Module 3 Chapter 7: Arbitration: Identifying and Handling Issues

• The most important part of arbitration is identifying what the parties are arguing about.
• Failure to properly identify the issues can lead to an unenforceable award.
• This chapter examines the process of identifying and handling issues, analyzing evidence, and structuring the award.

Learning Objectives

• Describe the meaning of 'issues' in arbitration.
• Explain the importance of identifying and determining issues for the award's content.
• Use a structured process for identifying, analyzing, and deciding on issues.

Adversarial vs. Inquisitorial Systems

• In common law jurisdictions like the UK and USA, the adversarial system is used.
• Parties present their cases, and the tribunal decides based on the evidence.
• Evidence is tested through oral or written submissions and a review of factual and expert evidence.
• Tribunals in common law jurisdictions generally do not actively interrogate parties or evidence.
• Civil law jurisdictions use the inquisitorial system, where the tribunal actively investigates the case and questions witnesses.
• Arbitrators can adopt either approach based on the dispute's nature and the parties' wishes.
• Inquisitorial approaches need caution to avoid challenges related to apparent bias.

What is an Issue?

• An issue is a proposition of fact or law asserted by one party and denied by the other, needing a tribunal's decision.
• Arbitration decisions can involve multiple issues.
• Examples of issues include determining the contract's existence and terms, breach of contract, entitlement to repudiation, and loss claims.
• Arbitration requires a crystallized dispute for the arbitrator to have jurisdiction.
• Disputes can be identified from correspondence containing allegations and claims.
• Allegations must be condensed into concise issues.

Submissions

• Issues are defined through pleadings or statements of case.
• Each party must state its case and respond to the opponent's case.
• This is an effective way to define the issues in dispute.
• Principles of natural justice must be followed.
• The typical arbitration process goes as follows:
  • The claimant pleads their claim.
  • The respondent pleads a defense and counterclaim if applicable.
  • The claimant replies to the defense, addressing new points.
  • Admissions are agreed upon and no longer disputed.
  • Denials do not require an answer.
• Rejinders, surrejoinders, and rebuttals are increasingly rare.

The Importance of Defining Issues

• It is important to have well-defined issues before writing the award.
• Arbitrators need the parties' to help ensure clear issue definition.
• The procedure leading to the award should focus on identifying clear issues.
• Ideally, responses should follow the referral format, admitting or denying parts of it.
• Helps the arbitrator draw up a list of admitted and disputed points.
• Disputed items are the issues needing resolution in the award decision.
• A list of issues aids in identifying relevant evidence and documentation.
• Arbitrators can use the list as an agenda for meetings.
• After this procedure, the arbitrator knows where to start when writing the decision.

Who Defines the Issues

• Given sufficient time, an arbitrator can agree on a list of issues with the parties.
• The arbitrator may need to prepare the list themselves.
• Defining issues ensures all disputes between the parties are addressed.
• Providing the issue list to parties for comment is a good practice, especially in complex cases.
• The arbitrator must ensure the issues are defined before writing the award as modern disputes rarely turn on a single issue.
• Preparing an issue list from submissions is an analytical process.
• Usually, issues don't arise one after another with equal importance; there are main and sub-issues.
• Whether to deal with sub-issues depends on the decision on the main issue.

Examples of Main and Sub-Issues

• Contract Between the Parties: If the claimant seeks contract remedies, and the respondent denies the claims, the arbitrator must first determine the contract terms.
• Respondent Liability: In damage claims for breach of contract, the arbitrator must first decide if the respondent is in breach before assessing damages.
• Cause of Loss: Claimants can overlook causation issues.
• If the claimant experienced loss, and the respondent breached the contract, the two are obviously linked.
• Claimants can only succeed if the respondent's breach caused the claimant's loss.
• Damages: Disputes can arise on calculating damages.
• The quantum of losses is considered once the calculation method is decided.

How Detailed Should Analysis Be

• Detailed analysis is required but timeliness and efficiency also matter.
• Adopting a chart approach can help define issues/sub-issues and analyze evidence.
• Organizing evidence helps check for consistency and corroboration in reaching a decision.
• This approach aids necessary analytical processes necessary to identify the issues raised in the arbitration for decision, the evidence in support, evaluate the evidence and then decide the dispute.

