[Federal Register Volume 66, Number 161 (Monday, August 20, 2001)]
[Rules and Regulations]
[Pages 43511-43516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-20755]


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FEDERAL MARITIME COMMISSION

46 CFR Part 502

[Docket No. 01-05]


Alternative Dispute Resolution

AGENCY: Federal Maritime Commission.

ACTION: Final rule.

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SUMMARY: The Federal Maritime Commission is issuing new regulations 
implementing the Administrative Dispute Resolution Act. The new 
regulations expand the Commission's Alternative Dispute Resolution 
(``ADR'') services, addressing guidelines and procedures for 
arbitration and providing for mediation and other ADR services. This 
rule replaces current subpart U--Conciliation Service, with a new 
subpart U--Alternative Dispute Resolution, that contains a new 
Commission ADR policy and provisions for various means of ADR. The rule 
also revises certain other regulations to conform to the Commission's 
new ADR policy.

DATES: Effective: August 20, 2001.

FOR FURTHER INFORMATION CONTACT: Bryant L. VanBrakle, Secretary, 
Federal Maritime Commission, 800 North Capitol Street, NW, Room 1046, 
Washington, DC 20573-0001, 202-523-5725, E-mail: [email protected].

SUPPLEMENTARY INFORMATION: The Administrative Dispute Resolution Act 
(``ADRA'') was first promulgated in 1990 (Pub. L. 101-552), and 
subsequently amended in 1996 (Pub. L. 104-320). It defines ADR to mean 
any procedure that is used to resolve issues in controversy, including, 
but not limited to, conciliation, facilitation, mediation, fact-
finding, minitrials, arbitration, and use of ombuds, or any combination 
thereof, 5 U.S.C. 571 (3).
    The Federal Maritime Commission intends to expand the ADR services 
available from the Commission. Accordingly, the Commission published a 
notice of proposed rulemaking on May 21, 2001, 66 FR 27921, to amend 
part 502 of the Commission's rules.
    The Commission received comments in response to the proposed rule 
from the National Customs Brokers and Forwarders Association of 
America, Inc. (``NCBFAA'') and Charles L. Measter, a member of the 
Society of Maritime Arbitrators Inc. (``SMA'').

[[Page 43512]]

