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In situations, things may be quite straightforward, at least the parties in an arbitral proceeding may believe such.As a result, parties to arbitration, at times, consider the goodness of the decision of continuing with the proceedings in full. Rather, they look for a summary proceeding whether the apparent and undisputed questions of laws or facts or even sometimes mixed questions of law & facts may get resolved quickly. Dispositive motions come into the scene with this paradigm. In short, a dispositive motion is brought before an arbitral tribunal whenever one of the parties decides to proceed for a summary award of the arbitration requesting the tribunal to assess the strength of the contentions of its side.[1] It’s has similarities to the summary judgment proceedings of the civil courts, however, there may be some areas to develop in respect of the application of the test applicable in arbitral proceedings, if at all. However, there is no denial that dispositive motions are becoming increasingly common in arbitrations, specially, in a more complex one.
Dispositive motions are prayers for summary proceedings of the arbitration. In case a dispositive motion is granted by the arbitral tribunal, the opportunity of the parties to be heard of the subject matter of the motion is compromised. The subject matter of the dispositive motion may be a legal issue, or a factual one or even the merit of the arbitration. Dispositive motions, if granted, lead the arbitrator to decide on the issue on the basis of no hearing or a short hearing.[2] Though is a settled principle even in arbitration that each party has a right to be heard and should be given a fair opportunity to present its case[3], a summary proceeding before an arbitral tribunal granted on the basis of a dispositive motion cannot really be considered as a denial of this right of fair hearing. The right to be heard does not necessary mean the right to a complete hearing before the court, even the opportunity of a summary hearing on an issue may fulfill the requirement of the right to be heard.
In case of both institutionalized or ad-hoc arbitrations, the rule administering the arbitration may contain provision regarding dispositive motions.[4] In case the rules according to which the arbitration is administered contains a provision regarding the time frame of a motion for disposition, that time frame will be followed. The rule may even contain instructions regarding the dispositive motion. In case the rule does not contain any such provision, general instructions regarding dispositive motion including a deadline may be set by the tribunal during the preliminary hearing. In the procedural order containing instructions regarding dispositive motions, the arbitrators may think of setting an early deadline for filling this motion so that the final merit hearing of the arbitration does not get delayed. However, it is an ongoing trend that the parties to an arbitral agreement frequently include more flexible arbitration clauses in an effort to obtain a cheaper, more expeditious form of dispute resolution than resort to the courtroom.[5] In such situations, parties even tend to include more detail provisions in the arbitral agreements regarding the dispositive motions.
Footnotes
[1] See, James Lyons, Arbitration: The Slower, More Expensive Alternative? Am. Law., Jan.-Feb. 1985, at 107; see also Thomas Stipanowich, Rethinking American Arbitration, 63 Ind. L. J. 425, 452-76 (1988) (observing that many surveyed respondents disagreed that arbitration was faster and cheaper than litigation).
[2] See, D. Brian King and Jeffery P. Commission, Summary Judgment in International Arbitration: The “Nay” Case, ABA International Law Spring 2010 Meeting, at 1 (Spring 2010)
[3] American Arbitration Association (AAA) Commercial Arbitration Rules, Rule 30
[4] For example, See, CAFTA-DR, Article 10.20 (“Without prejudice to a tribunal’s authority to address other objections as a preliminary question, a tribunal shall address and decide as a preliminary question any objection by the respondent that, as a matter of law, a claim submitted is not a claim for which an award in favor of the claimant may be made under Article 10.26.”), available at: http://www.ustr.gov/trade-agreements/free-trade- agreements/cafta-dr-dominican-republic-central-america-fta/final-text. See also, U.S. Model Bilateral Investment Treaty, Article 28 (contains identical language than CAFTA Article 10.20), available at: http://www.state.gov/e/eeb/ifd/bit/index.htm
[5] See Generally, Alfred G. Ferris and Biddle W. Lee, The Use of Dispositive Motions in Arbitration, 62 Disp. Resol. J. 17, 24 (1 August 2007)