Issues Not Raised by the Parties

• An arbitrator is not entitled to raise or decide on points not pleaded or argued by either party.
• An arbitrator who interferes in the parties' presentation risks the enforceability of the award.
• Arbitrators normally leave it to the parties to conduct their cases.
• If the arbitrator feels they must decide a point not raised by the parties it is key to give the parties a chance to address him on the point.
• An issue decided without allowing the parties to address them is a clear example of procedural unfairness results in a successful challenge to the award on enforcement.

Issues In Practice

• Section looks at some of the points in more detail including practical advice for the arbitrator.

Preliminary Work

• Key to undertake preliminary work before writing the award.

Defining Issues- What, Why, When and How

• Decisions on matters that are not in dispute may result in the entire award being unenforceable.
• Identify areas of agreement, then create a list of disputed issues requiring decision.
• The purpose of clarifying the issues is to identify clarity and structure.
• Arbitrators should start early, with the assistance of the parties, if possible.
• The list divides the dispute and serves as a checklist for writing the award.

Ordering and Handling Issues

• The arbitrator may ask the parties to each provide their own list of issues.
• This helps to form the final issue list.
• Some arbitrators provide a provisional list and invite comment.

Identifying the Issues

• The issues are found in the submissions and are usually in the form of questions.
• The arbitrator must consider and logically conclude each issue.
• Each issue should be approached in sequence.

Contentions on the Issues

• Each issue should briefly summarize the issue, setting out:
  • The contentions of the parties.
  • Relevant evidence from witnesses.
  • Any further representations made by the parties, for example during an arbitration meeting.

Summarizing Evidence

• It is not necessary to summarize everything in the parties' submissions.
• Enough should be put so that the parties understand their submission has been considered.
• Explain what has persuaded the arbitrator and why.
• Legalese is complicated for lay people.
• Remember that the award will be read by people, often lay-people.

Findings of Fact

• Agreed and disputed facts should be set out.
• A finding should then be made on the disputed facts and apply them in deciding the dispute.
• Reasons maybe given for preferring one person’s factual finding to another’s.

Guidelines to Why the Arbitrator Favored One Witness's Account

• The person was independent to the parties.
• The witness had made a contemporary record of what he had seen.
• The witness was in a good position to know what had happened.
• The witness evidence is supported by other submissions or evidence.

Expert Evidence

• The expert possessed greater practical experience than the expert on the other side
• Their evidence was more consistent
• They supported the evidence with authorities.
• Expert evidence should be treated as an expression of an honestly held opinion.
• Do not readily conclude that the evidence is wrong because it isn't persuasive.

Accepting Evidence Includes Rejecting The Other Evidence

• If certain evidence is rejected, the arbitrator should record, for example, that the relevant evidence:
  • Is contrary to what is stated in a contemporary document.
  • Was not mentioned at the time.
  • Is contradicted by one or more other witnesses.
  • Is unsupported by other evidence.
• Suggesting a witness is lying is generally deemed as unwise.

Dealing With Legal Submissions

• Application of the law to the facts is a key factor.
• When dealing with legal cases, the arbitrator must reach a decision on common submissions.
• Because the parties are in dispute, different legal contentions will exist by the parties on major issues.
• Reasoning on legal issues should be much the same.
• Must be sure that doing so doesn't exceed remit
• Any new references should be put to the parties.

Conclusions

• The arbitrator needs to first identify the facts.
• A decision should be reached on whether a party has proved a particular head of the claim.
• In claims awards, the arbitrator must decide on what the obligations of each party were, whether they were causative of any loss, and whether there has been a breach.
• To calculate damages and the financial entitlements, set out the actual figures , assessments by the arbitrator and from which dates or date the entitlement runs.

Calculating Awards

• The arbitrator should not quantify tax such as VAT/GST.

Reasoning and Decision Making

• Assisting analysis of the parties' submissions and evidence to reach the point to start drafting the award.
• Assisting the arbitrator's thoughts as to the facts and law to which they must have regard.

Reasons for Decision Making

• It is necessary to set out what, on their view of the evidence, did or did not happen.
• Succinctly explain the light that happened and why they have reached their decision.
• The most interested in the reasons often happens to be unqualified.
• Reasons should be comprehensible to intelligent but unqualified readers.

Reasoning- The Facts

• Brief statements where reasons are required for the decision.
• Reasons must be sufficient to show the arbitrator has dealt with the issues remitted to him and what his conclusions are on those issues.
• Declining to enforce for invalid reasons can only occur if the reasons were absent or unintelligible.

Non-lawyer Arbitrators

• If facts are decided, the law tends to take care of itself in this view.
• Decisions on disputed law need not be made.
• Viewing facts can simplify matters.
• Findings must only be made on points on which a decision is required.

