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Arbitration: Strategies at the time a dispute arises

In my last article I looked at what could be done at the time the arbitration clause is negotiated to advance the efficiency and cost effectiveness of the Arbitration. How that process ends up will be a harbinger as to what can or cannot be done at the next stage, when the dispute arises.

Regardless, what is first necessary for one to do is to carefully read the Arbitration Clause and the Agreement it is found in to ensure that there are no false steps. One of the surest ways to protract the arbitration is to give fodder to the other side, should the party seeking to invoke arbitration makes a misstep. Some points to consider, therefore, to avoid this occurring are to identify if there are any limitations to be found in the agreement to permit the arbitration of the specific dispute. If there are, have “they passed” or do they need to be addressed? Has the dispute that has arisen such that it can be arbitrated? It may be for instance that the dispute is not yet “ripe.” Absent a “dispute” as contemplated by the Agreement containing the Arbitration Clause, there is nothing to arbitrate.

One consideration in British Columbia is whether to engage the BC International Domestic Commercial Arbitration Centre (BCICAC) to administer the Dispute, assuming they are not designated to do so in the Agreement under scrutiny. In the context of the objective that this article is addressing the benefit of having the BCICAC administer the Arbitration is to put time limits on the process as a starting point. As an example, Section 12 of the BCICAC Rules set out a time table for the appointment of an arbitrator after the Arbitration is deemed to have commenced (the filing of the Submission to Arbitrate with BCICAC along with the commencement fee). If the parties cannot agree on the appointment of an arbitrator within the time limits, one of the parties may request that the BCICAC appoint the arbitrator. There are similar default provisions in favour of the BCICAC if it is a three person arbitration panel to be appointed.

In my earlier articles I have written about the consideration of proceeding to mediation of a dispute before an arbitration could be sought. The challenge with that, as I have noted, is that if a provision to force the parties to choose that route is absent from the arbitration clause in the Agreement, then there is no mechanism to force the recalcitrant party to follow this path. That said, one option that might be considered to encourage the recalcitrant party to accept mediation is to hold over them the spectre of being penalized in costs. Rule 30 of the BCICAC Rules permits a party to make a Settlement Offer that the Arbitrator can consider, if it is rejected by the other side, when it comes to deciding issues of costs. I see no reason why a “settlement offer” by one party asking that the other refer the dispute to mediation before arbitration, once rejected, could not be a consideration by an arbitrator when it comes to deciding costs of the Arbitration. The BCICAC Rules gives the Arbitration Panel a wide discretion in deciding costs at the conclusion of the Arbitration.

See also: Arbitrations: Can they be more efficient and cost effective than the courts?


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