Advocacy in Arbitrations
The given topic suggests that advocacy in arbitration differs from advocacy before a court. The assumption is justified but the differences are subtle. The principles of advocacy, its tactics and strategy, are basically the same in whatever forum the advocate appears. To understand what differences in approach there might be requires an exploration of how the arbitral process differs from litigation.
I take my topic to include all aspects of conducting a case, not just the practical techniques of examining witnesses and crafting submissions.
Most arbitrations in this State are conducted under the auspices of the (Qld) Commercial Arbitration Act 2013. Each State has an almost identical Act and there is, as well, a Commonwealth Act for international arbitrations. Put simply an arbitration is international if the parties to the arbitration agreement conduct their businesses in different countries, or if they do business in the same country but the agreed place of arbitration is in another country, or the place where a substantial part of the contract is to be performed is in another country; or if the parties have agreed that the subject matter of their agreement relates to more than one country. My experience suggests that the day to day conduct of an arbitration does not vary between domestic and international arbitrations.
This is not the time or place to undertake an analysis of the various Acts which would certainly be dreary for everyone. As I said, they are all very similar. All of them mandate a particular approach to arbitrations. Section 1AC of our Act declares that:
“(1) The paramount object of this Act is to facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense.
(2) This Act aims to achieve its paramount object by—
(a) enabling parties to agree about how their commercial disputes are to be resolved (subject to subsection (3) and such safeguards as are necessary in the public interest); and
(b) providing arbitration procedures that enable commercial disputes to be resolved in a cost-effective manner, informally and quickly.
(3) This Act must be interpreted and the functions of an (arbitrator) must be excercised so that… the paramount object … is achieved.
Note the mandatory “must” in sub-section 3. Arbitrators have a statutory obligation to resolve disputes economically, informally and quickly. Sub-section (2) introduces what has been called “proportionality”, allowing parties and the arbitrator to mould procedures in order to determine the case in a manner that is cost effective in relation to the amount in dispute, its complexity, and the capacity of the parties.
Section 19 of the Act provides that the parties can agree upon the procedures by which the arbitrator is to conduct the proceedings. This recognises “party autonomy”, the right of parties to conduct their cases as they wish. There is, however, a substantial limitation on the right. It is subject to “the provisions of th(e) act”, a reference to the paramount objective of economy and efficiency. The agreed procedure must meet the objective.
In the absence of agreement, the arbitrator “may … conduct the arbitration in such a manner as (he) considers appropriate”. This power is also subject to, and must be exercised to achieve, the paramount objective.
Importantly the power extends to determining the admissibility, relevance, materiality and weight of any evidence. This means that arbitrators are not bound by the legal rules of evidence. This has a consequence for advocacy which I will mention later.
Section 18 confers an unusual power on arbitrators. It requires them to give the parties a “reasonable” opportunity of presenting their cases. The requirement is not to allow a “full” opportunity to present a desired case. Arbitrators can interrupt and curtail the presentation of evidence or argument. I have never seen the power exercised. I assume it would occur only when a party was acting oppressively against an opponent or was disregarding its obligation to be concise and efficient. However the section does not confine the circumstances in which arbitrators can limit the number of witnesses or experts, or impose time constraints on their evidence.
You should note that S24B puts an obligation on parties to “do all things necessary for the .. expeditious conduct of … proceedings”.
Section 24 permits arbitral proceedings to be conducted on written materials without hearing oral evidence or oral argument, though if any party requests such a hearing, the arbitrator must accede to it. Obviously where proceedings are conducted entirely on written materials their importance is critical. It is the only chance of persuasion the advocate has.
Importantly s.5 provides that no court may intervene in arbitral proceedings “except where so provided by this Act”. The scope for judicial intervention is very limited: there is no appeal against findings of fact. Appeals on questions of law in an award can be heard by the Supreme Court only if both parties agree, and if the court grants leave. Section 34A(3) advises the court not to grant leave unless the decision of the arbitrators on a question of law is obviously wrong, and the error had an actual, substantial, effect on the rights of one or more of the parties. Apart from that, a court can only interfere if the arbitrator misbehaves, or was not properly appointed, or decides a dispute not referred to arbitration. So arbitrations are meant to be fast, informal and final. Your conduct of the case should reflect that philosophy. You cannot have at the back of your mind that errors can be tidied up on appeal. You only get one shot of having your arguments accepted.
I have mentioned the differences between litigation and arbitrations as mandated by the legislation to give you some idea of how arbitrations are required to proceed so you can adjust the techniques of advocacy accordingly. The combination of sections 1AC, 19 and 24B particularly, results in a substantial departure from the previous philosophy which underlay litigation, the right of parties to conduct the case as they see fit and at the pace that suits them. The Commercial Arbitration Act obliges arbitrators to get on with the job and to actively encourage parties to prepare and prosecute their cases, and to equally actively discourage delay. Arbitral proceedings are compressed and advocacy in them has to adapt to the compression.
Interestingly s.24A provides that the parties to an arbitration may appear in person or by a representative who need not be a legal practitioner. You may find yourself arguing against a layman, though one expert in a particular field.
Arbitrators have only the powers the parties can agree to give them. They do not have coercive powers. They cannot compel the attendance of witnesses or the production of documents. Parties can, however, apply to the Supreme Court for the issue of subpoenas for the production of documents to the arbitrators, or the attendance of witnesses. They must first obtain the permission of the arbitrator to make the application.
Arbitral proceedings are flexible and informal and the parties can choose their own rules. Normally the arbitration clause in a contract which has given rise to the dispute will identify a set of rules which will govern the proceedings. Commonly parties choose rules such as those published by the Resolution Institute (formally IAMA) or the rules of ACICA, the Australian Centre for International Commercial Arbitration. I was once in an arbitration which had no connection with shipping or the United Kingdom but the parties had agreed it should be conducted in accordance with the rules of the London Maritime Arbitrator’s Association. Arbitrations under the auspices of the International Chamber of Commerce (ICC) are quite common. If you are engaged in one, study its rules very carefully. They are proscriptive and elaborate, calling for steps in the proceedings other sets of rules don’t require, and each case is supervised from Hong Kong.
There is no point in going into the details of any particular set of rules. They deal with the same sorts of subject matter that you would expect rules of procedure to cover, and in a broadly similar fashion. The point is that as professional advocates you should make yourself familiar with the particular rules by which the arbitration you are briefed in is to be conducted. Whatever set of rules are applicable they will differ from the UCPR.
One topic the rules do not cover is discovery, or disclosure of documents. You might think discovery has no place in an address on advocacy, but advocacy is about presenting your case and for that you need material. Normally the parties, through their solicitors, agree upon some form of disclosure, and it is usually limited to categories of documents and/or communications between specified persons. The “direct relevance” test of the UCPR does not apply unless the parties agree it should. If documents are required from an opponent or third party and are not produced voluntarily, you will have to have recourse to subpoenas issued by the court. Given that two applications are necessary, first to obtain the arbitrator’s permission and then the court’s order for the issue of the subpoenas, you may have to act expeditiously to get the documents in time. If you are asked to advise on what discovery regime should be agreed to, obviously the aim is to ensure that the categories of documents are likely to produce what is needed.
I mentioned, as one of the attractions of arbitration, the fact that the parties get to choose the arbitrator. Obviously the disputes in which I have been involved have had at least one venerable lawyer as arbitrator, but I once sat with an accountant. In some disputes however, the arbitrators are engineers, architects, valuers, or even builders, sometimes as sole arbitrator and sometimes as one of a panel of three. In such cases a different approach is called for. There is no point in being overly legalistic. This is especially so if you attempt to bamboozle or overbear the arbitrator by a display of your legal knowledge. An intelligent layman will quickly see what is going on and resent it. You should show a lay arbitrator the same respect and courtesy you would show senior counsel or retired judge. If a point of law does have to be raised because the dispute turns upon the meaning of a contractual term, or because there is some proper reason for objecting to evidence, the point should be argued as simply as possible with as little reference to authorities as possible, the object being to clarify things to assist the arbitrator’s understanding of the issues.
Arbitral proceedings are informal both in the actual conduct of the hearing and in the relaxation of rules of procedure. This informality should not lead to any display of disrespect to the arbitrators or familiarity. There may be a temptation, especially if the arbitrator is a layman, to make him your friend, but the temptation should be sternly resisted. You will gain more respect from the arbitrator if you exhibit a proper degree of professional deference.
There is an unavoidable physical closeness between arbitrators and the parties and lawyers. Hearing rooms are small. The absence of court staff means that documents have to be handed to the arbitrator, usually by solicitor or junior counsel. There is no bailiff to open or adjourn proceedings; there is no standing up when the arbitrator enters. He or she will be sitting at a desk when parties and their lawyers straggle in, or the arbitrator will enter the room when everyone else is there. The examination of witnesses and addresses are conducted with the practitioners seated. Nevertheless it is important to preserve a psychological space between advocate and arbitrator. The deference, or psychological space, facilitates good decision making and, I think, most arbitrators would resent a friendship being imposed on them by a party. Such an approach might be seen as an improper attempt to influence the outcome and is likely to be counterproductive.
When I initially thought about preparing this address I intended to be analytical rather than particular, assuming that approach would appeal to an audience of professional advocates. However, early on when speaking about the topic to some junior counsel, I was asked questions which suggested that it might be appropriate to deal with some detail that might seem mundane. I was asked how the arbitrator should be addressed. The problem may appear acute if the arbitrator is a retired judge. Despite natural respect “your Honour” is to be avoided: it is wrong. That particular mode of address is reserved for serving members of the judiciary. Call the arbitrator by name, Mr, or Ms Smith, or Mr (or Ms) Arbitrator. Often there is a panel of three arbitrators (which is a called a Tribunal in the legislation) and if referring to the arbitrators collectively you would use such a phrase as “if the Tribunal pleases” or “does the Tribunal wish to have a view”, or whatever the case might be. If an individual arbitrator asks a question he or she should be answered by name.
A substantial difference between arbitration and litigation is that arbitrated disputes often arise in the context of an on-going commercial relationship which both parties wish to preserve. Litigation, by contrast, is usually an exercise in pathology where the parties are engaged in working out why the relationship died and allocating fault. Advocacy can take on a sharp edge in that context which will have no place in finding the answer to a dispute between parties who may wish to use each other’s services in the future, or are bound together in a contract of long duration. The conduct of such an arbitration must value civility over forensic point scoring in order to maintain rather than destroy the business relationship. I don’t mean to say that you should not present your case forcefully but I think you should do so in a manner that avoids personal attacks. On occasions even these may be necessary, for example when a witness may be lying on an important point.
Most disagreements which go to arbitration commence with a Notice of Dispute, or a Referral to arbitration and there is usually a response, which may be called by different names. These two documents summarise the rival contentions in the case. They are the first documents the arbitrator will see, so advocacy in promoting the parties’ cause should begin with the drafting of the Notice and the Response. I don’t suggest that you treat these documents as final submissions, but they are the first chance to articulate a client’s case persuasively, succinctly and clearly. You should take advantage of it.
The same is true where the rules under which the arbitration is conducted, or the parties agree, that there should be an exchange of pleadings by whatever named called. The elaborate and prescriptive provisions of the UCP Rules do not apply. Typically the rules of the arbitration organisations provide that a statement of claim should include:
· the identification of the parties
· a statement of the facts supporting the claim
· the points in issue
· the relief or remedy sought
· the legal grounds or arguments supporting the claim
The defence is required to respond with particularity to the contentions in the statement of claim.
It is common, though not universal, for the statement of claim to have attached to it copies of the contract from which the dispute has arisen and, as well, “all documents and other evidence relied upon by the claimant”. The same obligation is imposed on the responding side.
Evidence in chief by a party’s witnesses is invariably in written form. The statements and expert reports are delivered to the arbitrator when finalised, or when exchanged between parties, depending upon their agreement. The result is that the arbitrator knows a very great deal about the case well before the hearing starts. The conduct of the case should reflect that reality. There is no point in lengthy opening addresses or in explaining the case. The arbitrator will know what the lay witnesses say, what the expert’s opinions are, and they will have read the relevant documents. The presentation of the case, the advocate’s task, needs to be focused and direct. It is also relevant that the arbitrator will have been chosen by the parties for his known competence and/or experience so that you can address the issues confidently knowing the arbitrator understands the case and appreciates the competing arguments.
This observation holds good even when the arbitrator, or one of them, is a layman, engineer, accountant, or whatever. It is a mistake of advocacy to treat such people as inferior beings. Avoid being condescending. The advocate’s task is to persuade, not antagonise.
There are special problems which sometimes arise in international arbitrations where the arbitrators may come from different legal systems, from different cultural backgrounds and may not have English as their first language. These special problems can be ignored for present purposes. Perhaps they might become the subject of a separate address on another occasion.
