacate an award, but that both the Fourth and Tenth Circuits. However, neither
it has survived as being merely shorthand for the statuto- circuit has taken a definitive position on whether the
ry grounds under § 10(a)(3) and § 10(a)(4) or as a judicial doctrine survives as a judicial gloss/shorthand or an
gloss on the statutory grounds.”104 The courts that have independent, non-statutory, ground for vacatur.
definitively maintained this position following Hall Street
include the Second Circuit and the Ninth Circuit.105 i. Fourth and Tenth Circuits
In Wachovia Securities v. Brand, the Fourth Circuit
i. Second Circuit determined that its pre-Hall Street understanding of
In Stolt-Nielsen SA v. AnimalFeeds International Corp. manifest disregard118 remained controlling.119 However,
(overruled on other grounds), the Second Circuit con- the court did not affirmatively determine the status of the
firmed its view that Hall Street did not “abrogate the doctrine; rather, the court found that “manifest disregard
‘manifest disregard’ doctrine.”106 The court conceded, continues to exist as either an independent ground for
Jack Jarrret notes, that the Second Circuit “had previously review or as a judicial gloss, we need not decide which of
indicated that the judicially named grounds were differ- the two....”120 This position was confirmed in a footnote in
ent from the grounds specified in the FAA.”107 However, Dewan v. Walia, where the court noted that the Fourth Cir-
in Stolt-Nielsen the court stated that it “reconceptualized” cuit has “recognized that ‘manifest disregard continues to
their understanding of the doctrine of manifest disregard exist’ as a basis for vacating an arbitration award, either
“as a judicial gloss on the specific grounds for vacatur as ‘an independent ground for review or as a judicial
enumerated in section 10 of the FAA....”108 The Second gloss’ on the enumerated grounds for vacatur set forth in
Circuit recently reconfirmed this position in Sutherland the FAA.”121
Global Services v. Adam Technologies. There, the court first
noted that “the specific grounds for vacatur provided in In Adviser Dealer Servs. v. Icon Advisers, Inc., the Tenth
the FAA are generally exclusive,”109 but then stated that Circuit acknowledged that manifest disregard remains a
viable means for vacating an arbitral award:
manifest disregard “’remains a valid ground for vacat-
ing arbitration awards”’ as “’judicial gloss on the specific A district court may vacate an arbitration
grounds for vacatur...“’ set forth in FAA § 10.110 Thus, it award only “for the reasons enumerated
appears that the Second Circuit has adopted the view that in the Federal Arbitration Act, 9 U.S.C. §
manifest disregard remains viable as a judicial gloss. 10, or for ‘a handful of judicially created
reasons.”’ These judicially created rea-
ii. Ninth Circuit sons ‘include violations of public policy,
In Comedy Club, Inc. v. Improv W. Assocs., the Ninth manifest disregard of the law, and denial
Circuit read the Supreme Court’s decision in Hall Street of a fundamentally fair hearing.122
as merely identifying several possible interpretations
of the doctrine of manifest disregard.111 These “possible However, the court does not elaborate on whether the
readings of the doctrine”112 included the understanding doctrine is seen as a judicial gloss or an independent
that manifest disregard was a shorthand for the statu- ground for vacatur. Guidance as to the Tenth Circuit’s
ary grounds enumerated under Section 10 of the FAA,113 position in this regard may be found in the unpublished
which the court acknowledged was the accepted view opinion Abbott v. Law Office of Patrick K. Milligan.123 There,
in the Ninth Circuit.114 Thus, the court concluded “Hall the court “expressed the opinion that a willful decision
Street Associates did not undermine the manifest disre- of an arbitrator not to apply controlling law might fall

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 81
within § 10 even though the claimed ground for vacatur to expressly articulate (in some circuits, but not all) their
is expressed in terms of manifest disregard of the law.”124 manifest disregard claim in a manner so as to incorporate
Thus, it appears that the Tenth Circuit may be leaning the language and/or grounds set forth in FAA § 10. Gross
towards the view that manifest disregard remains viable agrees with this position and asserts that “parties can con-
as a shorthand for FAA § 10. tinue to challenge arbitration awards on the FAA ground
that arbitrator committed misconduct under [FAA § 10(a)
(3)] by manifestly disregarding the law or exceeded the
V. Future of Manifest Disregard
scope of its power under [FAA§ 10(a)(4)] by manifestly
The future of manifest disregard is far from certain. disregarding the law.”131
Some speculate that the Supreme Court’s decision in
Hall Street effectively abrogated the doctrine (at least Furthermore, as the preceding section indicates,
as a common-law ground for vacatur), while others manifest disregard has survived post-Hall Street in many
maintain that the doctrine has survived post-Hall Street circuits. However, the doctrine no longer maintains the
as common law or as a judicial gloss/shorthand for the status, or original understandings, set forth by the Circuit
grounds listed in FAA § 10. In this author’s opinion, the Courts following Wilko. That is, most circuits that rec-
doctrine survived Hall Street and remains a viable and ognize the doctrine despite the Court’s language in Hall
valid means for vacating arbitral awards, possibly as Street no longer see it as a common-law, non-statutory
independent common law, but more likely as a judicial ground for vacatur (though some circuits have not affir-
gloss/shorthand for FAA § 10. Below this section takes matively decided this).132 This indicates that the doctrine’s
the position that the doctrine remains viable for two foundation has been weakened following Hall Street.133
primary reasons: (1) the Supreme Court’s decision in Hall However, it is this author’s contention that the doctrine is
Street did not abandon the doctrine; rather, the Court’s not dead. On the contrary, the doctrine remains a viable
opinion indicates that manifest disregard remains valid, means for vacating arbitral awards, as evidence by the
possibly as common law, but most likely as a judicial various circuits recognizing its continuing viability and
gloss or shorthand for the grounds enumerated in FAA applicability.134 This is not to say that practitioners at-
§ 10, and (2) the majority of Circuit Courts continue to tempting to use the doctrine, even in the circuits that rec-
recognize the viability of manifest disregard, in one form ognize it, will be successful. Establishing the elements of
or another, despite Hall Street. manifest disregard remains a difficult task, regardless of
whether the doctrine is seen as non-statutory or a judicial
First of all, it must be noted that the language in Hall gloss/shorthand. Still, the Circuit Courts’ retention and
Street used to support the position that the doctrine of acceptance of the doctrine, though modified, signals that
manifest disregard is dead post-Hall Street (at least as a most circuits view manifest disregard as a valid and vi-
non-statutory ground for vacatur) is conclusory dicta125 able means for challenging an arbitral award, and should
with only persuasive value (though some argue that dic- the “right” case present itself, these Circuits will vacate
tum can become binding126).127 In addition, the language the award.
in Hall Street used to support this position states that it is
possible that the Court’s reference to manifest disregard As the preceding illustrates, the doctrine of mani-
in Wilko indicated that “the term... was meant to name fest disregard is not dead. Hall Street may have caused
a new ground for review....”128 This suggests that it is a reformulation regarding the authority from which the
possible, though unlikely, that the doctrine can survive doctrine derives support, i.e., whether the doctrine should
Hall Street as a common-law, non-statutory, ground for be conceptualized as a separate non-statutory ground for
vacatur. vacatur, or as a judicial gloss/shorthand for FAA § 10;
however, Hall Street did not completely abrogate the doc-
Even if the language in Hall Street effectively eradi- trine, for the reasons discussed above. Therefore, it is this
cated manifest disregard as a common law means for author’s contention that the doctrine survived Hall Street,
vacatur, it did not preclude or abandon its use in entirety. and remains a viable means for vacating arbitral awards
As Gross asserts, “the strict constructionist majority in many circuits.
[in Hall Street] merely interpreted the FAA to preclude
parties seeking vacatur from asserting grounds other
than those identified in FAA section 10, and suggested VI. Suggestion: Supreme Court Review
that lower courts could construe the bases provided In order to set forth and/or clarify the “correct”
by section 10 as including ‘manifest disregard.”’129 As interpretation of Hall Street and resolve the split among
Gross’ statement suggests, the Court did not abandon the Circuit Courts, the Supreme Court ought to lay down
the doctrine; rather, the Court delegated to the courts the an explicit holding accepting or rejecting the doctrine
task of determining how “manifest disregard” fits into and the prevailing Circuit Court interpretations. Absent
one of the four categories set forth in FAA § 10.130 In ac- such an explicit ruling, lower courts are left to divine their
cordance with this understanding, parties are not prohib- own meanings. The likelihood this will occur, however,
ited from asserting manifest disregard; however, in order is debatable. This is because the Supreme Court has been
to successfully challenge an award, the parties will have provided multiple opportunities to decide how “manifest

