American Arbitration Association ("AAA")

Below you will find a concise overview of the key procedural features, advantages, disadvantages, and practical considerations involved in arbitrations administered by the American Arbitration Association ("AAA").

Overview

Overview: advantages and disadvantages

ADVANTAGES	DISADVANTAGES
Flexibility. Most of the rules in an AAA proceeding are decided by the parties. Arbitrators also have considerable discretion under the rules to structure a proceeding to meet the parties' needs.	Arbitrator selection. In the event of an impasse between the parties, the AAA may unilaterally appoint an arbitrator that neither party requested.
Privacy and confidentiality. The default position is that AAA arbitration proceedings are private. Parties generally agree that the proceedings shall remain confidential.	Limited Appeal or Review Mechanisms. Like most arbitration, AAA awards are final and binding, with very limited grounds for appeal or challenge.
Efficiency. As a result of the AAA's flexibility and its arbitrators' discretion, parties can more expeditiously argue the merits of their respective cases	Scrutiny. The AAA has no role in scrutinising awards.
Expertise. AAA has operated since 1926 and has administered over 8.5 million cases. In addition, it offers arbitrators with knowledge covering several different industries
Enforcement. Arbitration awards issued under AAA Rules are recognised and enforceable internationally under the New York Convention.

Overview: Process

Procedural element	Details
Rules	The AAA has established several sets of rules. The most commonly used rules include the AAA Commercial Rules and the AAA-ICDR International Arbitration Rules.
Commencing Proceedings	The process is started when a party files a Demand for Arbitration with the AAA. The filing fee must be paid before a matter is considered properly filed.
Response to the Notice of Arbitration	To be submitted within 14 days from date of notice of the Demand.
Constitution of the Tribunal	Unless parties have agreed otherwise, the AAA will provide the parties with an identical list of 10 names from the National Roster. The parties are encouraged to agree to an arbitrator from the submitted list and to advise the AAA of their agreement.
Procedural Order No. 1	The arbitrator, in consultation with the parties, shall establish a procedural order, including a timetable, for completion of any written submissions.
Procedural measures	The general procedure to be adopted for proceedings is set out in Commercial Rule 33. However, the arbitrator has discretion to vary this procedure. The arbitrator has discretion to conduct the proceedings in such a way as to expediting the resolution of the dispute.
Witness evidence	Witnesses are required to submit to questioning from the arbitrator and the other party. The arbitrator has discretion to vary this procedure provided that all parties are treated with equality and each party has the right to be heard and given a fair opportunity to present its case.
Fees & costs	The AAA will require the parties to deposit in advance of any hearings such sums of money as it deems necessary to cover the expense of the arbitration. The AAA will allocate the deposits requested among the parties.

Expedited arbitrations

Unless the parties agree otherwise (or the AAA determined otherwise) the Expedited Procedure shall apply in any case where the claim does not exceed $100,000.

Parties may agree to use the Expedited Procedure in larger cases.

Unless otherwise agreed, the Expedited Procedure will not apply to cases involving more than two parties.

Constitution of the tribunal

The AAA maintains a National Roster of Arbitrators and appoints arbitrators from that list.

If the parties are unable to agree upon an arbitrator, each party to the dispute shall have 14 calendar days in which to strike names objected to, number the remaining names in order of preference, and return the list to the AAA.

The AAA may limit the number of strikes permitted.

Note: Emergency Arbitrators

AAA allows the appointment of emergency arbitrators. The procedure for applying for the appointment of an emergency arbitrator is set out at Commercial Rule 39. A party in need of emergency relief prior to the constitution of the panel shall notify the AAA and the other parties in writing.

Arbitrator conflicts / disclosure of interest

Any person appointed or to be appointed as an arbitrator, as well as the parties and their representatives, shall disclose to the AAA any circumstance likely to give rise to justifiable doubt as to the arbitrator’s impartiality or independence, including any bias or any financial or personal interest in the result of the arbitration or any past or present relationship with the parties or their representatives.

Such obligation shall remain in effect throughout the arbitration.

Failure on the part of a party or a representative to comply with the requirements of this Rule may result in the waiver of the right to object to an arbitrator.

Note:

The 2024 IBA Guidelines on Conflicts of Interest in International Arbitration are also applied in practice. A link to those IBA Guidelines can be accessed here.

Consolidation

Two or more arbitrations may be consolidated if all parties to all of the arbitrations to be consolidated so agree.

If one party files a request for consolidation, an arbitrator will consider:

1. The terms and compatibility of the agreements to arbitrate.

2. Applicable law.

3. The timeliness of the request to consolidate and the progress already made in the arbitrations.

4. Whether the arbitrations raise common issues of law and/or fact.

5. Whether consolidation of the arbitrations would serve the interests of justice and efficiency.

Pleadings or memorial?

The Rules do not expressly specify whether a dispute should proceed pursuant to pleadings or Memorial style. However, the rules allow for the consideration of evidence and dispositive motions through the course of the proceedings.

Summary judgment

The arbitrator may allow the filing of and make rulings upon a dispositive motion only if the arbitrator determines the moving party has shown that the motion:

1. is likely to succeed; and

2. is likely to dispose of or narrow the issues in the case.

Security for costs

The Rules do not provide for the option to seek security for costs.

Disclosure of documents

The Rules do not provide for the mandatory disclosure of documents.

An arbitrator may subpoena witnesses or documents at the of any party or independently.

Hearings

The parties may agree to waive oral hearings.

The parties may also conduct certain conferences and hearings remotely

Scrutiny of arbitral awards

The AAA does not have any role in scrutinising arbitral awards.

Appeals

The Optional Appellate Arbitration Rules provide that the parties may agree to the option to challenge an arbitral award. However, the parties must have agreed by contract or stipulation to allow for appeal of the arbitration award.

Further information

Model clause

Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

If you would like any further information about AAA arbitrations, please contact Greg Lahr at glahr@dacbeachcroft.com.

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