21 November 2018 at 18:11 BST

Arbitration can be both hit and myth

General counsel should maybe be wary, as AAA publishes white paper to flag myths surrounding a growing trend.

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The American Arbitration Association has published a white paper highlighting some myths about arbitration, including the myth that interim injunctive relief is only available in court.

Correcting myths

Arbitrators typically have the power to grant injunctive relief, and the arbitrator’s rules allow such relief to be expedited on an emergency basis. Discovery is also allowed in arbitration, contrary to popular belief. The parties control its scope, and if the agreement doesn’t specify, then under AAA’s rues arbitrators are authorized to direct a pre-hearing exchange of documents and determine how much discovery the case requires. Awards can be appealed (if the parties agree) on grounds that the award is based on material and prejudicial errors of law or on determinations of fact that are clearly erroneous.

Manifest disregard

A panel hears the appeal with a goal of issuing a decision within three months. Arbitrators are often said to ignore the law, but the arbitration clause usually contains a provision specifying the law that will govern the arbitration proceedings. Although arbitrators can grant remedies that are not statutory, their remedies can be vacated if they exceed their powers and some jurisdictions allow arguments to vacate an arbitration award based on ‘manifest disregard of the law.’ The white paper can be read here.

 
   
 
 
 

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