82 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
disregard” ought to be interpreted and applied, but has 7. Hall St. Assocs., L.L.C. v Mattel, Inc., 552 U.S. 576,578 (2008);
FAA § 10.
declined to specifically address the issue.135 Thus, the
possibility that the Court will lay down an explicit hold- 8. Annie Chen, The Doctrine of Manifest Disregard of the Law
After Hall Street: Implications for Judicial Review of International
ing that resolves the split among Circuit Courts is uncer- Arbitrations in U.S. Courts, 32 Fordham Int’l L.J. 1872, 1879
tain, and probably unlikely given the Court’s inclination (2008-2009); Hiro N. Aragaki, The Mess of Manifest Disregard,
to avoid the issue. Nevertheless, it does appear that the The Yale Law Journal, at 1 (Sep. 29, 2009), available at: http://
www.yalelawjournal.org/pdf/8l 7_hert8o16.pdf (“Manifest
doctrine of manifest disregard did survive Hall Street, disregard is a common-law exception to the limited grounds
though modified, and it is this author’s contention that for vacatur of arbitral award enumerated in the Federal
the doctrine will remain viable in the circuits that have Arbitration Act (FAA).”); see Carbonneau, infra note 9; Huber,
infra note 11.
accepted it, unless and until the Supreme Court rules
9. Thomas E. Carbonneau, The Rise in Judicial Hostility to Arbitration:
otherwise. Revisiting Hall Street Associates, 14 Cardozo Conflict Resol. 593, 604-
606 (2013); Richard C. Reuben, Personal Autonomy and Vacatur After
Hall Street, 113 Penn St. L. Rev. 1103, 1110 (2008-2009); Lisa J. Banks
VII. Conclusion & Matthew S. Stiff, The Federal Arbitration Act, ALI-CLE: Advanced
Employment Law and Litigations 2013, Katz, Marshall & Banks,
This article has examined the origin of the doctrine LLP, at 15 (last visited May 6, 2017), http://www.kmblegal.com/
of manifest disregard, the standard’s development fol- wp-content/uploads/ALI-CLE-Arbitration-Feb-2013.pdf; Chen,
lowing the Supreme Court’s decisions in Wilko and Hall supra note 8, at 1879.
Street, and its future viability as a means for vacating 10. Jill I. Gross, Hall Street Blues: The Uncertain Future of Manifest
Disregard, 37 Sec. Reg. L.J. 232,270 (2009).
arbitration awards. It was found that most, if not all Cir-
cuits Courts, following Wilko, accepted manifest disre- 11. Stephen K. Huber, State Regulation of Arbitration Proceedings:
Judicial Review of Arbitration Awards by State Courts, 10 Cardozo J.
gard as a common-law, non-statutory, means for vacating Conflict Resol. 509, 557 (2008-2009).
arbitral awards, though some circuits maintained differ- 12. Huber, supra note 11, at 557.
ing positions regarding the correct articulation and ap- 13. Id.
plication of the doctrine. After the Court’s decision in Hall
14. Reuben, supra note 9, at 1110 (“The manifest disregard standard
Street, almost all of the Circuit Courts altered their under- is a non-statutory ground that emanates from dicta in the Wilko
standing of manifest disregard. However, only three cir- v. Swan case....); Chen, supra note 8, at 1879 (“The doctrine of
cuits (of the eight surveyed) have taken the position that manifest disregard of law traces its origins to 1953…Wilko v.
Swan.... The entire doctrine of manifest disregard of the law has
Hall Street completely abrogated the doctrine of manifest developed out of... dictum from Wilko, a case that has been since
disregard. Therefore, the doctrine is not dead, but rather overruled on its principle ruling.”); Matthew Wolper, “Manifest
still exists, possibly as common law, but most likely as a Disregard” Not Yet Entirely Disregarded, 86 Fla. B.J. 27, 37 (2012)
(“The origin of manifest disregard of the law is found in the
judicial gloss/shorthand for the grounds enumerated in Supreme Court’s opinion in Wilko v. Swan....); Banks & Stiff, supra
FAA § 10. Although the most efficient means for resolving note 9, at 15 (Manifest disregard for the law “originated in the
the circuit split would be for the Supreme Court to issue dictum of [Wilko v. Swan] ....”); Michael A. Scodro, Deterrence and
Implied Limits on Arbitral Power, 55 Duck L.J. 547, 566-67 (2005)
an explicit holding that would guide lower courts regard- (“The ‘manifest disregard’ locution originated in the Supreme
ing the correct interpretation and application of manifest Court’s decision in Wilko.. ..”). Gross, supra note 10, at 236 (“The
disregard, the Court is unlikely to take up this issue. As ‘manifest disregard’ standard originated from a statement by the
Supreme Court in Wllko v. Swan...”); Stephan J. Ware & Marisa
a result, the fate of the doctrine of manifest disregard V. Maleck, Authorities Split After the Supreme Court’s Hall Street
remains uncertain, and will remain uncertain. Decision: What Is Left of the Manifest Disregard Doctrine?, The
Federalist Society, at 119 (Mar. 31, 2010), available at: http://
Endnotes www.fed-soc.org/publications/detail/authorities-split-after-the
supreme-courts-hall-street-decision-what-is-left-of-the-manifest-
1. Hall St. Assocs., L.L.C. v Mattel, Inc., 552 U.S. 576 (2008). disregard-doctrine (“The manifest disregard doctrine is traced to
the Supreme Court’s decision in Wilko v. Swan...”). See also Adam
2. Carolina Rizzo, Why ‘Manifest Disregard’ Survives as an Independent
Miliam, A House Built on Sand: Vacating Arbitration Awards for
Standard for Vacatur of Arbitral Awards Even After Hall Street, 3 Arb.
Manifest Disregard of the Law, 29 Cumb. L. Rev. 705, 708 (1998-
Brief 1, 12-13 (2013). See infra Part IV(a)(i)-(iii).
1999) (“circuits derive the manifest disregard of the law standard
3. Carolina Rizzo, Why ‘Manifest Disregard’ Survives as an either from the dicta in [Wilko v. Swan] or as an implied defense
Independent Standard for Vacatur of Arbitral Awards Even After arising under section 10(a)(4) of the FAA ... “). But see, Michael H.
Hall Street, 3 Arb. Brief 1, 12-13 (2013). See infra Part IV(c)(i)-(ii). LeRoy, Are Arbitrators Above the Law? The “Manifest Disregard of the
See also, infra Part IV(d). Law” Standard, 52 B.C. L. Rev. 137, 157 (2011) (“Dictum in Wilko is
4. See infra Part IV(b). See also, infra Part IV(d). mistakenly cited as a source of the manifest disregard standard.
The Court in Wilko did not adopt this standard but simply
5. See e.g., Stolt-Nielsen S. A. v AnimalFeeds Int’l Corp., 559 U.S. discussed it as a hypothetical.”).
662, 672, n.3 (2010) (“We do not decide whether ‘manifest
disregard’ survives our decision in Hall Street Associates, 15. Wilko v. Swan, 346 U.S. 427, 436-37 (1953) (overruled on other grounds
L.l.C. v. Mattel, Inc., 552 U.S. 576,585, 128 S. Ct. 1396, 170 L. in Rodriguez de Quijas v. Shearson/American Express, 490 U.S. 477
Ed. 2d 254 (2008), as an independent ground for review (1989)).
or as a judicial gloss on the enumerated grounds for 16. Ashley K. Sundquist, Do Judicially Created Grounds for Vacating
vacatur set forth at 9 U.S.C. § 10.”); Campbell’s Foliage, Inc. v. Arbitral Awards Still Exist? Why Manifest Disregard of the Law and
Fed. Crop Ins. Corp., 562 F. App’x 828 (11th Cir. 2014), cert. Public Policy Exceptions Should Be Considered under Vacatur, 2015 J.
denied,_ U.S._, 135 S. Ct. 145 (2014); Coffee Beanery, Ltd. v. Disp. Resol. 407, 411 (2015); LeRoy, supra note 14, at 158 (“In this
WW, L.L.C., 300 F. App’x 415 (6th Cir. 2008), cert. denied, 558 advisory statement” the Court “said that a judge may review [an
U.S. 819 (2009). arbitral award] if it manifestly disregards the law, but not if the
6. Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. (1925) [hereinafter judge disagrees with its legal interpretation.”).
“FAA”].

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 83
17. Thomas V. Burch, Manifest Disregard and the Imperfect Procedural 26. Davis, supra note 19, at 94 (“Despite the vagueness of the Wilko
Justice of Arbitration, 59 U. Kan. L. Rev. 47, 61 (2010-2011). See dicta, the circuit courts, one by one, recognized the manifest
LeRoy, supra note 14, at 158 (the Court did not give any “further disregard standard.”); Chen, supra note 8, at 1879 (“Prior to Hall
details on what manifest disregard of the law meant, and it Street, manifest disregard as an independent ground for vacatur
gave no indication that it ever intended manifest disregard to was well accepted by all circuit courts except for the Seventh
constitute a new ground for vacating arbitration awards under Circuit.”); Burch supra note 17, at 61 (“every federal circuit court of
the FAA.”). appeals has adopted [the doctrine of manifest disregard] (although
the Fifth and Eleventh Circuit have since renounced it), many state
18. See Milam, supra note 14, at 708 (“[N]o secure basis exist upon
courts have adopted it...”); Scodro, supra note 14, at 567 (“Despite
which courts can apply the standard, thus leading to arbitrary
its humble origins and lack of explication from the Supreme Court,
and inconsistent interpretations and application among the
the ‘manifest disregard’ doctrine has taken hold in every federal
circuits.”). See also Scodro, supra note 14, at 569 (“Without
circuit and in many state courts.”); LeRoy, supra note 14, at 158-59.
statutory or other grounding aside from conclusionary dicta in
Wilko, however, defining ‘manifest disregard’ has been a slippery 27. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938,942 (1995)
task.”). (citing 9 U.S.C. § 10 (award procured by corruption, fraud, or
undue means; arbitrator exceeded his powers); Wilko v. Swan,
19. Kenneth R. Davis, The End of an Error: Replacing “Manifest
346 U.S. 427, 436-437, 98 L. Ed. 168, 74 S. Ct. 182 (1953) (parties
Disregard” with a New Framework for Reviewing Arbitration Awards,
bound by arbitrator’s decision not in “manifest disregard” of the
60 Clev. St. L. Rev. 87, 92 (2012-2013).
law), overruled on other grounds, Rodriguez de Quijas v. Shearson/
20. Davis, supra note 19, at 92. American Express, Inc., 490 U.S. 477, 104 L. Ed. 2d 526, 109 S. Ct.
21. See Carbonneau, supra note 9, at 604 (“The [Wilko] opinion make 1917 (1989)).
only an incidental reference to [manifest disregard], possible by 28. Burch, supra note 17, at 62 (citing First Options of Chicago, Inc.
pure happenstance.”) v Kaplan, 514 U.S. 938, 942 (1995) (citing Wilko and mentioning
22. Davis, supra note 19, at 94. See Carbonneau, supra note 9, at 604 manifest disregard in a parenthetical following the cite); Shearson/
(Manifest disregard ... actually has little to do with Wilko.”). Am. Express, Inc. v. McMahon, 482 U.S. 220, 231 (1987) (citing Wilko
and quoting its sentence on manifest disregard); McMahon, 482
23. Citigroup Global Mkts. Inc. v. Bacon, 562 F.3d 349, 354 (5th Cir. U.S. at 258- 59, 268 (Blackmun, J., concurring in part and dissenting
2009). See San Marine Compania De Navegacion v. Saguenay in part) (acknowledging manifest disregard and citing Wilko);
Terminals Ltd., 293 F.2d 796 (9th Cir. 1961) (“Frankly, the Supreme Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S.
Court’s use of the words ‘manifest disregard’ has caused us 614,656 (1985) (Stevens, J., dissenting) (stating that arbitration
trouble here. Conceivably the words may have been used to awards may be overturned if they are in manifest disregard of
indicate that whether an award may be set aside for errors of the law)); Stolt-Nielsen S. A. v. AnimalFeeds Int’ Corp., 559 U.S.
law would be a question of degree. Thus, if the award was based 662(2010). See also, Scodro, supra note 14, at 567 (“A majority of the
upon a mistaken view of the law, but in their assumption of what Supreme Court has only even hinted approval of the doctrine on
the law was, the arbitrators had not gone too far afield, then the one occasion since Wilko was decided in 1953.”).
award would stand; but if the error is an egregious one, such as
no sensible layman would be guilty of, then the award could be 29. Burch, supra note 17, at 62.
set aside. Such a ‘degree of error’ test would, we think, be most 30. For more information regarding the various circuits’
difficult to apply. Results would likely vary from judge to judge. recognition, interpretation, and application of manifest
We believe this is not what the court had in mind when it spoke of disregard following the Court’s statement in Wilko, see LeRoy, supra
‘manifest disregard.”’). See also, Davis, supra note 19, at 94. note 14, at 160-69; Davis, supra note 19, at 94-96; Burch, supra note
24. See, e.g., Advest, Inc. v. McCarthy, 914 F.2d 6 (1st Cir. 1990); Trafalgar 17, at 62-65; Chen, supra note 8, at 1881-1883; Huber, supra note 11,
Shipping Co. v. Intl. Milling Co., 401 F.2d 568 (2d Cir. 1968); Merrill at 560-63.
Lynch, Pierce, Fenner & Smith, Inc. v. Bobker, 808 F.2d 930 (2d Cir. 31. Burch, supra note 17, at 62.
1986); Ludwig Honold Mfg. Co. v. Fletcher, 405 F.2d 1123 (3d Cir.
1969); Upshur Coals Corp. v. United Mine Workers, Dist. 31, 933 F.2d 32. Stephan Hayford, Reining in the “Manifest Disregard” of the Law
225 (4th Cir. 1991); Williams v. Cigna Fin. Advisors, 197 F.3d 752 Standard: The Key to Restoring Order to the Law of Vacatur, 1998 J.
(5th Cir. 1999); Anaconda Co. v. Intl. Assa. of Machinists & Aerospace Disp. Resol. 117.
Workers, 693 F.2d 35 (6th Cir. 1982); Health Servs. Management 33. Id. at 125-24 (citing Prudential-Bache Secs., Inc., v. Tanner, 72 F.3d
Corp. v. Hughes, 975 F.2d 1253 (7th Cir. 1992); Stroh Container Co. 234,240 (1st Cir. 1995); Merrill Lynch, Pierce, Fenner & Smith, Inc.
v. Delphi Indus., Inc., 783 F.2d 743 (8th Cir. 1986); French v. Merrill v. Jaros, 70 F.3d 418,421 (6th Cir. 1995); Advest, Inc. v. McCarthy,
Lynch, Pierce, Fenner & Smith, Inc., 784 F.2d 902 (9th Cir. 1986); 914 F.2d 6, 10 (1st Cir. 1990)); Burch, supra note 17, at 62 (citation
Jenkins v. Prudential-Bache Sec., Inc., 847 F.2d 631 (10th Cir. 1988); omitted).
Montes v. Shearson Lehman Bros., 128 F.3d 1456 (11th Cir. 1997);
34. Burch, supra note 17, at 63.
Kanuth v. Prescott, 292 U.S.AppD.C. 319, 942 F.2d 1175 (1991); John
Diaconis & Ari Diaconis, Six Years After Hall Street: The Continued 35. Id. at 64 (citing Hayford, supra note 32, at 128-32 (internal citation
Viability of Manifest Disregard, Jurisdiction by Jurisdiction, Bleakley omitted)).
Platt, at 10 (last visited May 6, 2017), http://www. bpslaw. 36. Id. at 62-64. See also, Hayford, supra note 32, at 125-132.
com/files/20 I 50729043546-ARIAS%20Quarterly%2020I 5%20
First%20Quarter%20-%20Six%20Y ears%20After%20Hall%20St. 37. Burch, supra note 17, at 62 (citation omitted).
pdf (citing McCarthy v. Citigroup Global Mkts., Inc., 463 F.3d 87, 38. Id.
91 (1st Cir. 2006); Hoeft v. MVL Grp., Inc., 343 F.3d 57, 64 (2d Cir.
2003); Duluhos v. Stasberg, 321 F.3d 365, 370 (3d Cir. 2003); Three S 39. Advest, Inc. v. McCarthy, 914 F.2d 6, 10 (1st Cir. 1990) (quoting O.R.
Delaware, Inc., v. DataQuick Info Sys., Inc., 492 F.3d 520, 527 (4th Cir. Securities, Inc. v. Professional Planning Assoc., Inc., 857 F.2d 742,747
2007); Prestige For v. Ford Dealer Computer Servs., Inc., 324 F.3d 391, (11th Cir. 1988)).
395-96 (5th Cir. 2003); Merrill Lynch, Pierce, Fenner & Smith, Inc., 40. Id. (citing Merrill lynch, Pierce, Fenner & Smith, Inc. v Bobker, 808 F.2d
v. Jaros, 70 F.3d 418, 420-21 (6th Cir. 1995); Halim v. Great Gatsby’s 930, 933 (2d Cir. 1986)).
Auction Gallery, Inc., 5I 6 F.3d 557, 563 (7th Cir. 2008); Manion v.
41. Note, however, that the court in Advest did find that, “[i]n certain
Nagin, 392 F.3d 294, 298 (8th Cir. 2004); Collins v. D.R. Horton, Inc.,
circumstances, the governing law may have such widespread
505 F.3d 874, 879 (9th Cir. 2007); Dominion Video Satellite, Inc. v.
familiarity, pristine clarity, and irrefutable applicability that a court
Echostar Satellite LLC, 430 F.3d 1269, 1275 (10th Cir. 2005); Scott v.
could assume the arbitrators knew the rule and, notwithstanding,
Prudential Sec., Inc., 141 F.3d I007, 1017 (11th Cir. 1998); Lessin v.
swept it under the rug.” Id. However, the court found that “[t]he
Merrill lynch, Pierce, Fenner & Smith, Inc., 481 F.3d 813,821 (D.C.
case at bar... is not cut to so rare a patter. ...” Id.
Cir. 2007)).
42. See O.R. Sec., Inc. v Prof’l Planning Assocs., 857 F.2d 742, 747 (11th
25. See infra Part IV(a)(i)-(iii).
Cir. 1988) (“In fact, when the arbitrators do not give their reasons,