I mentioned section 9(3) which gives an arbitrator the power to determine the admissibility, relevance and weight of any evidence. If you are going to object to the reception of evidence, you will need better arguments than one which says that the impugned evidence should not be received because Cross on Evidence says it is inadmissible or because its reception would contravene one of the many restrictions on receiving evidence. Especially if the arbitrator is a layman, you will need to demonstrate why it would be an affront to the orderly conduct of the arbitration for the arbitrator to have regard to it. Putting technicalities aside, the two basic objections to the reception of evidence is that it is hearsay i.e. the witness had no direct knowledge of the event testified to; or the evidence is an opinion, or a conclusion, and the person expressing it is not duly qualified as an expert, or the opinion is not truly the subject of relevant expertise.
As a general rule objections to evidence should be kept to a minimum and only made where the evidence objected to cannot be properly admitted and will be damaging. It is surely better to ignore harmless or irrelevant hearsay than take up valuable time arguing about its reception. The same is true of objectionable opinion evidence. Arbitrators are professional people. They will want to reach the right decision and for the right reasons, which includes acting only on proper evidence. It is easy to lose sight of the fact that the rules of evidence are designed to ensure that what is put before a court is likely to be reliable. If you can demonstrate to an arbitrator that the evidence you object to looks to be unreliable, for example because it is hearsay and cannot be challenged or because it is opinion and the proper groundwork for the expression of the opinion has not been established, the arbitrator is likely to uphold the objection.
Section 19(4) gives an arbitrator “The power to make orders …for the examination of a … witness on oath or affirmation”. That has a practical application. It means that witnesses are not necessarily sworn or affirmed when called to give evidence. The arbitrator decides whether he requires that form of binding the witness’s conscience. In my experience the parties will tell the arbitrator if they want the witnesses to testify on oath, or the arbitrator will ask if they want the witnesses sworn. My own preference is to proceed in that way. It is especially important in cases involving contested questions of fact. Even in an apostate age such as ours, the taking of an oath or affirmation brings to the attention of the witness the importance of the occasion, and the need to be both honest and accurate.
Arbitrations are often conducted according to an agreed timetable, which may be tight. A fixed period of time is allowed for the entire hearing and it is common for parties to agree to an equal division of time for adducing evidence, cross examining and addressing. There are so-called “stop clock” arbitrations in which the time is divided and regulated to a matter of hours. Where this is the case, or where there are more general time constraints, cross examination in particular has to be thoroughly planned and conducted so as to stick to the point, avoid distractions and irrelevancies, and conclude within the allotted time. Because your time with the witness is limited, the cross examiner must identify the critical point or points and determine how to develop them quickly. Discursiveness and rambling are obnoxious in any jurisdiction but are truly pernicious in arbitrations. Time is of the essence and a hardnosed focusing on the important is essential.
Counsel will, in most cases, be involved in the preparation of witness statements. The drafting of these is part of advocacy, just as adducing evidence in chief from a witness orally, is part of the advocate’s task of persuasion.
Of course I do not mean that the statement should become the lawyers’, or that a witness should be coaxed or coached. The evidence must be that of the witness but it can be presented in such a way as to be persuasive and incline the decision maker to accept it. Statements should contain facts not arguments. They should be concise, coherent and proceed by way of understandable narrative. They should comply with the rules of evidence because, although an arbitrator can overlook the rules, statements that contain evidence beyond the witnesses own knowledge, or express opinions not facts, will diminish their weight.
Written submissions have assumed greater importance in recent years and this is particularly true of arbitrations where, as I have said, time is compressed, arguments and issues are condensed and the arbitrator will have had given to him large amounts of documents which may not have been the subject of oral debate but would have been referenced in statements or pleadings. The written submission is the medium to draw all the threads together and present the party’s case in a clear and compelling manner. You are all familiar with the requirements for producing good written submissions and I will mention only the aspects that may have particular application for arbitration. The submissions must of course be tailored to the particular arbitrator or arbitrators as well, of course, to the subject matter of dispute. You may be dealing with arbitrators who, though competent in their field, may not be used to the discipline of fact finding, analysis or the writing of reasoned judgments. Your written submissions should be designed to help them along that path.
At a basic level the submissions should set out what relief or remedy the party contends for and why that result should be given. The submissions should formulate each proposition of fact which the arbitrators is asked to find by reference to the evidence which supports it. Where question of law have to be decided, the propositions contended for should be identified and the legal arguments clearly laid out.
In all cases, but especially with lay arbitrators, you should use clear, simple language, short sentences and numbered paragraphs. The subject matter of the submission should be logically structured and each part identified by appropriate headings. Where documents are relied on they should be clearly referenced and should be given to the arbitrator in an easily accessible format. Remember the arbitrator does not have an associate or secretary to help with handling or accessing documents. All cases generate paper, but strive for economy. A folder, as small as possible in the circumstances, containing all the critical documents, is a good start.
