The Private Arbitration Process

Private arbitration is the involvement of a neutral third-party to adjudicate a binding resolution in a dispute between two parties. The arbitration process begins with negotiation between the two parties; the dispute is either based on a breach or violation; or will implement arbitration as a method of resolution to an existing dispute. Pre-dispute arbitration is agreed upon before any violation occurs, and is often found as a clause in contracts, whereby any breaching party will be obligated to private arbitration, (Frey, M., p. 230). Post-dispute arbitration agreements occur when the disputing parties have agreed to arbitration; post-dispute arbitration allows a faster resolution than litigation, therefore, it may be sought after by parties seeking a timely resolution. Arbitration is a private process unlike litigation, therefore it may be more favorable in corporate cases, should its case be arbitrable. A case’s arbitrability considers whether the dispute is even able to be arbitrated; the specific characteristics of a case’s arbitrability are designated as either substantive or procedural, (Frey, M., p. 237). Procedural arbitrability focuses on timeliness and specificity, whereas substantive looks at the intent of the parties who enter their dispute into arbitration, (Frey, M., p. 237).

        Scripture supports the action of arbitration; for those willing to dispute, rather than take the moral path of partnership with the Lord, are declared as wrongdoers; God produces the ultimate judgment, consistently offering us abundance, (Ephesians 3:20). As 1 Corinthians mirrors the same principle of basing conflict on faith, “[b]ut instead, one believer sues another—right in front of unbelievers! Even to have such lawsuits with one another is a defeat for you. Why not just accept the injustice and leave it at that? Why not let yourselves be cheated? Instead, you yourselves are the ones who do wrong and cheat even your fellow believers, (1 Corinthians 6:6-8; NLT). Rather than let ourselves be cheated through creating further grievances to settle a dispute between two parties, we must first consider whether our position is self-righteous; or in defense of God's Image. By striving to bring the Lord's Kingdom to Earth we can ensure a consistently balanced civilized society when civil conflicts arise.

Initiating the Process

        The arbitration process is initiated by “[t]he party filing the claim submits documents to the agreed-upon arbitrator, arbitration panel, or arbitration service stating the dispute to be resolved,” (Frey, M., p. 231). The party that instigates the claim is known as the claimant, whereas the responding party is known as the respondent. The responding party may respond in a variety of ways, by admitting or denying the claim, asserting affirmative defenses, submitting a counterclaim, or adding other parties to the dispute, (Frey, M., p. 231). The arbitration process is dependent on the severity of the dispute, its factors of influence, and the parties involved. As it seldom follows a standardized methodology, the next step is to negotiate the rules that will be used during the arbitration process and its hearing.

Negotiating the Rules

        Negotiation presupposes the arbitration hearing; should the respondent fail to participate in the negotiated arbitration, a default award may be issued to the claimant; yet this award can be vacated should the court observe a lack of proper notice given to the respondent, (Frey, M., p. 232). Oftentimes attempts at negotiation may have occurred prior to arbitration, yet it remains important to establish the rules and begin the prehearing activities. The prehearing activities include selecting an arbitrator; exchanging information; setting a time and location; preparing for the hearing; the arbitration hearing itself, and the arbitration award. 

Selecting the Arbitrator

        Whether arbitrator or arbitration panel; the number of arbitrators varies between cases; this typically ranges between one and three arbitrators, (Frey, M., p. 232). The parties must agree on an arbitrator from a list; if a panel is used, each party chooses an arbitrator and then the two arbitrators choose the third panelist, (Frey, M., p. 232). As the author discloses, in some instances, the parties may be offered a biographical sketch of each candidate to select an appropriate arbitrator.

Exchanging Information Before the Hearing

        Private arbitration does not require full disclosure between parties; the particular information exchanged before the hearing is dependent on the specific agreed-upon rules of arbitration previously established during negotiation, (Frey, M., p. 232). Martin Frey denotes that “[t]he best method for [the] parties to obtain information, however, is to issue subpoenas requiring third parties to bring documents to the arbitration hearing or to testify at the proceeding,” (Frey, M., p. 233).

Setting a Time and Location for the Hearing

        Next, the parties must designate a time and location for the arbitration hearing to occur. This includes coordinating availability with their attorneys; the arbitrator, or arbitration panel; key witnesses; and those in possession of necessary documents; while allowing for enough time for each party involved to prepare documentation for each case accordingly, (Frey, M., p. 233). The arbitration hearing is a much quicker process than litigation; an incentive for the busy litigator, arbitrator, and additional witnesses. This requires compromise, as the convergence of parties is essential to conducting a properly adjudicated arbitration. 

