The arbitration process

The arbitration process

Although every arbitration is different, there are general steps and procedures that are followed:

1. Starting the arbitration

Any party to an agreement can start an arbitration (usually called the claimant). The claimant will typically send a notice of arbitration (sometimes called a Notice to Request to Arbitrate, or Arbitration Application) to the other party involved in the dispute. Where and how notice is to be given is often covered under the notice terms of the agreement that is being arbitrated.

This notice should contain information such as:

·         the name and address of both parties,

·         a description of the dispute, and

·         what result the person starting the arbitration hopes to obtain.

The person receiving the notice must respond within a certain time period, and must either confirm the accuracy of the information in the notice, or make corrections to it. If an arbitrator has already been agreed upon, the notice must also be sent to the arbitrator.

2. Choosing the arbitrator

An arbitrator must be chosen and agreed upon by all parties. Often, the process for selecting an arbitrator, and the number of arbitrators that will be required, is set out in the document under dispute. If there is no written agreement, the parties can agree on an arbitrator and decide if more than one arbitrator is necessary. If the parties cannot agree upon an arbitrator, the court may appoint one.

3. First meeting

Once an arbitrator is chosen, all parties and the arbitrator usually hold a first meeting. The parties may also retain legal counsel to attend at the arbitration and represent them. The initial meeting, sometimes called a pre-hearing examination, gives the participants a chance to discuss and clarify any outstanding issues regarding the arbitration process, such as:

·         identifying the issues in dispute,

·         determining what form the arbitration will take: that is, an oral hearing, or in writing,

·         the scheduling of all events, including the date and place of the arbitration hearing, and

·         identifying and listing witnesses and any experts that will be called to give evidence.

This meeting could be held in person, by telephone, or by videoconference.

4. Arbitration hearing

If it is determined that the arbitration will be in writing, the arbitrator will examine documents and render a decision. The arbitrator may ask for further documents or explanations with regard to the documents being examined.

Often, the parties will request an arbitration hearing. At the hearing, each party presents their case, evidence is given, and witnesses may be examined. Depending on the complexity of the case and the monetary value at stake, the parties may choose to hire lawyers to represent them at the arbitration.

5. Decision of arbitrator

Once the arbitration has taken place, the arbitrator or panel will make its decision, which is usually final and binding. The decision must be in writing and provided to all parties. The decision must include an explanation of why the decision was made. Among other things, the decision may involve:

·         ordering specific action to be taken, such as having one party make a payment to the other,

·         ordering an injunction against specific actions, such as refraining from selling a product,

·         monetary awards (which may include one party paying the other party’s costs of arbitration, plus interest).

Subject to applicable legislation and any arbitration agreement that may exist between the parties, the decision of an arbitrator may be appealed to a court of law.

6. Fees and costs of arbitration

There are costs to both parties in preparing and participating in an arbitration. The costs include such things as the arbitrator’s fees, the cost of expert witnesses, disbursements and so on. The costs can vary depending on several factors, such as:

·         whether there was an oral hearing requiring the attendance of the arbitrator and fees for the hearing facility, or if the arbitration required only written submissions,

·         if expert witnesses were called,

·         how long the arbitration lasted, and

·         if the arbitrator awarded costs of the arbitration to be paid by only one of the parties.

Generally, fees or a deposit must be paid when a copy of the notice of arbitration and response is sent to the arbitrator.

Is it important to note that there are time frames that exist for all steps in an arbitration, either as set in the Arbitration Act, or as agreed upon by the parties and the arbitrator.