While the use of arbitration is on the rise, there are some persistent misconceptions about the process that may be deterring some from using this economical alternative to court trials. Here are a few of those myths along with the reality of commercial arbitration practice.
Myth #1: Arbitrators do not follow the law.
Perhaps this myth stems from the fact that the arbitration process is more informal than a court trial. However, the law that willapply to the merits of a case usually is set forth in the arbitration provision of parties’ contract. If not, it is one of the first things to bedetermined at the preliminary conference with the panel. Arbitrators are guided by the rules of law specified by the parties. In some circumstances, if allowed by the parties’ contract and the governing arbitration rules, arbitrators also may be guided by the rules of equity in granting relief. At the end of a case, a reasoned arbitration award should outline the key issues and the decision of the panel as supported by the evidence and the law.
Originally published in LAW.COM.
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