Commercial Arbitration Rules
The AAA’s Commercial Arbitration Rules (the “Rules”) are available on-line at the AAA’s website. The following summary is not meant to be comprehensive, but to provide an overview of some key parts of the Rules. At the outset, lawyers who handle commercial arbitration, and parties to arbitration proceedings, should be aware that an expressed purpose of the Rules is to provide a system for resolving commercial disputes less expensively and more expeditiously than can the court system. For that reason, the Rules caution that arbitrators should avoid applying court procedures to arbitration cases.
The Different Procedures: Under the AAA’s Commercial Arbitration Rules, one of three different categories of procedures will apply depending on the amount of the claim or counterclaim, as follows:
|$75,000 or less (not including interest, attorney’s fees, and arbitration fees and costs)||Expedited Procedures|
|$500,000 or more (not including interest, and arbitration fees and costs)||Large, Complex Commercial Disputes Procedures|
|All others||Commercial Disputes Procedures|
Parties with claims greater than $75,000 may agree to use the Expedited Procedures, and parties with claims greater than $500,000 may agree to use the rules applicable to commercial disputes of less than $500,000.
Number of Arbitrators: Under the AAA’s Commercial Arbitration Rules, the dispute will be heard and resolved by one arbitrator, unless the parties have agreed in their arbitration agreement to use more, or unless the AAA determines that three arbitrators may be used. Under the Rules, either party may request that three arbitrators be used, but the AAA has complete discretion as to whether or not more than one arbitrator will be used. For disputes where the claim or counterclaim involves at least one million dollars ($1,000,000), with some possible exceptions, three arbitrators will decide the dispute.
Evidence: State and federal evidence rules do not govern in commercial arbitration proceedings. Under the Rules, the parties may rely on any information that is “relevant and material to the dispute.” Under the Rules, the arbitrator has complete discretion in deciding what evidence may be introduced and what evidence may be excluded.
Majority Decision: With some exceptions, the final decision in an arbitration dispute will be determined by majority vote where the panel consists of three arbitrators. In most cases where the panel consists of three arbitrators, disputes regarding discovery, which the AAA refers to in the Rules as the “exchange of information,” will be resolved by the arbitrator selected as the chairperson.
No Reasoned Decision Required: Notably, unless the parties request a reasoned award prior to the appointment of the arbitrator, the arbitrator is not required to provide any basis for his or her decision. The arbitrator may do so in his or her discretion.
Interim Measures: The Rules authorize an arbitrator to take interim measures, meaning measures before the arbitrator reaches a final decision on the merits, in order to protect property. Thus, arbitrators have the ability, similar to courts, to order injunctive relief.