Arbitration: Identifying Issues and Reasoning (Chapter 7)

The Award: Issues and Reasoning

• Properly identifying the issues parties are arguing about is crucial for decision-making in arbitration.
• Failure to identify the issues leads to dealing with irrelevant matters, wasting time, exceeding the arbitrator's remit and potentially making the award unenforceable.
• Identifying and dealing with issues, and analysing relevant evidence, will help the arbitrator plan the structure of the award and begin writing

Learning Objectives

• Describe the meaning of 'issues' in the arbitration context.
• Explain the critical importance of identifying, marshalling, and determining issues to an award's substantive content.
• Utilise a structured process to identify, analyse and resolve issues in practice.

Issues-in Theory

• The adversarial system prevails in the UK, USA, and other common law jurisdictions.
• Parties present cases, and the tribunal decides issues based on evidence.
• In common law, tribunals typically do not interrogate parties or evidence but listen.
• Inquisitorial systems, common in civil law jurisdictions, involve tribunals that actively investigate and question witnesses.
• An attraction of arbitration is the arbitrator's procedural discretion.
• Arbitrators can adopt an adversarial or inquisitorial approach based on the nature of the disputes and the parties' wishes.
• Inquisitorial approach must be used cautiously to avoid challenges for apparent bias if questions seem to favor one party.

What is an issue?

• An issue is a proposition of fact or law.
• It is asserted by one party and denied by the other
• Requires a tribunal to decide.
• Arbitration can involve numerous issues, including contract terms, breaches, entitlements, and losses.
• A crystallised dispute is needed to commence arbitration and to give the arbitrator jurisdiction.
• Crystallised disputes are identified from correspondence with allegations, counter-allegations, complaints, claims.
• Complex allegations must be condensed into concise issues for the arbitrator to decide efficiently.

The submissions

• Issues are defined through pleadings or statements of case in arbitration.
• Parties must state their case and respond to the opponent's case.
• Pleadings is an effective way to define issues in the dispute.
• Principles of natural justice must be followed in arbitration and litigation.
• Claimant starts by pleading its claim.
• Respondent pleads a defence to the claim and sets out a counterclaim, if applicable.
• Claimant can reply to the defence, especially if new points are raised
• Admissions are agreed and no longer in dispute and do not need to be answered.
• Denials do not need to be answered as nothing needs explaining.
• An explanation may be required if respondent pleads "it is denied because...".
• Rejoinders, surrejoinders, and rebuttals are increasingly rare

The importance of defining the issues

• The arbitrator risks feeling overwhelmed and unprepared to write the award when the last submission arrives.
• Arbitrators need clear issues defined to conduct procedures and formulate the award efficiently
• Response should follow the format of the referral that admits or denies parts of the referral.
• Allows the arbitrator to draw up a list of undisputed and disputed items with party assistance.
• Disputed items constitute the issues that need addressing in the award decision.
• With a list of issues, the arbitrator can pinpoint the needed documentation and evidence.
• The arbitrator can guide meetings using the list of issues as an agenda.
• Starts with "Issue 1," assesses evidence strength, decides, and moves to "Issue 2."

Who should define the issues?

• An arbitrator can agree on a list of issues with the parties, given enough time.
• Although arbitrator may receive assistance from the parties he is more likely to prepare the list himself.
• Defining the issues ensures the arbitrator addresses all disputes between parties.
• Parties should be provided a list for comment, especially in complex cases if time permits.
• Modern disputes are complex, and the arbitrator must define the issues before writing the award.
• List preparation is an analytical process
• Each issue does not arise for decision one after the other, with each equally important.
• Issues are categorised as main issues and dependent sub-issues.
• Whether the sub-issues require consideration by the arbitrator is dependent on the main issues.

Examples of main and sub-issues

• The contract between the parties: The arbitrator must decide the terms if the claimant claims rights under the contract and the respondent denies the claims.
• Is the respondent liable?: If a claimant claims damages for breach of contract, the arbitrator must decide whether the respondent is in breach of contract before deciding damages.
• Did the responding parties breach cause the loss claimed?: Arbitrator must decide if the claimant's loss was caused by the respondent's breach of contract
• Damages: parties can dispute on how damages should be calculated, only the quantum of the losses can be considered.
• Finding a suitable way for dealing with main and sub-issues involves experience and judgement.

How detailed should the analysis be?

• While detailed analysis is required in arbitration, timelines and efficiency also matter.
• Charts can help define issues and sub-issues, referencing evidence for specific decisions.
• Organising evidence helps check for consistency and corroboration in decision-making.
• Identified with evidence for support and evidence that needs dispute decisions.

Issues not raised by the parties

• The arbitrator cannot raise or decide any point not pleaded or argued by either party.
• Reasons for not raising the point may be oversight or commercial/tactical.
• It may undermine impartiality, raise doubts about enforceability should the arbitrator interfere with the case presentation.
• Arbitrator should normally leave it to parties to present their cases and evidence.
• Arbitrator should rely on legal representation if the parties have any.
• If the arbitrator feels it essential to decide where decision has not been raised or argued by the parties they should be given the opportunity to address him.
• Deciding an issue in this way will negatively affect outcome of enforcement.

Issues-in practice

• This section analyses points above in further detail and includes practical advice for the arbitrator

Preliminary work

• For the tribunal is required to undertake during the arbitration process and after the hearing before he can start writing the award
• This section provides some guidance on how this may best be achieved.