84 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 it is nearly impossible for the court to determine whether they 65. According to Jill Gross, “[w]hile the precise test varied from circuit
acted in disregard of the law.”). to circuit, most courts agreed that, to persuade a court to vacate
an award on manifest disregard ground, the losing party must
43. Burch, supra note 17, at 63 (citing Norman S. Posner, Judicial Review
show: (1) the arbitrators knew of a governing legal principle yet
of Arbitration Awards: Manifest Disregard of the Law, 64 Brook. L.
refused to apply it or ignored it altogether; and (2) the law that
Rev. 471, 505-506 (1998)(“given the fact that arbitrators seldom
the arbitrator ignored was well defined, explicitly, and clearly
write opinions explaining their decisions, there is little likelihood
applicable to the case.” Gross, supra note 10, at 236.
that a losing partly in an arbitration will be able to persuade a
reviewing court that the arbitrators manifestly disregarded the 66. Bolt, supra note 62, at 164 (citing Duferco Int‘l Steel Tracing v. T
law.”). Klaveness Shipping A/S, 333 F.3d 87, 91 (1st Cir. 2006)(“[W]e mean
by manifest disregard of the law a situation where it is clear from
44. Id.
the record that the arbitrator recognized the applicable law-and
45. Id. ignored it.”)).
46. Id. 67. Hall St. Assocs., L.L.C. v Mattel, Inc., 552 U.S. 576 (2008).
47. Id.; Hayford, supra note 32, at 127-128 (“This second model for the 68. Huber, supra note 11, at 558.
‘manifest disregard’ of the law analysis is the most troublesome of
69. Davis, supra note 19, at 99. See Kevin Patrick Murphy, Alive But
the three.... It raises the prospect of vacatur when a party believes
Not Well: Manifest Disregard After Hall Street, 44 Ga. L. Rev. 285, 300
that (i) the controlling law is beyond dispute, and (ii) the award
(2009-2010).
is clearly inconsistent with that law.... Reduced to its essence, this
second approach to the ‘manifest disregard’ of the law analysis 70. Hall Street, 552 U.S. at 578. See also, Chen, supra note 8, at 1889; Ann
consists of nothing more than a determination of whether the C. Gronlund, The Future of Manifest Disregard As a Valid Ground for
arbitrator made an error of law that a reviewing court is unwilling Vacating Arbitration Awards in Light of the Supreme Court’s Ruling
to tolerate.”). in Hall Street Associates, L.L.C. v. Mattel, Inc., 96 Iowa L. Rev. 1351,
1362 (2010-2011); Murphy, supra note 69, at 300; John Diaconis &
48. Burch, supra note 17, at 63 (citation omitted).
Ari Diaconis, supra note 23, at 13; Huber, supra note 11, at 588-60.
49. Willemijn Houdstermaatschappij, BV v. Std. Microsystems Corp., 103
71. Murphy, supra note 69, at 300.
F.3d 9, 12-13 (2d Cir. 1997).
72. Gronlund, supra note 70, at 1362.
50. Id. (citing Siegel v Titan Indus. Corp., 779 F.2d 891, 893 (2d Cir. 1985)
(quoting Bell Aerospace Co. Div. of Textron v. Local 516, 356 F. Supp. 73. Murphy, supra note 69, at 301.
354, 356 (W.D.N.Y. I 973), rev’d on other grounds, 500 F.2d 921 (2d 74. Hall Street, 552 U.S. at 585. See Huber, supra note 11, at 558
Cir. 1974))). (“This argument was easily turned away by the Court: judicial
51. Id. (citing Merrill Lynch, 808 F.2d at 933). See also supra note 40. interpretation that expands the scope of review does not provide
a basis for private parties to alter review by private agreement.
52. Burch, supra note 17, at 63-64 (citing Wilko, 346 U.S. at 436-37).
Besides, Wilko ‘expressly reject just what Hall Street asks for here,
53. Id. at 63. general review for an arbitrators’ legal error.”’).
54. Id. at 64; Hayford, supra note 32, at 130 (“The framework for 75. Hall Street, 552 U.S. at 585.
analysis under this third model works backwards from an arbitral
76. Huber, supra note 11, at 559; Murphy, supra note 69, at 300 (“The
outcome the reviewing court believes to be flawed as a matter
Court’s response to [Hall Street’s assertion that courts have
of law, confirmed by an exhaustive evaluation of the factual
been permitted to expanded review since Wilko created manifest
record made in arbitration. This judicial rethinking of the factual
disregard] has prompted a debate over whether the fifty-five-year-
questions and the questions of application of law to facts integral
old doctrine is no longer good law, if indeed it ever was.”).
to the resolution of the matter in arbitration is coupled with a
search for evidence in the record upon which the court can base a 77. Gross, supra note 10, at 236.
presumption of arbitral knowledge of the correct law. Once that 78. Jonas Cullemark, Wachovia Securities, LLC v. Brand (2012): The
evidence is identified the court is free to ‘bootstrap’ its way to the Fourth Circuit’s Dubious Position in the Ongoing Federal Circuit Split
inference that the arbitrator must have ignored the relevant law in in the Application of “Manifest Disregard of the Law” as a Basis for
fashioning an award the court believes is contrary to the law.”). Vacatur of Arbitration Awards Following the U.S. Supreme Court’s Hall
55. Montes v. Shearson Lehman Bros., Inc., 128 F.3d 1456 (11th Cir. 1997). Street Decision (2008), 22 U. Miami Bus. L. Rev. 1, 13 (2013-2014).
See also, Milligan v. Piper Jaffray, Inc., 148 F.3d 197 (2d Cir. 1998). 79. Davis, supra note 19, at 102-103.
56. The court agreed that a claim of manifest disregard only applies 80. See Davis, supra note 19, at 103-107; Stanley A. Leasure, Arbitration
where the arbitrator is “conscious of the law and deliberately Law in Tension After Hall Street: Accuracy or Finality?, 39 Ualr L.
ignore[s] it,” Montes v. Shearson Lehman Bros., 128 F.3d at 1461, Rev. 74, 84-101 (2016); Cullemark, supra note 78, at 13-17; Mylinda
and that incorrect interpretation of the law will not satisfy this
K. Sims & Richard A. Bales, Much Ado About Nothing: The Future
standard. Id.
of Manifest Disregard After Hall Street, 62 S. C. L. Rev. 407, 424- 430
57. Montes, 128 F.3d at 1461. See Hayford, supra note 32, at 19; Burch, (2010-2011). See also, Huber, supra note 11, at 560-577.
supra note 17, at 64.
81. Leasure, supra note 80, at 84.
58. Hayford, supra note 32, at 129. See also, Burch, supra note 17, at 64.
82. Citigroup Global Markets, Inc. v. Bacon, 562 F.3d 349, 350 (5th Cir.
59. Montes, 128 F.3d at 1461. 2009).
60. Burch, supra note 17, at 64; see Hayford, supra note 32, at 125-32 83. See id.; Leasure, supra note 80, at 85; Leigh F. Gill, Manifest
(comparing all three approaches). Disregard After Hall Street: Back from the Dead: The Surprising
61. See Gross, supra note 10, at 236. Resilience of a Non-Statutory Ground for Vacatur, 15 Lewis & Clark
L. Rev. 265,272 (2011).
62. See Weathers P. Bolt, Much Ado About Nothing: The Effect of Manifest
84. Citigroup Global Markets, 562 F.3d at 358 (“In the light of the
Disregard on Arbitration Agreement Decisions, 63 Ala. L. Rev. 161,
Supreme Court’s clear language that, under the FAA, the statutory
164 (2011-2012).
provisions are the exclusive grounds for vacatur, manifest
63. Note, however, that according to John and Ari Diaconis, despite disregard of the law as an independent, nonstatutory ground for
the Circuit Courts’ diverging interpretations and application of setting aside an award must be abandoned and rejected.”).
manifest disregard, a common theme emerged among the circuits:
85. See id.; Cullemark, supra note 78, at 15; Gill, supra note 83, at 272;
“courts rarely and only in the most egregious of circumstances
Sims & Bales, supra note 80, at 425.
vacated [arbitral awards] based on manifest disregard.” John and
Ari Diaconis, supra note 23, at 10-11. 86. Citigroup Global Mkts., 562 F.3d at 358. Although manifest
64. Bolt, supra note 62, at 164. disregard as a non-statutory, common-law, ground for vacatur
may not have survived Hall Street, according to John and Ari

