November 11, 2015 Articles

An Arbitrator's Duty to Be On Time

By Marcia L. Adelson and Joan D. Hogarth

The failure to issue an arbitration award within the prescribed time period is not a common occurrence. It certainly was not in Texas when the Sims case arose. When it does happen, the purpose and intent of arbitration—party-driven, expedient, and cost-effective means of dispute resolution—is thwarted. Despite the potential for undermining expediency in the arbitration process, courts are willing to defer to the arbitrator's late decision unless the act of the arbitrator is so egregious as to create actual or potential harm to the parties.

As Justice Brennan noted in United Steelworkers of America v. American Manufacturing Co., 363 U.S. 564 (1960), "arbitration is a creature of contract." Therefore, the arbitrator's authority is derived from the parties' arbitration agreement, applicable arbitration rules (e.g., AAA, FINRA, JAMS, etc.), and applicable arbitration law, either state or federal. The arbitrator is the guardian of the integrity of the process. As such, a duty is imposed on such person or persons to hear and to decide only those issues the parties agreed to arbitrate and to follow any and all procedures agreed to by the parties.

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