In an arbitration case, the arbitrator issues a final, binding decision that determines how the dispute is resolved. To reach this decision, the arbitrator must carefully deliberate after analyzing the merits of each side’s case. But what process does the arbitrator go through to reach this decision, and what standards must they follow? In this article, we’ll explore the role of the arbitrator in detail, how neutrality and ethics guide their work, and how arbitrators deliberate and reach a decision.
What is an Arbitrator’s Role?
The role of an arbitrator is to conduct an arbitration hearing, if a hearing is held under the parties’ agreement and applicable arbitration rules. The arbitrator then reviews each side’s arguments and evidence, carefully considers the case, and issues a final award. The arbitrator has a role similar to that of a judge in litigation, in that they both act as a neutral party who issues a binding decision to resolve a dispute.
The arbitrator cannot offer legal advice to the parties or show partiality or bias towards one side during the arbitration process. The arbitrator maintains their neutrality during the proceedings — arbitrators commonly avoid banter, non-procedural discussion, or other interactions with the parties or counsel to avoid raising potential concerns over their impartiality.
The arbitrator also maintains order in the hearing room by addressing rude or disruptive behavior, minimizing delay tactics, and helping parties avoid getting sidetracked. The arbitrator’s ability to maintain focused proceedings and adhere to a formal schedule is important and can help to keep the arbitration process efficient and cost-effective.
One Arbitrator vs. Three Arbitrators
Although many arbitrations have only one arbitrator, some may have a tribunal of three arbitrators, depending on the administering organization’s rules, the contract language, and applicable laws.
Arbitrator tribunals may be used for high-stakes cases or when parties seek the shared perspective of multiple arbitrators. Three-member panels also are considered for complex disputes where different expertise is needed based on the issues involved in the dispute. Three arbitrators are also sometimes preferred because a decision isn’t based solely on one person’s judgment and may therefore be perceived as helping to limit bias.
Neutrality in Arbitration
The arbitrator acts as a neutral decision-maker throughout the proceedings. The arbitrator’s neutrality is key to a fair arbitration proceeding. Arbitrators generally follow ethical guidelines set by the administering organization and relevant laws, typically including a commitment to fairness, impartiality, and transparency. Arbitrators who work with an established administering organization, such as the American Arbitration Association ® (AAA®), must maintain high ethical and professional standards and have advanced training to that end.
Arbitrations generally have safeguards in place, such as disclosure requirements and procedures for addressing potential conflicts of interest, that help support the arbitrator’s neutrality throughout the process. Arbitrators are expected to be unbiased and not favor either side, to address any relevant questions around their impartiality, and to give each side a fair opportunity to present their case.
The Arbitrator’s Decision-Making Process
Conducting the Arbitration Hearing
For those arbitration cases that have a hearing, the arbitrator maintains order, manages the schedule, and allows each side to present their case. They also act much like a judge in that they decide if certain questions or documents are permitted, accept or reject evidence, and direct the proceedings. The arbitrator may question legal counsel or witnesses, keep the parties focused on the most critical issues, or request additional documentation or briefs after the hearing concludes. Through this active role in the process, the arbitrator makes sure they have the key facts of the case and all the information they need. Being thorough during this step plays an important role in their ability to make an informed decision.
Reviewing the Evidence and Arguments
After the hearing, the arbitrator reviews the testimony, evidence, and arguments for the case. Through their professional and legal judgment, they determine which side’s position holds the most merit.
At this stage, in most circumstances the parties do not communicate with the arbitrator, unless the arbitrator needs further clarification on an issue and allows the parties to provide additional information. The arbitrator independently reviews the case and deliberates before reaching a final decision. Ultimately, the arbitrator is reviewing all facets of the case to determine which claims a party has sufficiently proven and which claims do not hold up under careful examination of the evidence and the law.
Applying the Relevant Law to the Facts
After reviewing each side’s evidence and argument thoroughly, the arbitrator applies the relevant contract language, applicable laws, and practice area rules of the administering organization, if relevant, to the proven facts. This may require interpreting contractual language, resolving questions about how specific provisions apply, and determining which legal standards govern the dispute.
Reaching and Issuing the Award
After careful deliberation, the arbitrator makes a final decision on which side has merit and issues a binding award. In reaching their decision, the arbitrator aims to uphold standards of fairness and acts without bias.
How Long Does It Take for Arbitrators to Make a Decision?
The governing rules of the administering organization often specify the deadline for the arbitrator’s decision. For many standard practice area rules at the AAA, the arbitrator has 30 days after the hearing is formally closed to issue an award. If post-hearing briefs or other submissions are permitted, the hearing may remain open until those materials have been received and the record is complete. Specific rules governing the timeline for a decision can vary based on the contract terms or other circumstances.
Is an Arbitrator’s Decision Final?
Yes, generally, the arbitrator’s decision is final and binding. The finality of the arbitration award is one reason arbitration proceedings typically resolve more quickly than court cases. Unless an appellate arbitration process has been written into the parties’ arbitration clause, the arbitration award typically resolves the dispute, and no further recourse within the arbitration, other than possibly a limited motion to modify, is available. A party may petition a court to vacate an arbitration award based on allegations of fraud, bias, or other limited grounds as set forth in the applicable arbitration statute, but vacatur is rarely granted.
What to Consider When Choosing an Arbitrator
When choosing an arbitrator, it’s important to determine if their background and experience are a good fit for the dispute. When contract or relevant practice area rules allow for arbitrator selection, parties typically seek an arbitrator with experience deciding similar cases or who has knowledge or credentials in the specific area or niche at issue in the case. Parties typically prefer arbitrators with a strong reputation and extensive legal or industry knowledge, such as experienced attorneys, former judges, or senior executives.
At the AAA, every arbitrator on our industry panels has extensive training, a minimum of 10-15 years of senior-level experience, and a commitment and reputation for neutrality and high ethical standards. Whether in a B2B, construction, healthcare, labor, or other arbitration dispute, parties trust arbitrators on our roster to provide a fair, efficient arbitration process. Learn more about our extensive roster of arbitrators and our track record for successful dispute resolution: