One of the most common forms of dispute resolution is arbitration. Through the arbitration process, an arbitrator listens to the disputes between two or more parties. Depending on the specific kind of arbitration, there may or may not be lawyers involved. There may be expert witnesses and even a presentation of physical evidence in many arbitration disputes. After hearing each party present their side of the dispute, the arbitrator then renders her decision, called an arbitration award.
A contract, written and signed long before a dispute arose, will usually dictate the specifics of the arbitration proceeding. For example, it will state whether lawyers can be present and, most importantly, whether the final decision of the arbitrator will be binding. In most cases, the award will hold firm, just like the decision of a courtroom judge. In the alternative, if the contract specifies that the decision is not binding, then the parties do not have to comply with the arbitrator’s decision.
In most cases, the arbitrator has about 30 days to reach her decision on the issues in dispute. As mentioned before, the decision is called the arbitration award. The award can be financial or it can be a matter of halting some form of labor practice, adding some form of employment incentive, or another form of non-financial award.
In a courtroom, a judge must give the parties the reasons behind his decision. In an arbitration proceeding, the arbitrator does not necessarily need to give a list of reasons behind the award. If the arbitrator does give the reasons behind the award, it is called a reasoned award. In the contrary, if no reasons are given to back her decision, it is called an abbreviated award.
Once an arbitration award is made, it is considered final and cannot usually be appealed. There are some exceptions to this rule. For example, if a party won the award using corruption or fraud, if the arbitrator engaged of some form of prejudicial misconduct, or if the arbitrator went beyond the powers stated in the arbitration clause of the contract, the award can be vacated. This means that the arbitration award has no effect – it is like it never happened. In addition, if one of the parties discovers that the arbitrator made an error in calculating a financial award, the award can be modified to compensate for the error.