Preparing for Arbitration

        The brevity of private arbitration also highlights the importance of concentrating their grievances to a single position, eliminating unnecessary information that can impede an effective and impartial ruling. Depending on the case’s complexity, the depth and intensity of preparation varies; “[p]reparing for an arbitration hearing requires the claimant’s attorney to select the theory of the case, determine the significant issues, research the applicable law, and gather and arrange evidence for presentation,” (Frey, M., p. 233). Private arbitration can take on many forms; yet no matter the rules agreed-upon, nor the neutral party selected to adjudicate a decision through private arbitration, the preparation for arbitration stands as one of the most important aspects of the entire process. Private arbitration is mandated by God to anyone unable to solve their own conflicts, Scripture reminds us that those willing to dispute with their brethren are liable to judgment, (Matthew 5:22).

The Arbitration Hearing

        Finally, the arbitration hearing commences; utilizing everything the parties have assembled in preparation, the process begins. In summary, the arbitration hearing starts with opening remarks, alongside the presentation of the case; and concludes with the arbitrator’s (or panel’s) award, (Frey, M., p. 234). The arbitration hearing begins by first summarizing the agreed-upon procedures. The parties begin by stating their positions, starting with the claimant’s attorneys. If a client is representing themselves as allowed by statute 28 U.S.C. § 1654, they may provide their own opening statement, placing their own views of the position, (LII). Next, the claimant’s attorneys examine witnesses, evidence, and documents to support their claims. Following this, the respondent’s attorney can cross-examine the claimant’s witnesses, while introducing their own documents, evidence and witnesses in support. This hearing concludes with closing arguments, thereby issuing an award to the winning party. In some instances, the losing party must additionally pay the court costs, (Frey, M., p. 235).

        In Final Offer Arbitration, also known as baseball arbitration, the arbitrated adjudicates one of the parties’ final offers; rather than implementing a judgment of their own beyond that of the parties’ requests. Baseball arbitration allows the parties to maintain [some form of] control over the resolution, whereby the arbitrator considers each parties’ position as a resolution, instead of being used in the typical method limited to evidence, witnesses' testimony, and documentation.

 The Arbitrator’s Award

        The arbitrator's award is legally binding, and cannot be contested. The award is distributed by the arbitrator to each party without reason or explanation to support its adjudication. The panel or single arbitrator can issue a default award after the claimant’s presentation, should they declare it. A default award holds the same conditions as “an award issued after a hearing in which the respondent participated,” (Frey, M., p 232). Although the award holds binding legal precedence, there exist opportunities for an appeal, should any provable violative behavior have occurred during the arbitration process.

Appeal of the Award

        There are seldom opportunities for an appeal the award issued by the arbitrator; these decisions are final. These very limited circumstances include adjudications whereby the agreement was enforceable; breached; fraudulent; applied under duress; violated the agreed-upon procedures; or, should a party be denied impartiality; or facing an issue that exceeds the issue’s statute of limitations; (Frey, M., p. 232).

Conclusion

Private arbitration relies on impartiality, as the third party cannot hold biased appeals toward or against the interests of either party in dispute. Instead, a final binding judgment is rendered that under normal circumstances cannot be contested; similarly, the arbitrator should not be intimidated by either party, for it is decreed by the Lord that the judge of disputes go without influence. The Old Testament points to the New Covenant, displaying love in impartiality; Deuteronomy writes that, “[y]ou shall not be partial in judgment. You shall hear the small and the great alike. You shall not be intimidated by anyone, for the judgment is God’s. And the case that is too hard for you, you shall bring to me, and I will hear it.’ And I commanded you at that time all the things that you should do,” (Deuteronomy 1:17-18; ESV). Arbitration may be useful in disputes that parties are unable to solve through bilateral action; yet it requires the composure and consistent professional dignity of all parties involved to reach an impartial adjudication, allowing for divine justice to prevail, bringing the courts closer to His Kingdom; on Earth as it is in Heaven. Despite the depravity of our disputes, we must remember the object truths that bind the fibers of reality; when it comes to fallen confrontation, sometimes it takes an arbitrator ordained by the influence of the Courts of Heaven to adjudicate worldly justice. The resistance of partiality, denoting the renewing of minds that can center on the actions of Christ; applies not just to individuals, but to the field of jurisprudence; the courts; and the awarded party chosen by the neutral third-party individual (or panel) during private arbitration, (Romans 12:2).

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Bibliography

Ephesians 3:20

ESV. Deuteronomy 1:17-18; ESV

Frey, Martin A. (2003). Alternative Methods of Dispute Resolution. Cengage Textbook. Kindle Edition.

Law. (Accessed on November 29^th, 2023). pro se | Wex | US Law | LII / Legal Information Institute. https://www.law.cornell.edu/wex/pro_se

Matthew 5:22

NLT. 1 Corinthians 6:6-8

Romans 12:2