Lack of unanimity among arbitrators on the dispositive findings/conclusions in writing the Award - What are your thoughts?

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When a three-member tribunal agrees on some but not all issues, what are the possible approaches of the arbitrators writing the Award? What is preferable? How should the Award deal with a dissenting arbitrator? Should the dissenting arbitrator sign the Award but issue a short statement of what is not agreed to? Or, should the dissenting arbitrator not sign the Award and write a dissenting opinion?

Please provide your thoughts/comments below.

Thank you to Steve Skulnik and Dana MacGrath for providing this week's question from a recent program that they spoke at.

8 Comments

Hopefully, any disagreement in on lesser not major issues in the case. An arbitral opinion is not a court opinion where a dissent provides direction for a future court which may wish to use the dissent as new precedent, e.g., Supreme court dissents are read as closely as majority opinions and can predict where the law will go next. The panel should work very hard to reach concurrence. Sometimes matters of pride and ego obstruct consensus. If so, the majority members of the panel need really fine people skills. I believe in fine and tight reasoning, so if there is a dissent, I believe it should be explained. Again, hopefully, only a lesser issue is dissented and a few sentences of explanation would be just fine. -Judith

In a reasoned award, it seems to me that when one arbitrator's dissention is made part of the award, it could provide arguments for the losing party to challenge the award. In a regular award where all that is asked for is a short description of who pays whom what, a dissention might be inappropriate.

Having been a member of a panel in which the arbitrators came to fundamentally different conclusions based on a complicated set of facts, somewhat ambiguous documents, and extensive witness testimony, the panel agreed that the two non-chair arbitrators would each write their respective award and the chair would review both to determine whether he agreed with one or the other, or if there was some middle ground that would form the basis of a compromise. The chair embraced the conclusions of one draft but agreed that it would be necessary to address certain of the factual issues and witness credibility issues in order to finalize the award. The final award was rewritten several times, with opportunities for all three members of the panel to provide comments and suggestions. In the end, the final award took into account mitigating factors that the dissenting arbitrator's draft had highlighted. Given the arbitrators' differing perceptions regarding the credibility of certain of the witnesses, the arbitrators spent time reaching a consensus on what evidence was the most relevant to the ultimate decision. In the end, the process was quite collaborative, with all of the arbitrators satisfied that a just result had been reached, with the minority views accounted for in the final award. All three arbitrators signed the award.

This is a very interesting topic as this issue has manifested in many ways. Sometime the three arbitrators agree on the issues and on the remedies. Even with this agreement, I have had many instances, especially when the arbitrators are advocates, where following the deliberations, one of the arbitrators requests the Chair to issue the arbitration award with the majority of the panel. In this case, one of the arbitrators does not sign the award as a signal of his or her dissent. In other cases, the dissenting arbitrator just signs the Award writing next to the signature the words: I dissent. In other cases, the dissenting arbitrator writes a short statement or a lengthy opinion spelling out in details the reason for the dissent. This document is usually attached to the final award. Yet in other cases, the dissenting arbitrator abstains from writing a dissenting opinion or statement for lack of valid arguments to justify the dissent, because of the mere fact that he was appointed by one of the parties and believes that his dissent is a expected. When the agreement is “partial” the award should state that fact the three members of the tribunal should sign the Award.
As a general observation, I have seen more dissent in ad hoc arbitrations where the arbitrators acted as advocates. Dissent is less frequent, at least, in my experience, when the panel is composed of three neutrals.

I agree with the comments that have been published here, especially that dissent is far more likely when the wings are party-appointed. A party appointed wing has a great deal of difficulty, from a realistic perspective, joining an Award that is a major defeat for the party that appointed that arbitrator, unless the evidence is beyond question. The Chair should always diligently try to find a compromise when a dissent is on the horizon.

One avenue that I have seen successfully utilized is to have the objecting wing arbitrator footnote the majority opinion by specifically pointing out those points where there is disagreement. Thus, instead of a separate dissent, the issues are documented in footnotes and the wing can sign the Award with a notation that they have articulated their separate position in footnotes. This could equally apply to the quantum.

What is the purpose of a dissent? It tells the non-prevailing party that someone on the panel heard the arguments made and found them persuasive. For many, knowing that their views were given serious consideration is valuable. Some, see above, are concerned that a written dissent may serve as grounds for vacating the award. If the dissent is thoughtful and focused on the merits of the arguments being discussed, there is zero chance the discussion will facilitate vacating. Rulings on the merits do not fall within the scope of the FAA 10(a). At worst, the foundation for the majority view might be shown to be wrong. But being wrong is not grounds to vacate.

What about the expense associated with the writing of a dissenting opinion? Some may feel the expense isn't justified because it serves no legal purpose. But perhaps that view is short sighted. If parties agree on a panel of three, why shouldn't the agreement be seen to accommodate an expression of the views of all the people on the panel? Is it unfair for all parties to know how everyone on a panel felt about the factual and legal merits of the case?

A dissent on the merits is one thing. A dissent suggesting the majority acted in violation of any of the grounds set out in FAA 10(a) is very likely going to facilitate vacating of an award. An arbitrator has no business advising parties on grounds to vacate. That's something for the parties and their counsel to determine on their own. For example, there is no need for a dissent that states the majority have exceeded their authority. The actions of the majority speak for themselves. So great care has to be taken not to include this type of statement in a dissent.

Finally, should a dissent include a claim that another arbitrator acted unethically while participating in the case from beginning to end? My view is that this is an issue for the AAA to resolve beyond the view of the parties.

Implicit in the positing of this issue is the notion that a unanimous award is preferable to a divided one. Over the years, I've heard this view from several arbitrators I respect. But, although agreement feels better than disagreement, a respectful dissent doesn't trouble me any more than dissents by appellate judges. Divergence of opinion is inherent in our legal system.
I have divined two bases for the no-dissent sentiment. One, if the dissenter is party-appointed and opines in favor of that party, the dissent mars the appearance of neutrality. Given the high percentage of awards that are unanimous, a few dissents do not a serious blemish make. (If we're really worried about neutrality of party-appointed folks, we should eliminate party appointments. But AAA, CPR, JAMS, and others won't do so as long as their customers keep saying they prefer the ability unilaterally to pick one member of the panel.) Two, a dissent may provide support for vacatur. At the risk of seeming flippant, I say so what. Perhaps the panel majority really blew it. More importantly, dissent from conclusions of law- or fact-findings does not augur vacatur, given the narrow scope of judicial review.
So, as panel members, we should make reasonable efforts to agree on the outcome and reasoning for an award, since at least two must agree for the award to be effective. And, we should listen to each other with an open mind. But the arbitration world will easily survive if we cannot bring a wayward maverick into the corral. He or she has the right to stray.

As other commenters have written, the panel should work hard to accommodate all perspectives. To the extent there is a reasoned opinion, it should acknowledge another perspective and then work hard to rebut it. If the dissenter feels that the final draft does not go far enough to explain her perspective or to rebut it constructively, she could express her concerns in a footnote in the reasoned opinion. In certain circumstances, there might be a need for a formal dissent, but a well-written reasoned opinion that deals with all perspectives should be sufficient. It is incumbent on the panel chair to manage this process and for all three panelists to work collaboratively. Ideally, they can reach consensus, but that is not always possible, particularly with a party-appointed arbitrator.

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This page contains a single entry by Jeffrey Zaino published on June 9, 2022 11:24 AM.

Quantum issues in the Award - What are your thoughts? was the previous entry in this blog.

Feliu Case Summaries June 2022 is the next entry in this blog.

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