Answer ... (a) Procedure, including evidence?
The FAA only addresses two very limited issues on procedure and evidence.
First, Section 7 of the FAA states that: “The arbitrators selected either as prescribed in this title or otherwise, or a majority of them, may summon in writing any person to attend before them or any of them as a witness and in a proper case to bring with him or them any book, record, document, or paper which may be deemed material as evidence in the case.” However, there has been some judicial debate over the scope of this provision. The Second and Third Circuit have held respectively that Section 7 does not grant an arbitrator authority to order non-parties to appear at depositions or provide parties with documents prior to a hearing (Life Receivables Tr v Syndicate 102 at Lloyd’s of London, 549 F3d 210, 216–17 (2d Cir 2008); Hay Grp, Inc v EBS Acquisition Corp, 360 F3d 404, 410 (3d Cir 2004)). The Eighth Circuit takes the view that although the statute does not “explicitly authorize the arbitration panel to require the production of documents for inspection by a party, ... implicit in an arbitration panel’s power to subpoena relevant documents for production at a hearing is the power to order the production of relevant documents for review by a party prior to the hearing” (In re Security Life Ins Co, 228 F3d 865, 870–71 (8th Cir 2000)). A third, middle ground is represented by the Fourth Circuit, which – concerned that “arbitral efficiency would be ‘degraded if the parties are unable to review and digest relevant evidence prior to the arbitration hearing’” – has “read into the FAA an exception under which a party could petition the district court to compel discovery ‘upon a showing of special need or hardship’” (Comsat Corp v National Sci Found, 190 F3d 269, 275 (4th Cir 1999)). The courts are still in disagreement over which approach is to be adopted (see Matter of Roche Molecular Systems, Inc 60 Misc 3d 222 (2018)).
Second, Section 10(a)(3) of the FAA provides that the courts have authority to vacate an award where the tribunal “refuses to hear evidence pertinent and material to the controversy” (9 USC § 10(a)(3)). This provision is quite straightforward and has received little judicial commentary.
Other than on the two issues outlined above, the FAA does not provide rules of procedure or evidence, and arbitrators are typically bound by the arbitration rules and procedures agreed on by the parties in their arbitration agreement. Where the parties fail to designate applicable rules, the arbitrator will decide on questions of procedure and evidence after consultation with the parties, on an ad hoc basis.
(b) Interim relief?
The FAA does not expressly address whether tribunals can order interim remedies. However, courts have accepted that tribunals can order such relief if the arbitration agreement or the applicable arbitration rules grant them the authority to do so.
Interim relief generally takes the form of an interlocutory injunction to preserve the status quo until the tribunal has issued its award. Furthermore, tribunals may have (if applicable arbitration rules so provide) the authority to grant any interim relief necessary to secure assets to satisfy a final award. For example, a tribunal might order a party to deposit funds into escrow.
(c) Parties which do not comply with its orders?
Section 7 of the FAA provides that where a party fails to comply with a tribunal’s order to testify or produce documents, the party seeking to enforce the order may petition a court for enforcement. Indeed, an arbitral tribunal lacks the enforcement mechanisms that a judicial court has to compel document disclosure or testimony. Therefore, if a witness fails to appear or does not comply with an order of the tribunal, the innocent party may apply to a court in the jurisdiction of the arbitral tribunal to make an identical order. If the order is again not followed, proceedings for contempt of court can be commenced.
(d) Issuing partial final awards?
Section 16 of the FAA expressly contemplates both final and partial awards. The FAA therefore operates on the presumption that an arbitral tribunal situated in the United States can issue partial final awards. The grant of partial awards is also included in standard form arbitration rules. For example, Article 32(1) of the International Centre for Dispute Resolution Rules provides that: “In addition to making a final award, the arbitral tribunal may make interim, interlocutory, or partial awards.”
The courts are of the view that for a partial final award to be valid, it must resolve a discrete issue (Sperry Int’l Trade v Government of Israel, 532 F Supp 901, 909 (SDNY 1982), aff’d, 689 F2d 301 (2d Cir 1982); Southern Seas Navigation Ltd of Monrovia v Petroleos Mexicanos of Mexico City, 606 F Supp 692, 694 (SDNY 1985)). However, this threshold is not a particularly demanding one, as it has been held that a partial award will be enforced by a court “when such confirmation is necessary to ensure the integrity of the arbitration” (Companion Property and Cas. Ins. Co. v Allied Provident Ins., Inc, No 13-cv-7865, 2014 WL 4804466 (SDNY 2014).
(e) The remedies it can grant in a final award?
The FAA does not limit the types of remedies that a tribunal can award. However, the parties can agree to limits, either expressly or by adopting a particular set of arbitration rules.
If no limitations are stipulated (as is generally the case under standard form arbitration rules), the tribunal can award a wide range of remedies. The Supreme Court has held that arbitrators may award punitive damages unless the parties’ agreement expressly prohibits such relief (Mastrobuono v Shearson Lehman Hutton, Inc, 514 US 52, 58, 60-61 (1995)). Furthermore, if the substantive law governing the contract allows for equitable remedies such as rectification, rescission, specific performance or an injunction, the tribunal can order those remedies (EGI-VSR, LLC v Coderch Mitjans, 963 F3d 1112, 1124 (11th Cir 2020) (confirming the grant of specific performance); Benihana, Inc v Benihana of Tokyo, LLC, 15-CV-7428, 2016 WL 3913599, at *1 (SDNY, 15 July 2016) (confirming the grant of a permanent injunction)). Finally, it has also been held that arbitrators have the power to fashion relief that a court might not properly grant (see Sperry Int’l Trade, Inc v Gov’t of Israel, 689 F2d 301, 306 (2d Cir 1982)).
(f) Interest?
The FAA does not specifically address the calculation of interest. However, courts routinely grant interest when ordering judgments on awards.