Sometimes submissions can include the findings of fact that the party contends for so that an arbitrator may incorporate them easily into the award. This can be a convenient way of structuring the submissions. The proposed findings of fact have to be argued for with reference to the evidence, any relevant law, documents, witness statements and oral testimony.
Conciseness is a virtue. Succinctness leads to easier comprehension, especially when the arbitrator is not an experienced lawyer. Too much detail, too many references to evidence, or to cases may be a distraction. Where there are copious references it is best to proceed by way of footnotes rather than incorporating them in the text. Only the essence of the evidence, or the propositions of law, should be in the body of the submissions.
Take the gospel’s advice: let your speech be plain: say “yes or no: anything more comes from the devil”. Avoid adjectives and adverbs, completely if possible. Do not use rhetorical flourishes or any kind of hyperbole. Do not overstate.
I recently came across some good advice for the drafters of submissions, which was new to me. It was that having prepared the first draft the advocate should put it away for a time then read it afresh as if he or she were the arbitrator. In that process prune anything that smacks of verbosity or repetition, and see to what extent expressions can be shortened and simplified.
In the same place where I found that advice I came across the statement that arbitrators generally will be annoyed or alienated by written submissions that:
· are prolix, including irrelevancies; or excessive quotations of fact or authority; or a failure to distil the essence of the argument;
· include too many points or issues resulting from a failure to cull weak points;
· are incoherent because they lack a logical theme or fail to organise material into an integrated whole;
· are inaccurate, containing misstatement of facts or issues;
· omit or misquote authorities, or quote them out of context;
· are mechanically defective because they lack an index; or have an inadequate chronology; or inaccurate references to authorities and transcripts; or because they contain typographical errors, poor grammar or spelling.
Remember that the calibre of the written submissions establishes the credibility, or lack thereof, of the advocate advancing them. If your written submissions are poor your oral argument in support or amplification of them is likely to be received doubtfully. Written submissions which are inaccurate or poorly argued or suffer from some of the defects I have identified, are likely to be put aside by the arbitrator who will pick up the opponent’s submissions if they have obeyed the rules of advocacy. You want your submissions to be the ones the arbitrator turns to for help in writing the award.
It is, of course, unethical to mislead any tribunal as to the law. The obligation not to do so, and to be absolutely precise and accurate when arguing any point of law is much stronger when the tribunal is not legally qualified, such as a lay arbitrator, and the chance of misunderstanding or confusion is greater than with a trained lawyer.
Can I finish with a brief reference to two unrelated concepts. One of the advantages of arbitration is its complete confidentiality. It is not uncommon for an arbitration agreement to provide that even the existence of a dispute between the parties is not to be revealed so that no-one unconnected with the dispute knows that a disagreement has arisen. Only the arbitrator and reporter, if transcription has been agreed, the parties, their legal representatives and their witnesses are allowed into the hearing room. There are ethical constraints on what barristers can reveal about their instructions but there is no constraint on talking of what happened in court, and a day’s excitement is often repeated over an after-work drink. Section 27E of the Act prohibits the disclosure of confidential information in relation to an arbitral proceeding, subject to some limited exceptions. Confidential information is defined in s.2 to mean any information that relates to the arbitral proceedings including, specifically, the pleadings, the evidence, the rulings and the award.
I mentioned the limited right of appeal against awards. There is an additional, though also limited, right to have the award corrected with respect to “any errors in computation, any clerical or typographical errors or any errors of similar nature”. The right does not apply so as to change substantial findings of fact, but errors of a kind which give the award an effect different to its stated intention can be corrected. A party who wants the correction to be made must request it within 30 days of receiving the award.
There is also a power to request the arbitrator “to give an interpretation of a specific point or part of the award”. I have no personal experience of such a proceeding. It would seem appropriate where there is some ambiguity or uncertainty in the reasons for the award, or the award, or some conflict between the reasons and the award itself. The arbitrator can be asked to remove the uncertainty.
Can I end as I began by suggesting that arbitrations are a valuable adjunct to dispute resolution and can afford a speedy and therefore economical decision making process. They offer flexible proceedings and competent Tribunals with an interest in efficiency and the delivery of result both legally and factually correct. As advocates I think you will find the arbitral experience satisfying, personally and for your clients.