Facts

• A decision is not required if the fact is agreed by the parties.
• Only reciting the measure of the agreement is required.
• Requirement is to weigh evidence.
• Identifying the relevant evidence and being careful in doing so.

Weighing the Evidence

• Be objective, without expressing an opinion, but rather in the form of reporting a result that is capable of being verified and confirmed by a glance at the scales.
• The result will be demonstrated and the process that is an aid to objectivity.
• Demonstrating the result, providing the way the impartiality in the award is written.
• It is important to ensure the dispute is being dealt with in an entirely independent manner. Experienced arbitrators that all disputed points relevant to the evidence should be recited together.
• Reciting the evidence and witnesses.
• Mind has to hold it all.
• Concentrate all the relevant evidence in detailed treatment of each topic.

Writing Style

• Writing the beginning of the award and writing the general explanatory narrative.

Reasoning the Law

• Factual issues are decided on the weight of evidence.
• Points of law are determined by legal argument.
• First is to identify the debate and identify the legal issues.
• Secondly, to ascertain the relevant law on the topic.
• Requiring that the parties identify the issues and statements of facts.
• In complex cases, the final step Is to apply the law and undertake the task.

The Rules of Natural Justice

• If the parties do not have an opportunity to address the arbitrator on material decided to be importance, it is important and obligatory to serve them.
• The decision-making process and finding the facts can be found with the facts matrix.
• It may be best to take it step-by-step, breaking up the process into a series of small points and dealing with each as to fact and law before going to the next one.

Case Law

• Most of these cases turn to factual issues, but there are occasions when a point of the law is absolutely fundamental to the result.
• Much of what follows will be known but with the experience in the art of advocacy.

Case Law: "Ratio decidendi"

• Precedent is the binding and acceptance of the authorities by the higher authorities.
• Identifying the ratio of deciding means the reason.
• Providing a principle that, when allied to relevantly similar facts, provides the same result.
• The final result can often be helped by the judgements and textbooks, but these are not primary judgements.

Case Law: Arbitrators

• Key points only apply to points of established law and not arbitration.
• Commercial Arbitration decisions are not precedents and are not binding.
• Commercial Arbitration decisions can be helpful.
• There is a danger they dispense with the specific needs to think about.

Case Law: Obiter Dicta

• Highly persuasive and may be helpful.
• Dealing with a matter which is not always the same as the factual matrix.

Case Law: Restrictive Distinguishing

• Principles are tested by future decisions and those processes help involve express exceptions to the overriding principle.
• Examined in several judgements for the arbitrator.

Textbooks

• Caution is advised in referring to the textbooks.

Facts

• End the arbitrator needs to not provide themselves.

Writing the Award

• Begin writing the award as the time comes to start producing and writing submissions.
• Identifying the facts and the facts.
• A draft of the open passengers can be made and identifying those facts.
• Amended drafts can always be made.
• Telling the story and defining the dispute is important.
• Including parties' legal rights with references.

Analyzing Evidence

• Early on, the arbitrator should analyze the findings to be made.
• This will be in writing and oral form.
• When dealing with the issues a summary of what was being said to set out the findings is required.
• The same is done and repeated for each case.

Meetings

• Essential notes and illegibility checks should be undertaken at the end of each day.
• Submissions should read and evidence analyzed.
• Mindful on the standard and burden of proof.
• The standard in arbitration is about the balance of probability.
• Party making a positive impact should provide truth.

Oral Evidence

• Helpful to compare that evidence to the factual evidence rising from the other sources other than the demeanour.
• Consistency of the evidence must be checked.

Conflict of Evidence

• The arbitrator should fall back on the burden of proof.
• The party should establish first the reasoning process and those aspects may be applied.
• They should not express opinions and should not be finding fact.

Assessing Experts

• Bearing in mind the mind of the court and with bearing of equal probability the party discharging will not be able to discharge.

Drawing on Expertise

• entitled to draw on is expertise, but must be done with care.
• If the theory proves to be a breach with the nature of justice, they will need to be tested.
• Number of differences in the evidence can occur when the experts did not deal with versions.
• By deciding, it may be found they have given a new opinion.
• Experts, legal advisors and assessors can be hired to assist.
• The experts should be identified by and obtained through council from the parties prior to advising.

Applying the Law

• Establishing after the facts has been usually completed with those breaches.
• All of those actions needs to provide the potential money owed or that is being sought!
• Failures to provide should be dismissed early on and the contention of what was being breached!