    NCBFAA states that it supports the policy behind the proposal, as 
well as most of the proposed provisions. However, NCBFAA makes three 
suggestions. First, NCBFAA takes issue with proposed Sec. 502.406(a)(1) 
and suggests it be deleted. Second, NCBFAA does not believe the 
proposed rule provides for the use of discovery in arbitration 
proceedings, and believes the availability of discovery in such 
proceedings should be provided for in the rule. Third, NCBFAA believes 
it important that the rule provide for the taking of sworn testimony in 
arbitration proceedings.
    NCBFAA appears to read proposed Sec. 502.406(a)(1) as barring the 
use of ADR procedures whenever a component of the Commission is a 
party, and urges that the exemption of the Commission and its 
components as parties in Sec. 502.406(a)(1) be deleted. However, that 
provision bars the Commission or one of its components from 
participating as a party only in arbitration proceedings. The 
Commission concurs with NCBFAA that mediation can be an effective way 
to resolve disputes, even when a component of the Commission is a 
party. The proposed rule would allow for the use of mediation or other 
means of assisted negotiation in such situations. Under the ADRA, 
however, before the Commission or one of its components, as a party, 
could agree to arbitrate a matter, the Commission must develop and 
issue guidance on the appropriate use of binding arbitration, including 
when an officer or employee of the Commission has authority to settle 
an issue in controversy through binding arbitration. Such guidance must 
be issued prior to the use of binding arbitration and after 
consultation with the Attorney General. See 5 U.S.C. 575(c). The 
Commission has not sought to obtain approval of such provisions by the 
Department of Justice. Moreover, the Commission would not be in a 
position to review an arbitrator's decision, as it is with respect to 
the initial decision of an Administrative Law Judge in a Commission 
proceeding. The Commission is not ready at this time to issue a rule 
providing for Commission components to participate in arbitration. 
Rather, the Commission encourages its components to engage in mediation 
or any other of the various forms of assisted negotiation.
    The Commission sees no reason why discovery could not be held or 
sworn testimony be taken within an arbitration proceeding. Proposed 
Sec. 502.407 would provide authority to the arbitrator to regulate the 
course of arbitral hearings and administer oaths and affirmations. The 
intent behind an arbitration proceeding is to resolve an issue in 
controversy in a more expeditious and less costly manner than would 
litigation generally. Extensive discovery therefore is discouraged in 
an arbitration proceeding, even though some discovery may be necessary. 
Prior to an arbitration, the parties may agree to a discovery process, 
including limitations therein. To the extent the discovery process is 
not controlled by an agreement to arbitrate, the Commission anticipates 
that the arbitrator may make rulings with respect to discovery under 
his authority to regulate the course of the hearing. Also, the 
arbitrator would be empowered to require testimony under oath.
    Mr. Measter states that he is a member of SMA, the members of which 
he states have expertise in arbitration and mediation. He states that 
he believes the proposed rule is workable and within the generally 
accepted practice in the ADR field. He does not believe that members of 
the Commission's staff should serve as neutrals. He posits that SMA 
could provide neutrals and even administer the program, even though he 
also thinks that Commission staff members could administer the process.
    Under the ADRA, 5 U.S.C. 573, and proposed Sec. 502.404(a), a 
neutral may be a Federal Government officer or employee or any other 
individual acceptable to the parties, as long as the neutral is without 
official, financial, or personal conflict of interest or any such 
conflict of interest has been fully disclosed in writing and is 
acceptable to all parties. Moreover, the proposed rule provides for 
appointment of neutrals acceptable to the parties. The parties may 
select a neutral that is not a Commission employee or official. In such 
event, under Sec. 502.404(d) the fees and expenses would be borne by 
the parties as they agree. Accordingly, the proposed rule would not 
prevent parties from using ADR services of organizations like SMA. 
Indeed, the Commission encourages parties to seek ADR services to 
resolve disputes prior to bringing them to the Commission. When such a 
dispute is before the Commission or its staff, however, the Commission 
would make personnel available for ADR services should the parties so 
desire.
    The rule contains no additional information collection or record 
keeping requirements and need not be submitted to OMB for approval 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq.
    In accordance with the Regulatory Flexibility Act, 5 U.S.C. 601 et 
seq., the Chairman of the Federal Maritime Commission has certified to 
the Chief Counsel for Advocacy, Small Business Administration, that the 
rule will not have a significant impact on a substantial number of 
small entities. In its Notice of Proposed Rulemaking, the Commission 
stated its intention to certify this rulemaking since the rule creates 
new service options that are voluntary to all ocean shipping entities, 
including small businesses. The rule benefits small entities by 
expediting the complaint process, reducing costs, and increasing the 
Commission's assistance. As no comments refuted this determination, the 
certification remains unchanged. This regulatory action is not a 
``major rule'' under 5 U.S.C. 804(2).

List of Subjects in 46 CFR Part 502

    Administrative practice and procedure, Claims, Equal access to 
justice, Investigations, Lawyers, Maritime carriers, Penalties, 
Reporting and recordkeeping requirements.

    Therefore, for the reasons set forth above, 46 CFR part 502 is 
amended as set forth below:

PART 502--RULES OF PRACTICE AND PROCEDURE

    1. The authority citation is revised to read:

    Authority: 5 U.S.C. 504, 551, 552, 553, 556(c), 559, 561-569, 
571-596; 5 U.S.C. 571-584; 12 U.S.C. 1141j(a); 18 U.S.C. 207; 26 
U.S.C. 501(c)(3); 28 U.S.C. 2112(a); 31 U.S.C. 9701; 46 U.S.C. app. 
817d, 817e, 1114(b), 1705, 1707-1711, 1713-1716; E.O. 11222 of May 
8, 1965, 30 FR 6469, 3 CFR, 1964-1965 Comp. P. 306; 21 U.S.C. 853a; 
Pub. L. 105-258, 112 Stat. 1902.


    2. Section 502.61 is amended by revising paragraph (d) to read as 
follows:


Sec. 502.61  Proceedings.

