Powers of the arbitrator: Overview, definition, and example
What are the powers of the arbitrator?
The powers of the arbitrator refer to the authority and responsibilities granted to the arbitrator in the context of resolving a dispute between two or more parties. Arbitration is an alternative to litigation where an independent third party, the arbitrator, makes a binding decision after reviewing the evidence and hearing from both sides. The arbitrator has the power to decide on issues such as the admissibility of evidence, the schedule of proceedings, the application of law, and the final resolution of the dispute. The specific powers of the arbitrator are usually outlined in the arbitration agreement, the governing rules, or the relevant legal framework.
In simpler terms, the powers of the arbitrator are the actions and decisions they are allowed to make during the dispute resolution process.
Why are the powers of the arbitrator important?
The powers of the arbitrator are important because they determine how the dispute resolution process will unfold and what actions the arbitrator can take to ensure a fair, efficient, and final resolution. Having clear and defined powers ensures that the arbitrator can make decisions that are binding on the parties, which can help avoid prolonged disputes or legal challenges. These powers also help maintain fairness by allowing the arbitrator to manage the process and ensure that all parties have the opportunity to present their case.
For SMB owners, understanding the powers of the arbitrator is crucial when entering into arbitration agreements or resolving disputes. Knowing what an arbitrator can and cannot do helps ensure that the process is effective and that the final outcome is enforceable.
Understanding the powers of the arbitrator through an example
Imagine two companies are in a dispute over a contract clause, and they agree to resolve it through arbitration instead of going to court. During the arbitration process, the arbitrator has the power to determine what evidence will be accepted, whether any witnesses will testify, and how the case will proceed. If one of the companies fails to provide necessary documents on time, the arbitrator may have the power to impose penalties or draw conclusions based on the available evidence. Ultimately, the arbitrator will issue a binding decision that both parties must accept.
In this case, the arbitrator's powers allow them to guide the arbitration process, ensure fairness, and provide a final resolution to the dispute.
Example of a powers of the arbitrator clause
Here’s an example of what a "powers of the arbitrator" clause might look like in an arbitration agreement:
“The Arbitrator shall have the power to determine the admissibility of evidence, to issue subpoenas for witness testimony, and to establish deadlines for submissions. The Arbitrator may also issue binding decisions regarding the resolution of the dispute, including remedies such as monetary compensation or specific performance, as deemed appropriate based on the facts and applicable law.”
Conclusion
The powers of the arbitrator are the authority and responsibilities granted to the arbitrator during the arbitration process. These powers ensure that the arbitrator can effectively manage the dispute and provide a binding resolution. For SMB owners, understanding the powers of the arbitrator is essential when entering into arbitration agreements, as it helps clarify what the arbitrator can do to resolve disputes fairly and efficiently. By defining these powers in advance, businesses can ensure a smoother and more predictable arbitration process.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.