January 1, 1913.] 



THE INDIA RUBBER WORLD 



213 



Commercial Arbitration: A Hopeful Outlook. 



By Charles L. Bernheimer in the "Independent." 



TV/ HEN the New York Chamber of Commerce turned its 

 ^ attention to commercial arbitration, the fundamental and 

 controlling purpose was to find a remedy for the law's delays, 

 which President Taft, before his inauguration and many times 

 since, declared "Amount in many cases to a denial of justice." 

 In the final analyses one could hardly be charged with over- 

 statement in saying that the law's delays are at the bottom of 

 many of our present civic, political and economic disorders. 



During the one hundred and forty years of its existence, the 

 Chamber of Commerce has attempted to provide commercial 

 arbitration in three distinct ways : The first failed because no 

 method to enforce the award was provided; the other two 

 because they attempted too much, for the promoters had in 

 mind a Court of Commerce for merchants exclusively, fashioned 

 after the Old World Handelsgerichte and Tribunaux de Com- 

 merce. Differences in laws, customs and viewpoints made such 

 a scheme impracticable in our country. 



A more modest attempt seemed in order, and quite within 

 the realm of practicability. The controlling features of the plan 

 now in operation under the aegis of the Chamber of Commerce, 

 are the following : 



First : Strict adherence to the provisions of the Code of Civil 

 Procedure as found, and acceptance of their opportunities and 

 obligations. 



Second : Formal submission of the dispute, strictly in ac- 

 cordance with the formalities and safeguards prescribed by the 

 existing law. 

 Third : Provision for a list of official arbitrators. 

 Fourth: Waiver of the revocation provision in the law; we 

 are, of course, aware that there is still some question as to 

 whether this right to revoke can be waived, but dependence 

 has been placed upon the honor of those submitting to a 

 tribunal instituted by and composed of fair-minded, public- 

 spirited fellow merchants. Nothing in our experience has yet 

 occurred to lessen this faith. 



These are some of the things the New York Chamber's sys- 

 tem actually accomplishes : 



It saves money, time and trouble to the merchant, law office 

 and State. It supplies "technical" skill for judicial decisions 

 because, with the large membership of the Chamber (covering 

 practically every phase of business and commercial life) the 

 disputants can select arbitrators specially familiar with the 

 technical and industrial data of the specific business involved. 



It affords a medium for conciliation : The antagonism present 

 in a lawsuit is lacking. Instead there is in the attempt at 

 arbitration itself — a recognition of and respect by each side 

 for the other'^ contention. In the atmosphere of openminded- 

 ness thus created, an amicable adjustment is frequently reached 

 without actual arbitration. 



It assures an absolutely impartial award — one that commands 

 the respect of the disputants, the courts and the legal profession. 

 It establishes commercial equity: It applies the rule of 

 reason to the actual facts, and it renders an award that is final 

 and binding, one that lias the force and effect of a Supreme^ 

 Court decision. It admits of the disposal of a dispute within 

 a short time, sometimes within twenty-four hours after it 

 arises. 



It offers the disputants the opportunity to select their own 

 court, judge and jury; to designate the time of trial and hear- 

 ing. They may, before the arbitrators selected by them, sub- 

 poena witnesses and compel the production of books and papers 

 as they could in a court of law. 



The number of cases that can be handled simultaneously by 

 the Chamber is limited only by the number of arbitrators on the 

 "official list," and this may be extended to include as many as 

 fifteen hundred names. 



The procedure is exceedingly informal. Usually the parties 

 communicate with the Chamber for information ; then they are 

 referred to the chairman of the arbitration committee and sup- 

 plied with a handbook of arbitration. The chairman arranges 

 a meeting — with both parties, where possible — and, after hear- 

 ing an explanation of the matter, endeavors to bring about a 

 settlement "out of court," if he can. In other words, he 

 attempts by conciliation to avoid both arbitration and litigation 

 — as would a conscientious lawyer. And in a large number 

 of the cases considered, such informal hearings have brought a 

 satisfactory adjustment. 



If arbitration is finally determined upon, the parties decide 

 through which of the three methods available the arbitration 

 is to proceed. A formal submission signed by both parties is 

 placed before the committee on arbitration, which first judges 

 whether or not the case is one that they can handle. The rules 

 permit them to decline a case for any reason that appears to 

 them good and sufficient. 



The date of the hearing is set for a time that will suit all 

 concerned — arbitrators and disputants. It takes place in one 

 of the rooms of the Chamber of Commerce; the hearings and 

 results are private, and are inaccessible even to the members of 

 the Chamber expect by order of the arbitration committee. 



In proceeding the arbitrator is sworn in before a notary or 

 justice of the court; the arbitrator in turn places the witnesses 

 under oath. The arbitrator then asks either of the parties to 

 acknowledge the genuineness of the submission and to explain 

 the situation in his own way, just as he views it, and also to 

 present any documentary evidence he desires, and, if he has 

 witnesses, to produce them. After the witnesses have been duly 

 sworn, their testimony is taken. The same general method is 

 followed in hearing the opposition. An informal cross-exam- 

 ination, or any other form of investigation best suited, follows, 

 of course with the assent of both parties, under the control of 

 the arbitrator. The proceedings are taken down by a court 

 stenographer, and the award, including disposition of the ex- 

 pense item, is carefully worded and forwarded to both parties. 

 When the submission is handed in a deposit of $60 is required 

 from each party. This serves to defray incidental expenses, 

 such as stenographer's fees and $10 per day — the compensa- 

 tion of each arbitrator. The arbitrator decides in his written 

 award how this shall be paid and by whom. Any balance is 

 returned to the parties. 

 This ends the work of the Chamber. 



The law provides that the prevailing party may file the award 

 with the Supreme Court any time within a year, and obtain 

 judgment thereon. The court must confirm the award unless 

 it is not in accord with the submission, or was obtained by fraud 

 or undue influence, or shows partiality; or in case adjourn- 

 ments were warranted and were refused. Should the award 

 of the arbitrator contain errors that do not affect the merits 

 of the decision upon the matters submitted, the court must 

 modify or correct them. Ordinarily (invariably, so far in our 

 experience) the award has been complied with without an 

 application to the court. 



Arbitration by the Chamber is not limited to its members. 

 nor even to citizens of this country. It serves impartially 

 every business man bringing to it his honest differences with 



