The Importance of the Preliminary Conference in Commercial Arbitration: Proactively Ensuring the Experience of the Proceeding

NAM (National Arbitration and Mediation)

New York Law Journal Alternative Dispute Resolution (ADR) Special Report

Expediency and economy are the great benefits of the arbitral process. One of its most important components is the initial or preliminary conference with an arbitrator whether it is a tri-panel or party arbitration. Advance communication between counsel and an initiative-taking arbitrator are essential for achieving the goal of a fair, efficient, and economical resolution of the dispute.

The arbitrator, upon his appointment, should issue a written directive in advance of the initial conference. This should set forth an agenda to be discussed. It should encourage counsel to engage in a collaborative process from the outset for the purpose of streamlining the proceedings. This will be affected by the type of case and its complexity. No one can anticipate all the issues that should be addressed at the initial conference, however both the arbitrator and counsel should do their best to do so. The arbitrator may always defer issues and address them at a later stage of the proceeding.

The following should be addressed in the preliminary conference directive or in its absence, counsel should take the initiative to discuss the issues below:

  • which rules will govern the arbitration process? In most cases the parties will select an ADR provider to administer the process. In doing so, they often stipulate that they will be bound by the provider's rules. The parties are always free to modify these rules and/or select a separate set of rules. If the ADR provider's rules apply, they should review them carefully in advance of the initial conference. (In this author's experience, all too often counsel will fail to do so to their detriment.)  In the absence of an arbitration clause or contractual provision, an ADR provider's rules often give the arbitrator the power to award fees, costs, and interest to the prevailing party. Under certain circumstances, there may be rules that allow the arbitrator to preclude certain evidence or testimony at the time of the arbitration. These and other rules may not be acceptable to the parties, and they should be considered in advance of the initial conference. Again, the parties may modify the provider's rules by agreement or substitute the ADR provider's rules in its entirety;
  • any measures that should be taken to protect confidential information to be exchanged or disclosed;
  • a schedule for the exchange of information and documents;
  • a schedule for and the number of depositions, if required;
  • a schedule for the exchange of expert information;
  • a schedule for preliminary applications and/or dispositive motions. The arbitrator may require a letter of application in advance of making any motions;
  • an estimate of the number of witnesses and the number of days needed for the evidentiary hearing;
  • a proposed range of dates for the evidentiary hearing; and
  • whether the parties intend to have a court reporter present for all or part of the proceedings. There are instances where one party wishes to have a court reporter and the other does not. If that is the case, there is no obligation to share the transcriptions unless payment is shared.

Since further proceedings will be scheduled during the conference (including the final hearing), all parties including the client(s) or any witness(es) should make their availability known to counsel.

In advance of the preliminary conference, the parties should communicate in writing:

  • the issues upon which the parties agree;
  • the reasons for any disagreement between the parties concerning such issues; and
  • any other issues that counsel would like to address.

Many commercial arbitrations are being conducted in whole or in part virtually. This raises critical issues. The arbitrator should require, or independently the parties should agree to be bound by the following statements in advance of the preliminary conference.

  • All parties consent to participate via an internet-based video conference platform provided by the ADR provider, absent an express agreement to do otherwise which is approved of, in advance, by the arbitrator.
  • No one shall record any portion of any conference or hearing via audio, video, stenographic transcription or by any other means, absent an express agreement to do so which is approved of, in advance, by the arbitrator.
  • Counsel, client(s), and witness(es) will appear at one location, absent an express agreement to do otherwise which is approved of, in advance, by the arbitrator.
  • No one will be able to hear or observe the virtual proceeding other than the participants who can be seen. In the event any party wishes for an additional person(s) to participate in the video conference, who cannot be seen, they must disclose the identity of the additional person(s). All parties, including the arbitrator, must consent to their presence.
  • The parties will use, inter alia, a link, meeting I.D. and password provided by the ADR provider that will be required for entry into the video conference. The parties agree that, inter alia, the link, meeting I.D., and password will be kept secure and accessible only to the participants in the proceeding. In the event that the parties choose a platform other than the ADR provider's, they will still be bound by the same agreement set forth in this statement.
  • The parties will use a secure Wi-Fi/Ethernet connection to participate in the proceeding.
  • Counsel has fully informed their client(s) and any other participant(s) of all the terms of this agreement and that they have agreed to be bound by same.

It is impossible to anticipate all the issues that should be discussed at the initial conference. However, the above represents items that are common to all cases. When the arbitrator and counsel are proactive from the outset, it will ensure a more expedient process that maximizes the many benefits that arbitration has to offer.

Reprinted with permission from the November 22, 2021 issue of The New York Law Journal © 2021 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.

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NAM (National Arbitration and Mediation)
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