Following a two-year endeavor by an internal working group, the American Arbitration Association (AAA) has revised its Commercial Arbitration Rules and Mediation Procedures, effective September 1, 2022. The revisions include the addition of new rules, as well as significant amendments to existing ones.
As described by the AAA, the amendments standardize some important and longstanding practices of the institution, as well as revise rules with a focus on process improvements.
Among the additions is new Rule R-8 on Consolidation and Joinder, which is the AAA’s first-ever commercial rule for the consolidation of existing arbitrations or the joinder of additional parties. It outlines the procedures by which “two or more arbitrations may be consolidated.” In summary, when there is disagreement among the parties regarding consolidation, the party seeking consolidation must make a written request, and the other parties must provide their written responses within the periods specified. The AAA has discretion to direct that the request be decided by the arbitrator appointed in the first-filed case or to appoint a consolidation arbitrator for the sole purpose of deciding the request. The rule provides a non-exhaustive list of relevant circumstances to be considered by the deciding arbitrator, namely:
a) The terms and compatibility of the agreements to arbitrate,
b) Applicable law,
c) The timeliness of the request to consolidate and the progress already made in the arbitrations,
d) Whether the arbitrations raise common issues of law and/or fact, and
e) Whether consolidation of the arbitrations would serve the interests of justice and efficiency.
With respect to joinder, the rule provides similarly detailed procedures. Additional parties may be joined if all parties to the arbitration and the parties proposed to be joined so agree. When there is no such consent, all written requests for joinder must be submitted to the AAA within a specified period, and the arbitrator decides whether parties should be joined. If an arbitrator has not yet been appointed at that time, the AAA may appoint an arbitrator for the sole purpose of deciding the joinder request.
Another addition is new Rule R-45 on Confidentiality, which evidences a commitment to the confidentiality of arbitration by, among other things, codifying existing obligations of AAA staff and arbitrators in requiring that the AAA and the arbitrator will keep confidential all matters relating to an arbitration or an award.
Further, other significant amendments to the arbitration rules include, for example:
- Updated Rule R-52, which now allows an arbitrator, upon a party’s request, to interpret the award, as well as to modify an award for clerical, typographical, or computational errors, which is what the arbitrator was empowered to do under the prior Rule-52;
- Updated Rules R-22 (formerly Rule R-21), R-25 (formerly Rule R-24), R-33 (formerly Rule R-32), and Expedited Procedure E-7, which expressly allow arbitrators to conduct hearings remotely by electronic means, and evidence an intention to allow for greater arbitrator discretion to determine the method of hearing; and
- Updated Rule R-34 (formerly Rule R-33), which now requires the arbitrator to consider the time and cost associated with the briefing of a dispositive motion when deciding a party’s request to file such a motion, and demonstrates an enhanced focus on efficiency and economy.
The foregoing is not an exhaustive list of all the changes, which have been summarized by the AAA in additional detail.
In sum, the updated rules appear to be a promising codification of already-standing practices, with a focus on efficiency and technological advances. They reflect many of the developments catalyzed by the COVID-19 pandemic and will likely serve as an important benchmark for arbitration in a post-pandemic world.
The updated Commercial Arbitration Rules and Mediation Procedures are available online on the AAA’s website.
Client Alert 2022-225