Defining issues - what why, when and how?

• The first step needed in making a decision is identify what needs to be decided.
• Decisions on matters that are not in dispute may affect entire award being unenforceable
• Arbitrator has the parties' submissions, documents and evidence.
• It is needed to create a list of issues that dispute and require a decision after identifiying agreement.
• Issue identifying is to provide clarity and structure
• The arbitrator should start the preparation of the list as early as possible following receipt of the response
• If possible with the assistance of the parties
• Overall disputes into discrete parts divide, list of issues helps.
• The arbitrator checklist is as he proceeds with award preparations.

Ordering and handling issues

• Arbitrator can ask the parties if they want do provide their own list of what issues are
• This may assist in formulating his final list of the issues
• Some arbitrators provide their own provisional proposed list of issues to the parties as well, so that they can invite their comment or agreements

The issues

• Invariably issues will take the form of questions, from the submissions submitted.
• Consideration and reasoned conclusion is necessary on each issue
• Each issues has to be conducted in sequence, this is to provide him the framework necessary to deal with and decide the dispute

Contentions on the issues

• The arbitrator should briefly summarise each issue, setting out:
• The contentions of the parties this will come from the parties submissions
• Any relevant evidence from witnesses and
• Any further representations made by the parties, for example during an arbitration meeting

Summarising evidence

• Not usually necessary to summarise everything in the parties, submissions
• The parties need to be aware that that the arbitrator has considered their submissions, needs to explaining why.
• An arbitrator should not use old fashioned and/or legalistic styles, legalese takes longer for most to understand.
• Crucial to remember for all read by people, often lay-people will need to accept as a fair determination of the dispute.

Findings of fact

• Set out those facts that are agreed and those that are disputed.
• He should make a finding on the disputed facts and apply those facts in deciding the dispute
• In his findings, the arbitrator may need to state, with reasons, why he prefers one person's factual evidence to another's:
  • For example, his reasons may include:
    • One particular witness is independent of the parties
    • Made contemporary record of what he had seen
    • Good position know what happened
    • Witnesses evidence is supported by other submissions or evidence
• With expert evidence and arbitrator might explain, for example, that:
  • One expert possessed greater practical experience then the expert on the other side
  • His evidence was more consistent
  • He supported his evidence with authorities
• Treat expert evidence as the expression of an honestly held and tenable opinion
• He should not conclude that such evidence is wrong or even given in bad faith, simply because he does not find it persuasive

Conclusions

• In writing the award, identify the findings of fact and apply the law to the facts
• And reach a decision whether a party has proved a particular head of claim
• Relevant facts and applied the relevant law the arbitrator is summarising the position:
  • "the respondent did not state any ground for with holding the sum against the invoice submited to the claimant, therefore there were no justifiable grounds entitling the respondent to deduct from the invoice"
• Will be able to decide is a beach has any of these obligations
• The calculation of any damages or other financial entitlement should set out:
  • What figures are actual figures, coming from the terms of the contract
  • What figures are assessments made by the arbitrator
  • From what date or dates the entitlement runs

Reasoning and Decision-Making

• Reach is point where he can sit at the keyboard and start drafting the award
• Will assist the arbitrator to categorise which evidence is relevant to the questions

Reasons

• Follow a reasoned approach to his award even reason is not to be explain in great detail
• All that is nessecary that what, on their view point did or did not happen explain succinctly why what happened
• Demonstrate to qualified readers that process is in line with their understanding
• At the same time reason is comprehensible of why process is intelligent

Reasoning - the facts

• Reasons is required, brief statements will suffice that arbitrator dealth what has his conclusions is on that those issues be valid
• Traditionally arbitrators have found matters of face and held on matter of law
• Such conventions in an award, but the differentiation may be used

Reasoning - the law

• Factual issues are decided, legal argument is also legal
• Even though the argument must fit that arises of the evidence
• Ascertain to relivant law on topic which may come from statute
• When arbitrators looks at case law, in notes it is point of law in the court with has also not decisions but is commercial too
• Dispence of the issue for that they despend with the need to think

Restrictive distinguishing

• Is where some wide principle is established in a judgment which then evolves firn later judgements
• Examiners several multiple judgements and will need to be equally important
• In such judgement representatives cite very selective portions
• Have inexperienced non-legally trained representatives

Textbooks

• Temptation to always refer textbooks which should be treated with has great caution
• Rely on textbooks without the cases referred to
• Topical matter is of great interest and formulate conclusion, but should be treated carefully

Factual distinguishing

• Take a slight difference in many cases
• Also invite a slight difference, but also for the arbitrator will also assist the position in some degree
• That prudence arbitrator will avoid, in has such manner.

Starting to Write the Award

• Can be writing in such pressure but has pressure to write
• Better has time and write the title page
• Basic underlining underlining facts and the issues which has submissions
• Writer write what it has to identifying the parties
• This first draft can always be amended if more information emerges

Analysing and assessing evidence

• As early find the arbitrator should analyze what findings should be made.
• The arbitrator summarizes what each part says and find the summary in disputed issues
• Party is assessed in cases for an obligations is in issue, so evidence should include the contract

Analysing and assessing evidence is helpful to:

• Contract, a refrence of a party
• Amendments or changes that contract
• What a party is doing an is doing their fact
• Other documentary that evidence
• Meeting is essential to make a note of evidence and the memory accords
• Heard that analyse has that reading with then should evidence