Commercial arbitration can be a more efficient route to dispute resolution than litigation. Document production and examination of witness requirements are narrower, parties have more control of the process and there are fewer delays because of scheduling issues. As a result, the timelines are shorter and disputes are resolved more rapidly. At least in theory.
In reality, delays can still obstruct the arbitration process and, when faced with delays, you may not have the same remedies at your disposal as in litigation. If you are defending a claim in court and the plaintiff delays the process, you can eventually ask the court to dismiss the claim for "want of prosecution" — because the plaintiff has not been diligent in prosecuting its claim. If the court considers that the delay is inordinate and inexcusable, and has caused you harm, it can dismiss the claim. Essentially, the court has the power to decide whether it is fair for a plaintiff to continue its claim against a defendant after delaying for a long time without good reason.
But what if that situation arises in an arbitration? Does an arbitrator have the power to dismiss the arbitration when a claimant causes delay? A recent decision has confirmed that in British Columbia an arbitrator does not. In that case a dispute arose between a warehousing company and two manufacturers. It went to arbitration in June 2000. The arbitrator decided the liability issue, but not damages. Further work was required to calculate damages. But the years passed and no formal steps were taken. Then, in June 2009 the warehousing company delivered a report calculating its damages. The manufacturers asked the arbitrator to dismiss the arbitration because of the lengthy delay.
Even though the arbitrator thought that the delay was lengthy, inexcusable and harmful to the manufacturers, he concluded he did not have power to dismiss the arbitration. He said that an arbitrator, unlike a judge, only has the powers given him by the applicable statute and the rules chosen by the parties in their arbitration agreement. In that case that statute and those rules did not give him the necessary power.
The law in this area is in a formative stage. In general, parties to arbitration are both expected to move the matter forward. In specific cases, the arbitrator can "terminate" the arbitration, such as where the claimant fails to comply with an order or the rules chosen by the parties, or where the arbitrator finds that the proceedings have become unnecessary or impossible. But a termination is different from a dismissal—it is a neutral term indicating the process is finished, and does not have the same force as the dismissal of a claim. Dismissing a claim is something, generally speaking, an arbitrator cannot do.
Bottom line: Keep in mind, when deciding whether to arbitrate disputes as opposed to litigating them, that the very differences between arbitration and litigation which make arbitration attractive may change the procedural remedies for delay available to you. Consider also whether to include in your arbitration agreement an express provision modifying the chosen arbitration rules to give the arbitrator the power to dismiss a claim for delay.
If your commercial arbitration is stalled, get the arbitrator involved. Make sure the arbitrator knows about any delays caused by the other parties. Have a teleconference or hearing to voice your complaints about the process. Ask for a tight schedule and ensure that it is followed.
If you are defending the arbitration, it may be in your best interest to let it lie. But do not forget the harm you yourself can suffer from delay, such as fading witness memories and loss of documents.