* * * * *
    (d) All orders instituting a proceeding or noticing the filing of a 
complaint will contain language requiring that at an early stage of the 
proceeding and when practicable the parties shall consider the use of 
alternative dispute resolution in such manner as the presiding officer 
shall direct and further requiring that hearings shall include oral 
testimony and cross-examination in the discretion of the presiding 
officer only upon proper showing that there are genuine issues of 
material fact that cannot be resolved on the basis of sworn statements, 
affidavits, depositions, or other documents, or that the nature of the 
matter in issue is such that an oral hearing and cross-examination are 
necessary for the development of an adequate record. [Rule 61.]

[[Page 43513]]


    3. Section 502.62 is amended by redesignating paragraphs (e) 
through (h) as paragraphs (f) through (i) and adding a new paragraph 
(e) to read as follows:


Sec. 502.62  Complaints and fee.

* * * * *
    (e) Complainant(s) must state whether informal dispute resolution 
procedures were used prior to filing the complaint and whether 
complainant(s) consulted with the Commission Dispute Resolution 
Specialist about utilizing alternative dispute resolution (ADR) under 
the Commission's ADR program.
* * * * *

    4. Section 502.91 is amended by revising current paragraph (d) and 
adding new paragraphs (e) and (f) to read as follows:


Sec. 502.91  Opportunity for informal settlement.

* * * * *
    (d) As soon as practicable after the commencement of any 
proceeding, the presiding judge shall direct the parties or their 
representatives to consider the use of alternative dispute resolution, 
including but not limited to mediation, and may direct the parties or 
their representatives to consult with the Federal Maritime Commission 
Alternative Dispute Resolution Specialist about the feasibility of 
alternative dispute resolution.
    (e) Any party may request that a mediator or other neutral be 
appointed to assist the parties in reaching a settlement. If such a 
request or suggestion is made and is not opposed, the presiding judge 
will appoint a mediator or other neutral who is acceptable to all 
parties, coordinating with the Federal Maritime Commission Alternative 
Dispute Resolution Specialist. The mediator or other neutral shall 
convene and conduct one or more mediation or other sessions with the 
parties and shall inform the presiding judge, within the time 
prescribed by the presiding judge, whether the dispute resolution 
proceeding resulted in a resolution or not, and may make 
recommendations as to future proceedings. If settlement is reached, it 
shall be submitted to the presiding judge who shall issue an 
appropriate decision or ruling. All such dispute resolution proceedings 
shall be subject to the provisions of subpart U.
    (f) Any party may request that a settlement judge be appointed to 
assist the parties in reaching a settlement. If such a request or 
suggestion is made and is not opposed, the presiding judge will advise 
the Chief Administrative Law Judge who may appoint a settlement judge 
who is acceptable to all parties. The settlement judge shall convene 
and preside over conferences and settlement negotiations and shall 
report to the presiding judge within the time prescribed by the Chief 
Administrative Law Judge, on the results of settlement discussions with 
appropriate recommendations as to future proceedings. If settlement is 
reached, it shall be submitted to the presiding judge who shall issue 
an appropriate decision or ruling. [Rule 91].

    5. Section 502.94 is amended by revising paragraph (c) to read as 
follows:


Sec. 502.94  Prehearing conference.

* * * * *
    (c) At any prehearing conference, consideration shall be given to 
whether the use of alternative dispute resolution would be appropriate 
or useful for the disposition of the proceeding whether or not there 
has been previous consideration of such use.

    6. Section 502.301 is amended by revising paragraph (b) to read as 
follows:


Sec. 502.301  Statement of policy.

* * * * *
    (b) With the consent of both parties, claims filed under this 
subpart in the amount of $50,000 or less will be decided by a 
Settlement Officer appointed by the Federal Maritime Commission 
Alternative Dispute Resolution Specialist, without the necessity of 
formal proceedings under the rules of this part. Authority to issue 
decisions under this subpart is delegated to the appointed Settlement 
Officer.
* * * * *

    7. Subpart U is revised in its entirety to read as follows:
Subpart U--Alternative Dispute Resolution
Sec.
502.401   Policy.
502.402   Definitions.
502.403   General authority.
502.404   Neutrals.
502.405   Confidentiality.
502.406   Arbitration.
502.407   Authority of the arbitrator.
502.408   Conduct of arbitration proceedings.
502.409   Arbitration awards.
502.410   Representation of parties.
502.411   Mediation and other alternative means of dispute 
resolution.

