ACR-GNY - Multi-Party and Multi-Contract Arbitration Disputes

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Multi-Party and Multi-Contract Arbitration Disputes
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Multi-Party and Multi-Contract Arbitration Disputes

Thursday, May 22, 2025 10:57 AM | Anonymous

Multiple Project and Contract Types ...

What are the major pitfalls with respect to handling multi-party and multi-contract arbitration disputes? What are the best practices for a Tribunal facing these type of disputes? What should the Tribunal and parties avoid doing?

What are your thoughts?

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Thursday, May 22, 2025 5:00 PM | Eric Wiechmann

One of the first things to check are the arbitration clauses in each contract. Are they the same. Do they have a different scope of matters covered, apply different rules, different arbitrator selection process, different damage limitations. Are different parties involved in the differing contracts? Some may not have an arbitration clause? It is vital that the Tribunal gets the parties to agree as to what clause will apply, what rules will be used and specifically which issues the Tribunal has authority to decide. The Tribunal should send out questions addressing these issues in its agenda for the Pre-hearing management conference.

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- Sunday, June 01, 2025 1:43 PM | Stanley Zamor
  
  Great comments. I have often found that when I have sat on panels the contract(s) have had contradictory clauses. Some contracts use an obvious boilerplate form and therefore ambiguous. While others have thoughtful and detailed clauses that are extremely technical.
  
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Thursday, May 22, 2025 5:20 PM | Julia E Sullivan

CIARB has some helpful guidelines on multi-party arbitration, addressing issues such as joinder, concurrent hearings, and the tribunal's authority to exclude a party. Here is a link: https://www.ciarb.org/media/ynlbq2ar/guideline-17-on-multiparty-arbitration.pdf

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Thursday, May 22, 2025 5:42 PM | Kent Sinclair

Multi-party/multi-contract arbitrations can quickly become unwieldy, with overlapping claims, inconsistent defenses, jurisdictional quagmares, and procedural drift. Early segmentation - by phase (e.g., jurisdiction, liability, damages), by party, or contract grouping - can bring order and efficiency. Tight, strictly enforced deadlines are important to keep momentum and discourage procedural gamesmanship. Tribunals can also borrow from recent innovations in mass consumer arbitration practices, like bellwether cases or procedural batching, to manage complexity while maintaining fairness. A well-structured, segmented approach can be key to keeping the case moving without fairness.

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Thursday, May 22, 2025 7:30 PM | Mark Kantor

The constitution of the tribunal in a multiparty arbitration can be a problem if two or more of the parties on one side of the dispute are affiliated and the arbitration agreement provides that each party appoints an arbitrator. The result can be a tribunal that leans towards that side, a chair that is de facto appointed by the arbitrators from that side, and/or an even number of arbitrators creating the potential for deadlock on the tribunal. The ICDR's rules, like most other well-known international arbitration rules, solve this problem by allowing the institution to select the entire tribunal in such circumstances:

"13.5. If there are more than two parties to the arbitration, the Administrator may appoint all arbitrators unless the parties have agreed otherwise no later than 45 days after the commencement of the arbitration."

However, the AAA Commercial Arbitration Rules do not have a similar provision, leaving these risks unresolved. I recommend the AAA adopt the international approach in its next revision of the Commercial Rules.

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- Friday, May 23, 2025 10:51 AM | Steven Skulnik
  
  Good idea.
  
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Friday, May 23, 2025 12:01 PM | Tom Bush

Multi-party arbitration can be a problem when the arbitration clauses specify a method for choosing the arbitrators. These methods typically are written with two-party arbitration in mind and might not work with additional parties. For example, in reinsurance contracts, arbitration clauses typically call for each party to appoint an arbitrator and the two party-appointed arbitrators to appoint the umpire. With three or more parties, at least one would lose its individual right to appoint an arbitrator.

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