Arbitration is an alternative dispute resolution process wherein parties to a dispute agree to have the matter decided by impartial third party arbitrators. An arbitration panel refers to all of the named arbitrators, collectively in their quasi-judicial capacity, who have been appointed to hear the matter and render a decision. The composition of an arbitration panel and the manner in which panel members are selected, will typically depend on the parties, the nature of the controversy, and whether one or both of the parties was compelled to arbitrate the dispute due to a binding provision in a commercial or consumer contract.
If the parties are not bound by the terms of a contractual arbitration clause, they are free to voluntarily agree to mutually select a panel of arbitrators to hear their case. Often an arbitration clause in a contract will stipulate that the arbitration will be conducted in accordance with the rules of a particular industry or non-profit forum. In the absence of a contractual provision that designates a particular forum, some arbitration clauses will explicitly state the manner in which an arbitration panel will be selected.
In most cases, the forum in which the arbitration will be heard provides the parties with a list of arbitrators from which they can select a full panel. In other cases, the forum will select the panel members, subject to any challenges by either party for cause, or if allowed, on a peremptory basis. If the parties cannot agree on the composition of an arbitration panel, the forum will usually appoint the panel, or the remaining members for the parties.
In order to maintain the integrity and impartiality of the arbitration process, arbitrators who are being considered to serve on a panel are ethically bound to disclose to the parties any existing or potential conflicts of interest. This obligation continues, if during the hearing, additional conflicts are revealed. Most reputable forums require the arbitrators on their roster to provide detailed information concerning their background and professional experience.
For some arbitrable controversies, the rules of the forum may provide the parties with an expedited process, whereby the controversy is settled by a single arbitrator. Most arbitrations are conducted before a panel of three, and sometimes five, arbitrators. The particular rules of the designated forum will usually determine whether the arbitration panel will be comprised of three or five members.
Many forums will select one of the appointed arbitrators to serve as chairman. The duties of the chairman include maintaining order and decorum during the proceedings, keeping a list of all exhibits offered into evidence, and ruling on objections and any other procedural matters made by a party during the hearing. A chairman typically will also resolve any pre-hearing issues that may arise.