What other issues should be considered?
The contract should, of course, specify what law applies and with it the location for the arbitration proceedings. Another issue to consider is whether a court or the arbitral panel will decide questions of preliminary injunctive relief. If the contract contains an agreement to arbitrate, but lacks express language authorizing a party to seek preliminary injunctive relief from a court, then a party may find itself having to wait for the constitution of arbitration proceedings before having the means to gain immediate relief. In this respect, arbitration may actually create delay.
How does discovery work in arbitration?
Because the agreement is usually entered into at a time when the parties do not know the substance of their dispute (and would presumably hope that no dispute ever occurs), the parties are ignorant of the particulars that might make broad discovery rights more beneficial to one side over another. Of course, the broader the discovery, the more expensive and time-consuming the process becomes. Leaving discovery issues to the discretion of the arbitrators is one solution. Coupling that discretion to the amount in controversy and time limits for completion is another. Thus, parties may agree in advance that only a limited number of depositions will be permitted, unless the value of the claim exceeds a certain amount, in which case the arbitrators may permit additional depositions, and, in any event, discovery must be completed within a certain set time period after the arbitration panel is constituted.
How is international arbitration handled?
If the contract is between parties of different countries, then there are other issues to consider. The parties may agree to select established institutionalized rules of procedure of the ICC, UNCITRAL and ICSID to bring some structure and certainty to the process. International arbitration often presents a vastly different method for the gathering of proof and the subsequent presentation of evidence. These differences reflect distinctions between the common law and civil law traditions, coupled with primary purposes for arbitration including less costly and speedier resolutions to disputes. For instance, the presentation of evidence before arbitral tribunals is often made through affidavits submitted by the parties. Accordingly, it is often the case that the arbitration hearing will provide the first (and only) occasion a party will have to examine adverse witnesses, giving rise to the need for broad document production in advance of the hearing and, conversely, extreme care in witness preparation.
H. Eugene Lindsey III is a member of the litigation department at Katz Barron Squitero Faust. Reach him at [email protected].