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 85
 Diaconis, manifest disregard “did survive Hall Street insofar as 107. Jack Jarrett, What’s in a Name? Why Judically Named Grounds for
an arbitrator will ‘exceed its power’ under FAA Section 10(a) Vacating Arbitral Awards Should Remain Available in light of Hall
(4) when it ‘is fully aware of[a] controlling principle of law and Street, 20 Geo. Mason L. Rev. 909, 922 (2012-2013) (citing Duferco
yet does not apply it.”’ John and Ari Diaconis, supra note 23, Int‘l Steel Trading v. Kalveness Shipping AIS, 333 F.3d 383, 289 (2d Cir.
at 19 (quoting Citigroup Global Mkts. Inc. v Bacon, 562 F.3d 349, 2003)).
357-58 (5th Cir 2009)). However, John and Ari Diaconis note 108. Stolt-Nielsen, 548 F.3d at 94.
that the Fifth Circuit tends to perceive the phrase “manifest
disregard” negatively; as a result, “litigants should refer 109. Sutherland Global Servs. v Adam Techs. Int’l SA de C. V., 639 F App’x
to only FAA Section 10(a)(4) when arguing on what would 697, 699 (2d Cir. 2016) (citing Hall Street, 552 U.S. at 584).
otherwise be manifest disregard grounds.” Id. See also, McKool 110. Sutherland Global, 639 F App’x at 699 (citing Schwartz v. Merrill
Smith, P.C. v. Curtis Int’l, Ltd., 650 F. App’x 208, 213 (5th Cir. Lynch & Co., 665 F.3d 444, 451-52 (2d Cir. 2011) (quoting TCo Metals,
2016) (“Assuming-without deciding-that manifest disregard of LLC v. Dempsey Pipe & Supply, Inc., 592 F.3d 329,340 (2d Cir. 2010))).
the law can be a statutory basis for vacatur, Curtis fails to show
that the arbitration award was in manifest disregard of Texas 111. Leasure, supra note 80, at 96; Comedy Club, Inc. v Improv W. Assocs.,
law.”). 553 F.3d 1277 (9th Cir 2009).
87. Med. Shoppe Int’l, Inc. v. Turner lnvs., Inc., 614 F.3d 485,489 (8th Cir. 112. Comedy Club, Inc. v. Improv W. Assocs., 553 F.3d 1277, 1290 (9th Cir
2010) (“We have previously recognized the holding in Hall Street 2009).
and similarly hold now that an arbitral award may be vacated 113. Rephan, supra note 96.
only for the reasons enumerated in the FAA. See Crawford Group,
Inc. v. Holekamp, 543 F.3d 971,976 (8th Cir. 2008) (citing Hall Street, 114. Comedy Club, 553 F.3d at 1290, 1283.
552 U.S. at 584).”). 115. Id. at 1283.
88. Leasure, supra note 80, at 87. 116. Wetzel’s Pretzels, LLC v. Johnson, 567 F App’x 493, 494 (9th Cir. 2014)
89. Med. Shoppe Int’/, 614 F.3d at 489 (citing Hall Street, 552 U.S. at (citing Biller v. Toyota Motor Corp., 668 F.3d 655, 665 (9th Cir. 2012)
586). (internal quotation marks and citations omitted)).

