Dissenting in Arbitration

BEFORE anyone gets the idea that I am the proverbial dissenter or advocate for dissents per se, I should like to put their minds at ease by stating that, out of the 700 or so awards in which I have participated as an arbitrator, I have dissented, in varying degrees, in forty cases. Some of the dissents have been quite limited (disagreeing, for example, with the assessment of attorneys' fees and costs) or brief (because I referred to an earlier decision, citing it as a case I relied on), while some became a bit repetitious (because of the same subject matter, such as the old six-hour question, GMT v local time, etc.). At all times I have tried to be conciliatory and agreeable, even when disagreeing.

I should point out that some of the comments made must be viewed in the context of the rules/code of ethics of the Society of Maritime Arbitrators, which provide that, even when party-appointed, arbitrators are expected to be impartial and must act without bias, partisanship or the appearances thereof. Do they? I think most of them do, but there are exceptions.

Dissents come in all shapes and forms. I have seen dissents which were limited to a single reference in the award, such as "Mr. X dissents", to a dissent which covered more than 200 pages. These are, of course, the extremes and, if one believes in the value of dissenting opinions, quite useless. These extremes can also be viewed as the work products of zealots who use the dissent as a way to please their appointers.

Dissenting must be a matter of conviction and not convenience or politics.

It may be stating the obvious to say that when arbitrators meet for their deliberations, they should be prepared, totally familiar with the facts, the arguments and the applicable law. In the normal course of events, the arbitrator will either have reached a decision or formulated a position to argue during the deliberation. The arbitrator, however, should also have an open mind, to be able to listen to the arguments/opinions of the panel members and engage in a meaningful discussion on the merits of the case. To change one's mind in the course of a deliberation should not be considered a weakness or a relinquishing of one's duty, but rather the result of sounder logic and more convincing arguments.

How should dissents be written? Certainly not with a poison pen. They should not be an attack on the majority, but rather a factual pronouncement without emotional colouring. The opinions should be focused, clearly identifying the areas of disagreement, and should list in a concise fashion the arguments in support of the divergent opinion.

I do not agree with the practice of some arbitrators who totally disregard the majority opinion and treat their dissent as if it were the award by a sole arbitrator. Granted, the opinions should stand on their own merits, but, to a degree, they are still complementary to each other. If the majority opinion correctly sets forth the background, the disputes and the arguments, then there is no need to repeat the same points in the dissent.

Some arbitrators will not let their fellow panel members read their dissents until the award is finalised. This certainly does not make sense, other than if the dissenter makes some outrageous statements or assumptions. A case is not decided until the award has been signed and issued.

It should be reasonable to assume that dissenters have an interest in bringing their opinion before the majority because the possibility certainly does exist that the majority, or a member of a majority, might adopt the dissent or modify the plurality's opinion.

Nothing is gained when arbitrators start a deliberation with polarised positions and an unwillingness to listen to persuasive argument. To this end, deliberations should be conducted with the proper decorum, in a businesslike manner and without rancour. It is meant to be an intellectual exercise and not an admonitory or moralising discourse.

Even after having participated in many different arbitrations, it is still surprising how some cases stay fresh in one's mind because of particular circumstances. I have omitted any specific references to the cases, but all are recounted from actual arbitrations and published awards.

In one of my earliest dissents, after the award had been issued, I received a phone call from owners' inhouse lawyer angrily inquiring why I had to write a dissent on the quantum of damages when the two party-appointed arbitrators were in agreement. The majority had held that owners had "established a prima facie case which, in the absence of any rebuttal by the charterers, has to prevail". In fact the majority in that case rendered a default judgment since charterers had failed to appear in the proceedings.

It was my position that, even in a no-show arbitration, the panel has an obligation to examine the claim carefully for its merit and proper calculations and not blindly adopt amounts which have been presented by the claimants. Had I not dissented, I tacitly would have endorsed the manner of the majority's damage calculation, a calculation with which I fundamentally disagreed.

In another case, prior to the completion of the evidentiary phase of the arbitration, counsel for owners withdrew from the case for lack of further instructions from their principals. Charterers' counsel briefed the issues and asked for an award. At the deliberation, the arbitrators were in agreement that they should not issue a default judgment, but examine the merits and proof of the claims.

At one stage during the discussion, however, the arbitrator appointed by owners stated, "If the owners were still in this case, they would have argued [such and such]", but these arguments were not in the record and were not readily evident from the documents submitted. That arbitrator, true to his colours, tried to make a case for his appointor, which, of course, was rejected by the other panel members.

The arbitrators have a duty to ensure that the arguments by each side are fully and fairly considered, but the arbitrators should not argue points which counsel could have or should have argued, if they had been there.

Under the same fact pattern and with the same contract clauses, arbitrators should reach the same conclusions. The users of the system are entitled to know how an arbitrator thinks and should be entitled to have the reasonable expectation that panellists are consistent. In the event that an arbitrator finds differently in what some may perceive as the same type of case, then it should be incumbent upon the arbitrator to explain the different result and distinguish the facts which led to such a decision.

This brings to mind a case where, under an SMA arbitration clause, an owner was seeking demurrage/detention for a tug/barge awaiting the arrival of the cargo. The charterer rejected the owner's claim, arguing that the tug had left the barge (seeking interim employment) and, therefore, the owner was not in a position to give a proper notice of readiness. Arbitrator "X" found that it was an improper tender, whereas the panel majority held that the proximate cause of the delay was the non-availability of the cargo.

In a parallel proceeding before the American Arbitration Association, the charterer (this time wearing the hat of the cargo buyer) again appointed Arbitrator "X", seeking indemnity from the cargo sellers for the loadport delays. The AAA proceeding resulted in an award by majority (formed by chairman and Arbitrator "X") holding that the supplier had failed to have the cargo ready and, therefore, was liable for damages resulting from the delays.

Dissenting must be a matter of conviction and not convenience and/or politics. I recall a case when I disagreed at the deliberation. At the time I thought my position to be reasonable and logical (at least to me). When I tried to write the opinion with sufficient clarity to warrant the dissent, I came to realise that I had difficulties formulating my arguments to justify a dissenting view. After wrestling with the problem for a while, I notified the chairman that I would join the majority. I may have avoided a lot of agonising had I just stated, "I dissent", but how could I justify it when I could not rationalise it?

Dissents should not be an attack on the majority, but rather a factual pronouncement without emotional colouring.

Several years ago, I found myself in the minority at a particular deliberation. After considerable time had passed and I had not yet seen a draft of the majority opinion, I called the chairman inquiring about the status of his drafting. His response was that the matter should be dealt with in an "appeal court fashion". I was then enlightened that my dissent should be drafted first and submitted to the majority for review. They then planned to dissect it and, unless I adopted their views, would tailor their majority opinion in opposition to my dissent.

These vignettes show some of the things that happen in the deliberation stage of arbitrations. The one thing to keep in mind is that most cases are concluded without any such odd incidents.

The decision-making process is not a matter of right or wrong with respect to the issues under consideration, but rather of different views on the same subject, sometimes distorted by blatant partisanship.

Although not quite on point, but nevertheless related to this theme, is the concurring opinion. On occasion, arbitrators agree upon a certain result but disagree with the manner in which it was reached. Despite the unanimous result, I would consider it appropriate for the arbitrators to state their individual views as it would shed light on the arbitrator's thinking process with respect to the disputes and results.

Despite my varying and sometimes aggravating experiences, I am still convinced of the benefit of dissents and their value as building blocks in the evolution of commercial law.