Subpart U--Alternative Dispute Resolution


Sec. 502.401  Policy.

    It is the policy of the Federal Maritime Commission to use 
alternative means of dispute resolution to the fullest extent 
compatible with the law and the agency's mission and resources. The 
Commission will consider using ADR in all areas including workplace 
issues, formal and informal adjudication, issuance of regulations, 
enforcement and compliance, issuing and revoking licenses and permits, 
contract award and administration, litigation brought by or against the 
Commission, and other interactions with the public and the regulated 
community. The Commission will provide learning and development 
opportunities for its employees to develop their ability to use 
conflict resolution skills, instill knowledge of the theory and 
practice of ADR, and to facilitate appropriate use of ADR. To this end, 
all parties to matters under this part are required to consider use of 
a wide range of alternative means to resolve disputes at an early 
stage. Parties are encouraged to pursue use of alternative means 
through the Commission's Bureau of Consumer Complaints and Licensing in 
lieu of or prior to initiating a Commission proceeding. All employees 
and persons who interact with the Commission are encouraged to identify 
opportunities for collaborative, consensual approaches to dispute 
resolution or rulemaking.


Sec. 502.402  Definitions.

    (a) Alternative means of dispute resolution means any procedure 
that is used to resolve issues in controversy, including, but not 
limited to, conciliation, facilitation, mediation, factfinding, 
minitrials, arbitration, and use of ombuds, or any combination thereof;
    (b) Award means any decision by an arbitrator resolving the issues 
in controversy;
    (c) Dispute resolution communication means any oral or written 
communication prepared for the purposes of a dispute resolution 
proceeding, including any memoranda, notes or work product of the 
neutral, parties or nonparty participant; except that a written 
agreement to enter into a dispute resolution proceeding, or final 
written agreement or arbitral award reached as a result of a dispute 
resolution proceeding, is not a dispute resolution communication;
    (d) Dispute resolution proceeding means any process in which an 
alternative means of dispute resolution is used to resolve an issue in 
controversy in which a neutral is appointed and specified parties 
participate;
    (e) In confidence means, with respect to information, that the 
information is provided--
    (1) With the expressed intent of the source that it not be 
disclosed; or

[[Page 43514]]

    (2) Under circumstances that would create the reasonable 
expectation on behalf of the source that the information will not be 
disclosed;
    (f) Issue in controversy means an issue which is material to a 
decision concerning a program of the Commission, and with which there 
is disagreement--
    (1) Between the Commission and persons who would be substantially 
affected by the decision; or
    (2) Between persons who would be substantially affected by the 
decision;
    (g) Neutral means an individual who, with respect to an issue in 
controversy, functions specifically to aid the parties in resolving the 
controversy; and
    (h) Person has the same meaning as in 5 U.S.C. 551(2).


Sec. 502.403  General authority.

    (a) The Commission intends to consider using a dispute resolution 
proceeding for the resolution of an issue in controversy, if the 
parties agree to a dispute resolution proceeding.
    (b) The Commission will consider not using a dispute resolution 
proceeding if--
    (1) A definitive or authoritative resolution of the matter is 
required for precedential value, and such a proceeding is not likely to 
be accepted generally as an authoritative precedent;
    (2) The matter involves or may bear upon significant questions of 
Government policy that require additional procedures before a final 
resolution may be made, and such a proceeding would not likely serve to 
develop a recommended policy for the agency;
    (3) Maintaining established policies is of special importance, so 
that variations among individual decisions are not increased and such a 
proceeding would not likely reach consistent results among individual 
decisions;
    (4) The matter significantly affects persons or organizations who 
are not parties to the proceeding;
    (5) A full public record of the proceeding is important, and a 
dispute resolution proceeding cannot provide such a record; and
    (6) The Commission must maintain continuing jurisdiction over the 
matter with authority to alter the disposition of the matter in the 
light of changed circumstances, and a dispute resolution proceeding 
would interfere with the Commission's fulfilling that requirement.
    (c) Alternative means of dispute resolution authorized under this 
subpart are voluntary procedures which supplement rather than limit 
other available agency dispute resolution techniques.


