Summary Disposal In Arbitration and Tribunals’ Ability To Order Summary Procedure Without Express Authority
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The fundamental question is whether tribunals’ general power to conduct arbitral proceedings in a fair and efficient manner enables them to order a summary procedure in circumstances where the parties have not expressly agreed such procedure. The answer to this question can have important and costly ramifications. More broadly, the availability of summary disposal as part of the arbitration process can potentially impact the way in which arbitration may be perceived and used in the future.
Certain industries, such as the financial services sector, have been reluctant to embrace arbitration as a dispute resolution mechanism due to the alleged lack of such summary procedure. Yet, tribunals are faced with applications for summary disposal on a regular basis. In that context, tribunals are often threatened by defending parties that any award rendered on a summary basis would impact that party’s ability to present its case and ultimately would be challenged on that basis. Recognising the uncertainty and the shortfall of cases that a more streamlined process could attract, institutions have considered revisiting their rules to introduce summary procedures with some taking the plunge and others not.
The Weirton case concerned the annulment proceedings of an arbitral award rendered by a sole arbitrator on a summary basis. A dispute had arisen between a hospital, Weirton Medical Center, Inc. (“Weirton”) and Quorum Health Resources LLC and affiliated persons (“Quorum”) in relation to the termination and payment under two separate administrative services agreements. Each agreement provided for arbitration in accordance with “the arbitration rules of the American Arbitration Association (AAA)” albeit in different cities in the United States. In addition, one agreement invoked “the substantive and procedure laws of the State of Tennessee applicable to contracts made and to be performed therein” and the second invoked “the substantive and procedure laws of the State of West Virginia applicable to contracts made and to be performed therein”.
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