- Where parties find themselves embroiled in a dispute or closely related disputes involving multiple arbitrations, it can sometimes be desirable to consolidate the separate arbitrations into one arbitration.
- As a general rule (and, again, consistent with the notion that arbitration is a matter of contract and consensus), consolidation requires the consent of the parties involved.
- The advantages of consolidation may be fairly obvious. Under the right circumstances, consolidation can:
- Save valuable resources (e.g., time, money) by creating efficiencies that affect both the overall costs (e.g., administrative and arbitrator fees and expenses) and the parties’ respective fees and costs;
- Focus the parties’ larger strategies and objectives; and
- More easily rationalize, or even increase the likelihood of, settlement.
- Often, however, consolidation can create significant complexities. For example:
- Consolidation can often involve bringing otherwise unrelated (third) parties into a dispute. As a result, consolidation can threaten much-valued confidentiality;
- Given the business and legal complexities that often attend to even a single arbitration, consolidation can be difficult to accomplish well;
- Consolidation can have the effect of radically altering the dynamics between the parties. This may be viewed as either a positive or negative result, depending upon the particular circumstances surrounding the dispute(s);
- Although consolidation can have the overall effect of speeding up the process, effectuating a consolidation can itself take some time;
- There is some question whether a consolidation decision constitutes a “final” order under the New York Convention; and
- Consolidation can sometimes involves going back to “square one” with respect to the parties involved.
Ch. 20 Stages of the Arbitral Process
PETER SHERWIN, KENNETH E. ALDOUS