90. Air Line Pilots Ass‘n Int’l v. Trans States Airlines, LLC, 638 F.3d 572, 117. Id.
579 (8th Cir. 2011). 118. See Wachovia Sec., LLC v. Brand, 671 F.3d 472,483 (4th Cir. 2012)
91. John & Ari Diaconis, supra note 23, at 20-21. (“[W]e adopted a two-part test that a party must meet in order
for a reviewing court to vacate for manifest disregard: ‘(1) the
92. Frazier v. Citifinancial Corp., LLC, 604 F.3d 1313 (11th Cir. 2010). applicable legal principle is clearly defined and not subject to
93. Id. at 1324. reasonable debate; and (2) the arbitrator[ ] refused to heed that
legal principle.’ We do not read Hall Street or Stolt-Nielsen as
94. Id. (citing Hall Street, 552 U.S. at 586 (“the text compels a reading loosening the carefully circumscribed standard that we had
of the §§ 10 and 11 categories as exclusive”); id. at 589 (“the previously articulated for manifest disregard.” (Citation omitted)).
statutory text gives us no business to expand the statutory
grounds”); id. at 590 (“§§ 10 and 11 provide exclusive regimes for 119. John & Ari Diaconis, supra note 23, at 18.
the review provided by the statute”)). 120. Wachovia, 671 F.3d at 483.
95. Leasure, supra note 80, at 89; Campbell’s Foliage, Inc. v. Fed. Crop Ins. 121. Dewan v Walia, 544 F. App’x 240, 246, n. 5 (4th Cir. 2013) (citing
Corp., 562 F. App’x 828 (11th Cir. 2014), cert. denied,_ U.S._, 135 S. Wachovia, 671 F.3d at 483).
Ct. 145 (2014).
122. Adviser Dealer Servs. v. Icon Advisers, Inc., 557 F. App’x 714, 717
96. Jack Rephan, Is Manifest Disregard of the Law a Ground for Vacating (10th Cir. 2014) (internal citation omitted).
Arbitration Awards?, Pender & Coward (March 2, 2016),
available at: https://www.pendercoward.com/resources/blog- 123. Abbott v. Law Off. of Patrick J. Mulligan, 440 F. App’x 612 (10th
opinions-and-observations/is-manifest-d isregard-of-the-1aw- Cir. 2011 ).
still-a-ground-for-vacating-arbitration-awards-march-2016/. 124. Rephan, supra note 96.
97. John & Ari Diaconis, supra note 23, at 19. 125. Scodro, supra note 14, at 569.
98. Coffee Beanery, Ltd. v. WW, L.L.C., 300 F. App’x 415 (6th Cir. 2008), 126. See Judith M. Stinson, Why Dicta Becomes Holding and Why It
cert. denied, 558 U.S. 819 (2009). Matters, 76 Brook. L. Rev. (2010).
99. Rephan, supra note 96. 127. DICTUM, Black’s Law Dictionary (10th ed. 2014) (“judicial
100. Coffee Beanery, 300 F. App’x at 418. dictum (1829). An opinion by a court on a question that is directly
involved, briefed, and argued by counsel, and even passed on by
101. Id. at 418 (citing Wilko v. Swan, 346 U.S. 427, 436 (1953) the court, but that is not essential to the decision and therefore not
(overruled on other grounds by Rodriguez de Quijas v. binding even if it may later be accorded some weight.”).
Shearson/Am. Express, Inc., 490 U.S. 477, 109 S. Ct. 1917, 104 L. Ed.
2d 526 (1989)). 128. Hall Street, 552 U.S. at 585.

