Arbitration: Procedural History & Methods

• Procedural history is a vital part of an Award.
• Awards should comply with domestic law on enforcement in domestic arbitration.
• Awards should comply with Articles II and V of the New York Convention in international arbitration.
• Article II concerns the the validity of the Arbitration clause.
• Article V parts b, d, and arguably e relate to the arbitration process.
• Arbitrators should write a full procedural history to avoid questions about procedural propriety and due process.

Agreed-Disputed Method

• In English Court cases, claimants typically present their claims in numbered paragraphs.
• Respondents then state whether they agree or disagree with each paragraph.
• Counter-claims are presented and answered similarly.
• Arbitrators should encourage this organized method, especially in lower value cases or when time is critical
• Internationally, statements of claim, defence, counterclaim, or reply can be complex and unhelpful.
• Identifying issues in dispute is a critical skill for arbitrators.
• The agreed-disputed method is commonly used to identify issues in dispute.
• Two lists are created: one for agreed matters and one for disputed matters.
• The disputed matters are grouped logically under headings reflecting the questions to be answered which become the "Issues in Dispute".
• The "Issues in Dispute" are later determined using the FLAC method.
• Issues in dispute aren't necessarily the claims, and can usually be distilled down to fewer matters.

Agreed-Disputed Method Example

• In this method, the arbitrator separates facts into those agreed upon by the parties versus those disputed.
• This helps the arbitrator reach a logical conclusion, identifying the key issues for resolution.
• The key issues to be decided are:
• Were the laptops and manuals fit for purpose?
• Was the Respondent right to seek replacements?
• Both parties agree on a contract signed March 1, 2018, for 200 laptops at W£20,000 paid in two installments.
• The first installment of W£10,000 was paid on signing the contract.
• The laptops were received on March 30, 2018, however the second payment was not made.
• 50 laptops were unable to be turned on, the Respondent sourced 50 alternative laptops for W£10,000.
• On April 16, 2018, the respondent stated 50 laptops were defective, demanding W£15,000 in refund and damages.
• Claimant sent notice for arbitration to the Centre which the Respondent then received.
• The claimant states the 50 laptops in question had a surge protection button that had to be depressed prior to turning on the laptops.
• The claimant provided manuals, with the contract noting the existence of online manuals

Issues in question

• The claimant stated the 50 laptops are an older model and an agreement was previously made by Mr Ishmael and Ms Evans that 150 laptops would be purchased, and 50 older laptops were free.
• The respondent does not dispute the existence or use of the button, but disputes that they knew prior to the Notice for Arbitration.
• The respondent disputes that the manuals correctly identified the surge button.
• Respondent claims the laptops were not fit for purpose, or in the alternative manuals were not fit for purpose, but the claimant disputes this.
• Claimant states the Respondent had prior knowledge of the surge button and had the respondent contacted them or read the manual this would have been apparent.
• The respondent states that the claimant providing goods not fit for purpose breached the contract.
• The claimant states that the respondent refusing/neglecting to pay the second installment of the contract amounts to them breaching the contact.
• The claimant also seeks damages of W£5,000 for the defective laptops and W£10,000 in damages.
• The claimant refutes these claims saying that neither the laptops nor the manuals were defective.
• Here the Issues between the parties are:
• Fitness for Purpose - Party who breached the contract.
• Replacement Laptops - Whether the Respondent was correct to replace the laptops.

The FLAC Method

• After listing issues in dispute, analysis begins.
• FLAC is an acronym for Facts, Law, Analysis, and Conclusion.
• When analysing an issue the arbitrator should start with facts, then the relevant law, provide an analysis and come to a conclusion.
• Adhering to the FLAC method will ensure the arbitrator does not miss or overstep the scope of the arbitration clause.