7. Arbitration is an amicable and neighbourly mode of Å¿ettling perÅ¿onal controverÅ¿ies, between individuals, by Å¿ubmiÅ¿Å¿ion to certain perÅ¿ons called arbitrators, and elected by the parties themÅ¿elves. It may with propriety be denominated a court created, conÅ¿tituted, and appointed by the parties, and the judges derive all their power and authority from the inÅ¿tructions which are given them. This mode of adjuÅ¿ting diÅ¿putes among mankind is Å¿o fair, liberal and friendly, that it is highly favoured by the law, and as the parties elect their own judges, courts are exceeding cautions about Å¿ettling aÅ¿ide their awards. Arbitrators are Å¿o called from their poÅ¿Å¿eÅ¿Å¿ing an arbitrary power, for while they keep within the limits of their inÅ¿tructions, their determinations are definitive, and Å¿ubject to no appeal: nor can their Å¿entences be reviewed or reconÅ¿idered by any court of law or equity. They are not tied down to the Å¿ame Å¿trictneÅ¿s, formality and preciÅ¿ion as courts of law. While they have greater latitude in the mode of proceeding than courts of law, they have ampler powers to do compleat and perfect juÅ¿tice between the parties in the deciÅ¿ion of the matters in diÅ¿pute. This freedom from legal formality and nicety, and this extenÅ¿ive latitude in the mode of proceeding, furniÅ¿h arbitrators with much better advantages to adjuÅ¿t and Å¿ettle long, intricate, and embarraÅ¿Å¿ed controverÅ¿ies, than courts of law can poÅ¿Å¿ibly have. Where there are a variety of controverÅ¿ies, arbitrators can comprehend them all under one Å¿ubmiÅ¿Å¿ion, and Å¿ettle them all by one deciÅ¿ion. They can make Å¿uch offsets and diÅ¿counts of mutual demands, and Å¿uch allowances reÅ¿pecting coÅ¿t, as are conÅ¿onant to the principles of equity. But if the parties are driven to their remedies at law, an action muÅ¿t be brought for each matter of diÅ¿pute, which muÅ¿t have diÅ¿tinct trials and determinations. 8
The legiÅ¿lature has Å¿o far favoured this mode of finiÅ¿hing controverÅ¿ies, that a Å¿tatute has been made enabling parties to make their Å¿ubmiÅ¿Å¿ion a rule of court, and then on the award of the arbitrators execution may be granted, and Å¿o in caÅ¿e of an action pending before the court, the parties may in like manner make a Å¿ubmiÅ¿Å¿ion.
The Å¿tatute law enacts, that all merchants and others deÅ¿iring to end any controverÅ¿y by arbitration, for which they have no other remedy but a perÅ¿onal action, or Å¿uit in equity, may agree that their Å¿ubmiÅ¿Å¿ion of the Å¿uit to the award, or umpirage of any perÅ¿ons, Å¿hall be made a rule of any of the Å¿uperior or county courts, which the parties Å¿hall chuÅ¿e, and may inÅ¿ert their agreement in their Å¿ubmiÅ¿Å¿ion, or the condition of their bond or promiÅ¿e, and upon producing an affidavit of Å¿uch agreement, and reading and filing the Å¿ame in the court, or perÅ¿onally appearing before Å¿aid court and acknowledging the Å¿ame, and deÅ¿iring the Å¿ame may be made a rule of court, the Å¿ame may be entered of record in Å¿uch court, and a rule of court Å¿hall therefore be made that the parties Å¿hall Å¿ubmit to, and finally be concluded by Å¿uch arbitration or umpirage, and on the award of Å¿uch arbitrators being returned into court, in caÅ¿e of diÅ¿obedience of either parties, Å¿aid court may grant execution for the Å¿um awarded, with coÅ¿t. When a perÅ¿onal action is pending before a court, the parties may make a reference of it, each chuÅ¿ing a man, and the court appointing a third; and the award made by Å¿uch referees, or any two of them, and returned into court, and accepted, Å¿hall be a final Å¿ettlement of the controverÅ¿y, and execution may be granted for the Å¿um awarded, with coÅ¿t.
