Non-binding arbitration is a type of arbitration in which the arbitrator makes a determination of the rights of the parties to the dispute, but this determination is not binding upon them, and no enforceable arbitration award is issued. The "award" is in effect an advisory opinion of the arbitrator's view of the respective merits of the parties cases. Non-binding arbitration is used in connection with attempts to reach a negotiated settlement. The role of an arbitrator in non-binding arbitration is, on the surface, similar to that of a mediator in a mediation. However, the principal distinction is that whereas a mediator will try to help the parties find a middle ground to compromise at, the arbitrator remains totally removed from the settlement process and will only give a determination of liability and, if appropriate, an indication of the quantum of damages payable.
Subsequent to a non-binding arbitration, the parties remain free to pursue their claims either through the courts, or by way of a binding arbitration, although in practice a settlement is the most common outcome. The award and reasoning in a non-binding arbitration is almost invariably inadmissible in any subsequent action in the courts or in another arbitration tribunal.
Non-binding arbitration is utilised mostly in the United States and Canada. It is largely unknown in Europe, although in the United Kingdom there is a practice of parties who are seeking a settlement to jointly instruct a Queen's Counsel for an opinion on the merits and likely quantum of a claim, and then to negotiate on the basis of the views expressed in that opinion.
In fiction
In the Michael Crichton book, Disclosure (and in the 1994 film of the book), the sexual harassment claim relating to the lead character, Tom Sanders, is subject of a non-binding arbitration, which finds in his favour, but the other parties reject the determination.
Arbitration, in the context of United States law, is a form of alternative dispute resolution. Specifically, arbitration is an alternative to litigation through which the parties to a dispute agree to submit their respective positions to a neutral third party for resolution. In practice arbitration is generally used as a substitute for litigation, particularly when the judicial process is perceived as too slow, expensive or biased. In some context, an arbitrator may be described as an umpire.
Dispute resolution or dispute settlement is the process of resolving disputes between parties. The term dispute resolution is sometimes used interchangeably with conflict resolution, although conflicts are generally more deep-rooted and lengthy than disputes. Dispute resolution techniques assist the resolution of antagonisms between parties that can include citizens, corporations, and governments.
Mediation is a structured, interactive process where an impartial third party assists disputing parties in resolving conflict through the use of specialized communication and negotiation techniques. All participants in mediation are encouraged to actively participate in the process. Mediation is a "party-centered" process in that it is focused primarily upon the needs, rights, and interests of the parties. The mediator uses a wide variety of techniques to guide the process in a constructive direction and to help the parties find their optimal solution. A mediator is facilitative in that she/he manages the interaction between parties and facilitates open communication. Mediation is also evaluative in that the mediator analyzes issues and relevant norms ("reality-testing"), while refraining from providing prescriptive advice to the parties.
The Permanent Court of Arbitration (PCA) is an intergovernmental organization located in The Hague, Netherlands. It is not a court in the traditional sense, but provides services of arbitral tribunal to resolve disputes that arise out of international agreements between member states, international organizations or private parties. The cases span a range of legal issues involving territorial and maritime boundaries, sovereignty, human rights, international investment, and international and regional trade. The PCA is constituted through two separate multilateral conventions with a combined membership of 122 states. The organization is not a United Nations agency, but the PCA is an official United Nations Observer.
Online dispute resolution (ODR) is a branch of dispute resolution which uses technology to facilitate the resolution of disputes between parties. It primarily involves negotiation, mediation or arbitration, or a combination of all three. In this respect it is often seen as being the online equivalent of alternative dispute resolution (ADR). However, ODR can also augment these traditional means of resolving disputes by applying innovative techniques and online technologies to the process.
International arbitration is arbitration between companies or individuals in different states, usually by including a provision for future disputes in a contract.
An arbitration award is a determination on the merits by an arbitration tribunal in an arbitration, and is analogous to a judgment in a court of law. It is referred to as an 'award' even where all of the claimant's claims fail, or the award is of a non-monetary nature.
Stephen Myron Schwebel, is an American jurist, counsel and independent arbitrator. He serves as Judge of the World Bank Administrative Tribunal and as a member of the U.S. national group at the Permanent Court of Arbitration. Previously, he served as President of the World Bank Administrative Tribunal (2010–2017), as President of the International Monetary Fund Administrative Tribunal (1993–2010), as President of the International Court of Justice (1997–2000), as Vice President of the International Court of Justice (1994–1997) and as Judge of the International Court of Justice (1981–2000). Prior to his tenure on the World Court, Judge Schwebel served as Deputy Legal Adviser to the U.S. Department of State (1974–1981) and as Assistant Legal Adviser to the U.S. Dept. of State (1961–1967). He also served as a professor of law at Harvard Law School (1959–1961) and Johns Hopkins University (1967–1981). Judge Schwebel is noted for his expansive opinions in momentous cases such as Legality of the Threat or Use of Nuclear Weapons, Military and Paramilitary Activities in and Against Nicaragua and Oil Platforms .