Sec. 502.404  Neutrals.

    (a) A neutral may be a permanent or temporary officer or employee 
of the Federal Government or any other individual who is acceptable to 
the parties to a dispute resolution proceeding. A neutral shall have no 
official, financial, or personal conflict of interest with respect to 
the issues in controversy, unless such interest is fully disclosed in 
writing to all parties and all parties agree that the neutral may 
serve.
    (b) A neutral who serves as a conciliator, facilitator, or mediator 
serves at the will of the parties.
    (c) With consent of the parties, the Federal Maritime Commission 
Dispute Resolution Specialist will seek to provide a neutral in dispute 
resolution proceedings through Commission staff, arrangements with 
other agencies, or on a contractual basis.
    (d) Fees. Should the parties choose a neutral other than an 
official or employee of the Commission, fees and expenses shall be 
borne by the parties as the parties shall agree.


Sec. 502.405  Confidentiality.

    (a) Except as provided in paragraphs (d) and (e) of this section, a 
neutral in a dispute resolution proceeding shall not voluntarily 
disclose or through discovery or compulsory process be required to 
disclose any dispute resolution communication or any communication 
provided in confidence to the neutral, unless--
    (1) All parties to the dispute resolution proceeding and the 
neutral consent in writing, and, if the dispute resolution 
communication was provided by a nonparty participant, that participant 
also consents in writing;
    (2) The dispute resolution communication has already been made 
public;
    (3) The dispute resolution communication is required by statute to 
be made public, but a neutral should make such communication public 
only if no other person is reasonably available to disclose the 
communication; or
    (4) A court determines that such testimony or disclosure is 
necessary to--
    (i) Prevent a manifest injustice;
    (ii) Help establish a violation of law; or
    (iii) Prevent harm to the public health or safety, of sufficient 
magnitude in the particular case to outweigh the integrity of dispute 
resolution proceedings in general by reducing the confidence of parties 
in future cases that their communications will remain confidential.
    (b) A party to a dispute resolution proceeding shall not 
voluntarily disclose or through discovery or compulsory process be 
required to disclose any dispute resolution communication, unless--
    (1) The communication was prepared by the party seeking disclosure;
    (2) All parties to the dispute resolution proceeding consent in 
writing;
    (3) The dispute resolution communication has already been made 
public;
    (4) The dispute resolution communication is required by statute to 
be made public;
    (5) A court determines that such testimony or disclosure is 
necessary to--
    (i) Prevent a manifest injustice;
    (ii) Help establish a violation of law; or
    (iii) Prevent harm to the public health and safety, of sufficient 
magnitude in the particular case to outweigh the integrity of dispute 
resolution proceedings in general by reducing the confidence of parties 
in future cases that their communications will remain confidential;
    (6) The dispute resolution communication is relevant to determining 
the existence or meaning of an agreement or award that resulted from 
the dispute resolution proceeding or to the enforcement of such an 
agreement or award; or
    (7) Except for dispute resolution communications generated by the 
neutral, the dispute resolution communication was provided to or was 
available to all parties to the dispute resolution proceeding.
    (c) Any dispute resolution communication that is disclosed in 
violation of paragraph (a) or (b) of this section shall not be 
admissible in any proceeding relating to the issues in controversy with 
respect to which the communication was made.
    (d) (1) The parties may agree between or amongst themselves to 
alternative confidential procedures for disclosures by a neutral, and 
shall inform the neutral before commencement of the dispute resolution 
proceeding of any modifications to the provisions of paragraph (a) of 
this section that will govern the confidentiality of the dispute 
resolution proceeding, in accordance with the guidance on 
confidentiality in federal proceedings published by the Interagency ADR 
Working Group and adopted by the ADR Council (http://www.financenet.gov/financenet/fed/iadrwg/confid.pdf). If the parties do 
not so inform the neutral, paragraph (a) of this section shall apply.

