Answer ... (a) Procedure, including evidence?
The FAA does not refer to rules of evidence except to provide, in Section 10(a)(3), that 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)). The parties are free to address evidentiary matters in their agreement and incorporate institutional arbitral rules that address document disclosure. Arbitral tribunals typically do not follow the Federal Rules of Evidence or the Federal Rules of Civil Procedure.
Section 7 of the FAA (9 USC § 7) provides that “[t]he 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”. Courts are divided as to whether arbitrators can order the production of documents before the hearing or order witnesses to appear for a pre-hearing deposition. Some courts, including the Second Circuit, have held that the FAA 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)).
(b) Interim relief?
It is generally accepted that arbitrators have inherent authority to order interim or preliminary relief pending a final award. Arbitrators may also have express authorisation to order interim relief by the terms of the arbitration agreement and/or the terms of the chosen arbitral rules (see AAA Arbitration Rule R-37(a): “The arbitrator may take whatever interim measures he or she deems necessary”). Interim relief may also include preliminary injunctions and temporary restraining orders, as well as measures intended to preserve evidence.
(c) Parties which do not comply with its orders?
Under Section 7 of the FAA (9 USC § 7), when 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. If the subpoenaed party does not comply with the court order, the party may be held in contempt. However, Section 7 does not provide an independent grant of federal subject-matter jurisdiction.
(d) Issuing partial final awards?
The FAA refers to final and partial awards. Section 16, for example, which concerns appeals, expressly allows an appeal from both a final and a partial award.
The JAMS arbitration rules provide that arbitrators can “render a Final Award or a Partial Final Award” (JAMS Comprehensive Arbitration Rules and Procedures, Rule 24(a) (2014)). Courts have enforced arbitrators’ partial awards that have, among other things:
- removed a lien on a vessel;
- ordered accountings;
- required that documents be produced;
- ordered the sale of property;
- determined that claims were not time barred; and
- required that tax records be made available.
The interim award must fully 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) (order of arbitrator requiring defendant to place letter of credit in escrow pending final determination was “a final Award on a clearly severable issue”); Southern Seas Navigation Ltd of Monrovia v Petroleos Mexicanos of Mexico City, 606 F Supp 692, 694 (SDNY 1985) (“[j]ust as a district court’s grant of a preliminary injunction is reviewable as a discreet and separate ruling…so too is an arbitration award granting similar equitable relief”)). State arbitration laws may differ (eg, see Kaiser Foundation Health Plan, Inc v Superior Court, 13 Cal App 5th 1125 (Ct App 2017) (partial final arbitration award lacked finality under the state arbitration statute and could not be appealed, but was subject to mandamus jurisdiction)).
(e) The remedies it can grant in a final award?
The FAA does not limit the remedies available in arbitration. Subject to the parties’ agreement, arbitrators may award any type of relief, including damages, specific performance, injunctions, interest, costs and attorneys’ fees. On the other hand, an arbitration agreement that expressly eliminates certain relief will be enforced (Archer & White Sales v Henry Schein, Inc, 878 F3d 488 (5th Cir 2017) (enforcing the terms of an agreement that eliminated injunctive relief as an available remedy), petition for cert granted on other grounds, 2018 WL 1280843 (25 June 2018)). The Supreme Court has held that under the FAA, 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)). The AAA Arbitration Rules permit any relief deemed “just and equitable” within the scope of the parties’ agreement (Rule R-47(a)).
The FAA does not address interest. Whether interest is permitted and at what rate will depend on the agreement of the parties, the applicable institutional rules and the substantive law governing the contract. AAA Arbitration Rule R-47(d)(i), for example, permits the inclusion of interest in the award “from such date as the arbitrator(s) may deem appropriate” (see Bergheim v Sirona Dental Sys, Inc, 2017 WL 354182, at *4 (SDNY 24 January 2017) (“There is a presumption in favor of awarding pre-judgment interest running from the time of the award through the court’s judgment confirming the award, at a rate prescribed by the state statutory law governing the contract”)).
Federal law controls post-judgment interest in federal cases, including cases based on diversity of citizenship. Under federal law, once a court judgment confirming the award is entered, the award is merged into the judgment and the interest rate is governed by the federal post-judgment interest rate statute (28 USC § 1961) (see Bayer Cropscience AG v Dow Agrosciences LLC, 680 Fed App’x 985, 1000 (Fed Cir 2017): “Numerous circuits have concluded that once a federal court confirms an arbitral award, the award merges into the judgment and the federal rate for post-judgment interest presumptively applies”). The parties may contract around the statute if they clearly and expressly agree on a different post-judgment interest rate and that rate is consistent with state usury laws. Alternatively, they can agree to submit the question of post-judgment interest to arbitration.