The parties may appoint Å¿uch a number of arbitrators as they judge proper, but the uÅ¿ual cuÅ¿tom is to appoint three. When they appoint but one, he is called an umpire, and the proceeding an umpirage. Sometimes it is agreed by the parties, that if the arbitrators cannot agree, they Å¿hall call in an umpire, who Å¿hall determine the matter; but as the whole proceeding depends on the will of the parties, they can model the appointment as they pleaÅ¿e, and the arbitrators muÅ¿t purÅ¿ue their inÅ¿tructions. Where three or more arbitrators are appointed, it is uÅ¿ual to inÅ¿ert a clauÅ¿e in the Å¿ubmiÅ¿Å¿ion, that either two agreeing Å¿hall make an award. But if three or more are appointed, and nothing is Å¿aid in the Å¿ubmiÅ¿Å¿ion reÅ¿pecting 9 the number that muÅ¿t agree to make the award, it will be intended and preÅ¿umed to be the agreement of the parties, that the majority of the arbitrators agreeing, Å¿hall make an award.
A Å¿ubmiÅ¿Å¿ion contains the inÅ¿tructions to the arbitrators, and may be general, comprehending all matters of diÅ¿pute, or Å¿pecial, including only Å¿ome particular matter of diÅ¿pute, Å¿pecificated in the Å¿ubmiÅ¿Å¿ion. A Å¿ubmiÅ¿Å¿ion may be written or parol. In either caÅ¿e it muÅ¿t contain the appointment of the arbitrators, and the matter in diÅ¿pute that is Å¿ubmitted. If it be general, it is Å¿ufficient to Å¿ay all matters of diÅ¿pute; if it be Å¿pecial, the particular controverÅ¿y Å¿ubmitted muÅ¿t be deÅ¿cribed. It muÅ¿t point out the time and place of meeting, and the time when the award muÅ¿t be publiÅ¿hed. It is proper that the Å¿ubmiÅ¿Å¿ion Å¿hould aÅ¿certain the number of arbitrators, that muÅ¿t agree to make an award; and whether the award Å¿hall be in writing or by parol. If this be not regulated in the Å¿ubmiÅ¿Å¿ion, the rule is, that if the Å¿ubmiÅ¿Å¿ion be in writing, the award muÅ¿t be in writing; but if by parol, then a parol or written award will be good.
Every Å¿ubmiÅ¿Å¿ion to arbitrators implies an agreement and promiÅ¿e to abide the award that Å¿hall be publiÅ¿hed, if the parties make no expreÅ¿s promiÅ¿e. And upon a naked Å¿ubmiÅ¿Å¿ion without any promiÅ¿e to abide, action will be upon the award, in caÅ¿e of non-performance, and Å¿uch award will be a good bar to another action. In Å¿ubmiÅ¿Å¿ions however, it is the uÅ¿ual practice for the parties to become bound to each other, to abide Å¿uch award as Å¿hall be publiÅ¿hed; for this purpoÅ¿e the parties frequently enter into bonds, the conditions of which contain the articles of Å¿ubmiÅ¿Å¿ion, and the inÅ¿truction to the arbitrators. TheÅ¿e bonds are Å¿ometimes delivered to the arbitrators, third perÅ¿ons, or to the parties themÅ¿elves. In caÅ¿e of a delivery to the arbitrators, or third perÅ¿ons, if the parties abide the award, then the bonds are to be given up to them – if not, then to be delivered to the perÅ¿ons abiding the award; but it is moÅ¿t proper where bonds with conditions are executed, that they Å¿hould be delivered to the parties themÅ¿elves: for by the terms of the condition they are void if the party abides; and if not, then the party who refuÅ¿es to abide the award, is liable to the action of the other party, on Å¿uch bond, by force of which he may recover 10 the Å¿um awarded to him. But notwithÅ¿tanding the bond an action will lie upon the award, in caÅ¿e of non-performance to recover the Å¿um awarded.