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995), was a case decided by the Supreme Court of the United States on who decides whether a dispute is subject to arbitration, the courts or an arbitrator.
Arbitration, a form of alternative dispute resolution (ADR), is a way to resolve disputes outside the courts. The dispute will be decided by one or more persons, which renders the 'arbitration award'. An arbitration award is legally binding on both sides and enforceable in the courts.
The Chartered Institute of Arbitrators (CIArb) is a leading professional membership organisation representing the interests of alternative dispute resolution (ADR) practitioners worldwide. It has over 16,000 members located across 149 countries supporting the global promotion, facilitation and development of all forms of private dispute resolution worldwide. Institute members cover the three main ADR disciplines of arbitration, construction adjudication and mediation.
An arbitral tribunal is a panel of one or more adjudicators which is convened and sits to resolve a dispute by way of arbitration. The tribunal may consist of a sole arbitrator, or there may be two or more arbitrators, which might include either a chairman or an umpire. Members selected to serve on the tribunal are typically professionals with expertise in law and mediation, although some scholars have suggested that the ideal composition of an arbitral tribunal should include at least one economist, particularly in cases that involve questions of asset or damages valuation.
Forum, formerly known as the National Arbitration Forum (NAF) is an American organization that provides arbitration and mediation services to businesses, based at its Minneapolis headquarters and offices in New Jersey. The organization was founded in 1986. As of 2008, the National Arbitration Forum administered over 200,000 cases a year, most of which were consumer debt collection cases. In 2009, the National Arbitration Forum ceased administration of new consumer arbitrations as part of a consent decree with the Attorney General of Minnesota Lori Swanson concerning the NAF's ties with debt collection firms. The company maintains a panel of over 1,600 arbitrators and mediators who are attorneys and former judges located across the United States and in 35 countries around the world. Panelists arbitrate and mediate the disputes.
Alternative dispute resolution (ADR), or external dispute resolution (EDR), typically denotes a wide range of dispute resolution processes and techniques that act as a means for disagreeing parties to come to an agreement short of litigation: a collective term for the ways that parties can settle disputes, with the help of a third party. However, ADR is also increasingly being adopted as a tool to help settle disputes alongside the court system itself.
Hall Street Associates, L.L.C. v. Mattel, Inc., 552 U.S. 576 (2008), was a United States Supreme Court case that held that state and federal courts cannot, on a motion to vacate or to modify an arbitration award, expand the limited scope of judicial review specified in 9 U.S.C. §§ 10 and 11, including terms that were agreed upon by the parties.
Investor-state dispute settlement (ISDS) or investment court system (ICS) is a system through which investors can sue countries for discriminatory practices. ISDS is an instrument of public international law, and it contains a number of bilateral investment treaties, in certain international trade treaties, such as the USMCA. A version of it also appeared in the older NAFTA, and the CPTPP and CETA agreements. ISDS is also found in international investment agreements, such as the Energy Charter Treaty. If an investor from one country invests in another country, both of which have agreed to ISDS, and the host state violates the rights granted to the investor under the treaty, then that investor may bring the matter before an arbitral tribunal.
Dr Phytos Poetis, OM, Dr iur (Hamburg), FCIArb, Barrister, is an International Lawyer.
United States Arbitration Association (USADR) is an alternative dispute resolution company and one of several ADR organizations that administer arbitration proceedings. Additionally, USADR offers mediation to parties who have filed for arbitration through USADR's national forum. USADR emphasizes accessibility in resolving disputes by embracing and promoting the traditional values of arbitration: affordability, expediency, and equity; favoring the use of industry experts and promoting fairness and fair process to pro se parties and represented parties alike. Its corporate headquarters is located in Denver, Colorado.
Disputes between consumers and businesses that are arbitrated are resolved by an independent neutral arbitrator rather than in court. Although parties can agree to arbitrate a particular dispute after it arises or may agree that the award is non-binding, most consumer arbitrations occur pursuant to a pre-dispute arbitration clause where the arbitrator's award is binding.
Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. ___, 139 S. Ct. 524 (2019), was a case decided by the Supreme Court of the United States on January 8, 2019. The case decided the question of whether a court may disregard a valid delegation of arbitrability—a contract provision stating that an arbitrator should decide whether a dispute is subject to arbitration—when the argument in favor of arbitration is "wholly groundless." In a unanimous (9-0) opinion written by Justice Brett Kavanaugh, the court sided with petitioner Henry Schein, Inc., holding that the "wholly groundless" exception to arbitrability violates the Federal Arbitration Act, and therefore a valid delegation of arbitrability should be honored even if a court believes the argument for arbitration to be "wholly groundless." It was Justice Kavanaugh's first Supreme Court opinion.
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