102. Coffee Beanery, 300 F. App’x at 418. 129. Gross, supra note 10, at 239.

103. John and Ari Diaconis, supra note 23, at 19. According to John and 130. Id.
Ari Diaconis, the court supported this position by arguing that 131. Id.
the Supreme Court’s opinion in Hall Street is open to multiple
132. See supra Part IV(d).
interpretations, and therefore provided insufficient means for
overruling “a doctrine which prior to 2009 was ‘universally’ 133. For more information regarding the weakening foundation of the
recognized by the Court of Appeals.” Id. doctrine of manifest disregard following the Supreme Court’s
decision in Wilko, see Murphy, supra note 69, at 306.
104. Rephan, supra note 96.
134. See supra Part IV(b)-(d).
105. Some commentators assert that the Fourth Circuit falls within this
group; however, as discussed infra Part IV(d)(i), the Fourth Circuit 135. See, e.g., Stolt-Nielsen S. A. v. Animal Feeds Int’l Corp., 559 U.S. 662, 672,
does not appear to have definitively adopted the position that the n.3 (2010) (“We do not decide whether ‘manifest disregard’ survives
doctrine of manifest disregard survived Hall Street as a judicial our decision in Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S.
gloss/shorthand or as independent, non-statutory, ground for 576,585, 128 S. Ct. 1396, 170 L. ed. 2d 254 (2008), as an independent
vacatur. ground for review or as a judicial gloss on the enumerated grounds
for vacatur set forth at 9 U.S.C. § 10.”); Campbell’s Foliage, Inc. v. Fed.
106. Stolt-Nielsen S.A. v AnimalFeeds Int’l Corp., 548 F.3d 85, 95 (2d Cir.
Crop Ins. Corp., 562 F. App’x 828 (11th Cir. 2014), cert. denied,_ U.S._,
2008).
135 S. Ct. 145 (2014); Coffee Beanery, Ltd. v. WW, L.L.C., 300 F. App’x
415 (6th Cir. 2008), cert. denied, 558 U.S. 819 (2009).

86 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
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Steven Skulnik One Rockefeller Plaza Joan D. Hogarth
438 West 23rd Street 11th Floor Norman Solovay The Law Office of Joan D.
New York, NY 10011 New York, NY 10020-1513 The Solovay Practice Hogarth
sskulnik@gmail.com goldstein@lexmarc.us 260 Madison Avenue, 15th Fl. 43 West 43rd Street
New York, NY 10016 New York, NY 10036
nsolovay@solovaypractice.com jnnhogarth@aol.com

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 87
The Dispute Resolution Section Welcomes New Members
(September 2017 - March 2018)
First District Second District Ninth District: Out of State (continued)
(continued)
Noam M. Besdin Nicholas Anselmi Sofiana M.
Philip Goldstein Bird-Loustaunau
Lena Bruce Sydney Bertsch
Katelyn James Howard R. Broadman
Peter A. Cross Julian Charles Glatt
Jocelyn Normand Adam Elliott Butt
Sophia Dauria Steven C. Kasarda
Hillary Ann Packer Tae-Jin Cha
John M. Delehanty Jason Krinsky
Tushara Laka Saint Vitus Ahwon Choi
Todd L. Drucker Stephanie E. Lary
Dohney Schlau Sylvia Y. Chou
Janna Eljamal Prof. Thomas M. Madden
Randall Tesser Arbion Duka
Evan K. Farber Patti F. Potash
Hon. Helen E. Freedman Sam Rosmarin Margarita Echevarria
Third District Peter Fox QC
Joshua E. Fruchter Martin Tackel
Michael E. Cusack Leonardo Grebler
Robert D. Gallo Russell M. Yankwitt
Hon. Brian R. Haak William G. Hauserman
Noah J. Hanft Margaret G. Blascetta
Lance R. Plunkett Charles Felix Herd, Jr.
Linda S. Kagan
Michele Ellen Tenth District Reginald A. Holmes
Kern-Rappy Fourth District Nadja Jaisli
Briana Aracena Delaney
David J. Kerstein Catherine M. Bennett Sherley Joseph-Roper
Ray Deleo
Marilyn Clapp Kunstler Yuko Kanamaru
Gregg Donnenfeld
Karen Langer Fifth District Lucy Anne Keane
Arthur D. Felsenfeld
Ashley Ann LeBlanc James William Elie Kleiman
Cunningham Kenneth Sean Kast
Michael Wookeun Lee Xiao Ma
John D. Nagy
Frank Maas Thomas F. Margiotti
Sixth District Karl Judah Silverberg
Ilana Jenny Marcus Antonio Marzagao
Sarah Ahmed Kayley Sullivan Barbuto Neto
Joel B. Mayer
Mary Louise Conrow Jeffrey A. Wurst Jose Antonio Masini
Barbara S. Mehlsack Torres
Marcie Ann Finlay
Celinda Metro John F. Matouk
Hanna Lankar Eleventh District
Hon. Leo Elias Milonas Kieran John McCarthy
Styn Winters Isabel Brown
Peter Payam Rahbar Paul McGarry
John A. Gemelli
Camille A. Ramos-Klee Jason Falk Miller
Seventh District Maria V. Hanford
Julian Ranetunge Edward J. Murphy
William G. Bauer Kevin Charles Jones
Hon. David B. Saxe Michal Andrzej
Terria P. Jenkins Shadazaih Lucas
Bianca Victoria Scott Pyrzowski
Thomas A. Luckini Fariha Syed
Kenneth L. Small Bradley L. Roth
Thomas Somare Tarnow Harold I. Steinbach
Iyana Y. Titus
Thirteenth District
Lawrence I. Weinstein D. Charles Stohler
Eighth District Louis C. Annunziata
Piotr S. Wojtowicz Philip Cheng Yew Tan
Audrey R. Herman Melissa Bartone
David Zaslowsky Andrew Tramont
William A. Long, Jr. Patrick Seamus Walters
Luwing J. Peche Loayza Out of State
Second District Deanne M. Wilson
Kaylan Porter Douglas Randall Balyeat
Jocelyn Lenare Burgos Wei Zhang
Rebecca Postek Raymond G. Bender
PeggyAnne Cooke

88 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 Escape the Fray

Battle of Munfordville, Kentucky, Sunday, Sept. 14th, 1862, c1863, by Harper’s History of the Great
Rebellion, Harper’s Weekly

Enlist in the Dispute Resolution Section

Find out how you can:
• Employ Dispute Resolution in virtually every practice area
• Stay on top of ADR opportunities, techniques and procedures with our CLE
courses and publications
• Network with Dispute Resolution practitioners and leaders in our field
• Develop skills in negotiating, representing your client and selecting good
mediators and arbitrators
For more information visit www.nysba.org/drs and
join today at drs@nysba.org or call 518-463-3200

NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1 89
New York Dispute Resolution Lawyer Dispute Resolution Section
Co-Editors-in-Chief
Officers
Edna Sussman Laura A. Kaster Chair
SussmanADR Laura A. Kaster LLC Daniel F. Kolb
20 Oak Lane 84 Heather Lane Davis Polk & Wardwell
Scarsdale, NY 10583 Princeton, NJ 08540 450 Lexington Avenue
esussman@sussmanadr.com laura.kaster@gmail.com New York, NY 10017-3911
Sherman W. Kahn daniel.kolb@davispolk.com
Mauriel Kapouytian
Woods LLP Chair-Elect
27 West 24th Street, Suite 302 Deborah Masucci
New York, NY 10010 Masucci Dispute Management and
skahn@mkwllp.com Resolution Services
20 Polhemus Place
Brooklyn, NY 11215
dm@debmasucciadr.com
Board of Editors
Leona Beane Stefan B. Kalina Vice-Chair
11 Park Place, Suite 1100 Cox Padmore Skolnik & Theodore K. Cheng
New York, NY 10007 Shakarchy LLP Fox Horan & Camerini LLP
LBMediateADR@aol.com 630 3rd Ave, 19th Floor
825 Third Avenue
Geraldine Reed Brown New York, NY 10017-6735
kalina@cpsslaw.com New York, NY 10022
The Reed-Brown Consulting tcheng@foxlex.com
Group Paul B. Marrow
180 Union Street 11 Hunting Ridge Place
Montclair, NJ 07042 Chappaqua, NY 10514 Secretary
RBCG1@aol.com pbmarrow@optonline.net Alfreida B. Kenny
Law Office of Alfreida B. Kenny
Gail R. Davis Rona G. Shamoon 111 John Street
Resolutions NY Inc. Skadden, Arps, Slate,
120 East 30th Street Suite 800
Meagher & Flom, LLP
New York, NY 10016-7303 Four Times Square New York, NY 10038
gdavis@resolutionsny.com New York, NY 10036 abkenny@abkenny.com
Erin M. Hickey rona.shamoon@skadden.com
Treasurer
Fish & Richardson PC Norman Solovay
Citigroup Center, 52nd Floor Barbara Antonello Mentz
McLaughlin & Stern, LLP
153 East 53rd Street 260 Madison Avenue 140 West 86th Street
New York, NY 10022 New York, NY 10016 New York, NY 10024
hickey@fr.com nsolovay@mclaughlinstern. bmentz@mentz.org
Jae Soog Lee com
26 Sutton Terrace Immediate Past Chair
Karen Mills
Jericho, NY 11753 KarimSyah Law Firm Abigail J. Pessen
jaesooglee@yahoo.com 7th Floor, Plaza Mutiara Dispute Resolution Services
Jl. Lingkar Mega Kuningan 372 Central Park West
Barbara Antonello Mentz
Kav. 1 & 2 New York, NY 10025
140 West 86th Street
New York, NY 10024 Jakarta 12950 INDONESIA abigail@pessenadr.com
bmentz@mentz.org kmills@cbn.net.id

Accommodations for Persons with Disabilities:

NYSBA welcomes participation by individuals with disabili- The New York Dispute Resolution Lawyer is distributed to mem-
ties. NYSBA is committed to complying with all applicable laws bers of the New York State Bar Association’s Dispute Resolution
that prohibit discrimination against individuals on the basis of Section without charge. The views expressed in articles in this
disability in the full and equal enjoyment of its goods, services, publication represent only the author’s viewpoint and not nec-
programs, activities, facilities, privileges, advantages, or accom- essarily the views of the Association, the Section or its Officers.
modations. To request auxiliary aids or services or if you have any
questions regarding accessibility, please contact the Bar Center at © 2018 by the New York State Bar Association
(518) 463-3200. ISSN 1945-6522 (print) ISSN 1945-6530 (online)

90 NYSBA New York Dispute Resolution Lawyer | Spring 2018 | Vol. 11 | No. 1
 NEW YORK STATE BAR ASSOCIATION

DISPUTE RESOLUTION SECTION

International Dispute Resolution Committee

The In Camera Breakfast Series:

Exploring Intra-Tribunal Dynamics and Decision-Making

Please join the International Dispute Resolution Committee of the NYSBA’s Dispute Resolution Section for
a two-part breakfast series on the inner workings of arbitral tribunals.

0ART)The Tribunal’s Crystal Ball:

Models, Experts, and Estimates in High-Stakes Cases
April 26, 2018, 8:30-10:00 a.m.
Baker & McKenzie LLP, 452 5th Ave., New York CityRemote dial-in also available
Catherine Amirfar, Debevoise & Plimpton LLP * Mark Kantor, Independent Arbitrator
* Kathleen Paisley, Ambos, NBGO * David Zaslowsky, Baker & McKenzie LLP (moderator)
Part I will explore how tribunals analyze and resolve tricky damages questions. Is it wise, for example,
to ask party experts to provide arbitrators with calculations in excel spreadsheets so the arbitrators can
manipulate them? Should damages questions be a topic at the preliminary conference?

0ART))The Law According to Whom?(OW!RBITRATORS@'ETIT2IGHT

May 23, 2018, 8:30-10:00 a.m.
Hogan Lovells LLP, 875 3rd Ave., New York City
Samaa Haridi, Hogan Lovells LLP * Judge Faith Hochberg, Judge Hochberg ADR * Robert Smit,
Independent Arbitrator * Marc J. Goldstein, Independent Arbitrator (moderator)
Part II will consider how arbitrators find and determine applicable law. Is “the law” in arbitration confined
to what the parties submit? Are there different norms and expectations in domestic vs. international
arbitrations as to how far an arbitrator can or should go in researching the law or the extent to which
such research must be shared with the parties?

Organized by International Dispute Resolution Committee Co-Chairs

Stephanie Cohen & Marc J. Goldstein
 N E W Y O R K S TAT E B AR AS S OC I AT I ON NON PROFIT ORG.
DISPUTE RESOLUTION SECTION U.S. POSTAGE
PAID
One Elk Street, Albany, New York 12207-1002
ALBANY, N.Y.
PERMIT NO. 155

From the NYSBA Book Store

Arbitration and
Mediation
Authors
PRODUCT INFO AND PRICES Leona Beane, Esq.
2017-2018 / about 154 pp., softbound Kelly A. Librera, Esq.
PN: 40248 (Book w/Forms) Margaret K. Ciavarella, Esq.
PN: 40248E (Downloadable PDF)
This practice guide examines the two most common
NYSBA Members $125 forms of alternative dispute resolution–Arbitration
Non-members $165 and Mediation. Arbitration and Mediation resolves
$5.95 shipping and handling within the continental U.S. The the misconception that these two procedures are
cost for shipping and handling outside the continental U.S. will interchangeable by discussing their differences and
be based on destination and added to your order. Prices do not providing examples of when each procedure should be
include applicable sales tax.
used.

Complete with valuable practice pointers, sample

Get the Information Edge arbitration forms and appendices, this practice guide
also includes Downloadable Forms.
NE W YO R K STAT E B AR A SSO CI ATI ON
1.800.582.2452 www.nysba.org/pubs
Mention Code: PUB8958N