[[Page 43515]]

    (2) To qualify for the exemption under paragraph (j) of this 
section, an alternative confidential procedure under this subsection 
may not provide for less disclosure than the confidential procedures 
otherwise provided under this section.
    (e) If a demand for disclosure, by way of discovery request or 
other legal process, is made upon a neutral regarding a dispute 
resolution communication, the neutral shall make reasonable efforts to 
notify the parties and any affected nonparty participants of the 
demand. Any party or affected nonparty participant who receives such 
notice and within 15 calendar days does not offer to defend a refusal 
of the neutral to disclose the requested information shall have waived 
any objection to such disclosure.
    (f) Nothing in this section shall prevent the discovery or 
admissibility of any evidence that is otherwise discoverable, merely 
because the evidence was presented in the course of a dispute 
resolution proceeding.
    (g) Paragraphs (a) and (b) of this section shall have no effect on 
the information and data that are necessary to document an agreement 
reached or order issued pursuant to a dispute resolution proceeding.
    (h) Paragraphs (a) and (b) of this section shall not prevent the 
gathering of information for research or educational purposes, in 
cooperation with other agencies, governmental entities, or dispute 
resolution programs, so long as the parties and the specific issues in 
controversy are not identifiable.
    (i) Paragraphs (a) and (b) of this section shall not prevent use of 
a dispute resolution communication to resolve a dispute between the 
neutral in a dispute resolution proceeding and a party to or 
participant in such proceeding, so long as such dispute resolution 
communication is disclosed only to the extent necessary to resolve such 
dispute.
    (j) A dispute resolution communication which is between a neutral 
and a party and which may not be disclosed under this section shall 
also be exempt from disclosure under 5 U.S.C. 552(b)(3).


Sec. 502.406  Arbitration.

    (a)(1) Arbitration may be used as an alternative means of dispute 
resolution whenever all parties consent, except that arbitration may 
not be used when the Commission or one of its components is a party. 
Consent may be obtained either before or after an issue in controversy 
has arisen. A party may agree to--
    (i) Submit only certain issues in controversy to arbitration; or
    (ii) Arbitration on the condition that the award must be within a 
range of possible outcomes.
    (2) The arbitration agreement that sets forth the subject matter 
submitted to the arbitrator shall be in writing. Each such arbitration 
agreement shall specify a maximum award that may be issued by the 
arbitrator and may specify other conditions limiting the range of 
possible outcomes.
    (b) With the concurrence of the Federal Maritime Commission Dispute 
Resolution Specialist, binding arbitration may be used to resolve any 
and all disputes that could be the subject of a Commission 
administrative proceeding before an Administrative Law Judge. The 
Federal Maritime Commission Dispute Resolution Specialist may withhold 
such concurrence after considering the factors specified in 
Sec. 502.403, should the Commission's General Counsel object to use of 
binding arbitration.
    (c)(1) The Federal Maritime Commission Dispute Resolution 
Specialist will appoint an arbitrator of the parties' choosing for an 
arbitration proceeding.
    (2) A Commission officer or employee selected as an arbitrator by 
the parties and appointed by the Federal Maritime Commission Dispute 
Resolution Specialist shall have authority to settle an issue in 
controversy through binding arbitration pursuant to the arbitration 
agreement; provided, however, that decisions by arbitrators shall not 
have precedential value with respect to decisions by Administrative Law 
Judges or the Commission. Administrative Law Judges may be appointed as 
arbitrators with the concurrence of the Chief Administrative Law Judge.
    (d) The arbitrator shall be a neutral who meets the criteria of 5 
U.S.C. 573.


Sec. 502.407  Authority of the arbitrator.

    An arbitrator to whom a dispute is referred may--
    (a) Regulate the course of and conduct arbitral hearings;
    (b) Administer oaths and affirmations;
    (c) Compel the attendance of witnesses and production of evidence 
at the hearing under the provisions of 9 U.S.C. 7 only to the extent 
the Commission is otherwise authorized by law to do so; and
    (d) Make awards.


Sec. 502.408  Conduct of arbitration proceedings.

    (a) The arbitrator shall set a time and place for the hearing on 
the dispute and shall notify the parties not less than five days before 
the hearing.
    (b) Any party wishing a record of the hearing shall--
    (1) Be responsible for the preparation of such record;
    (2) Notify the other parties and the arbitrator of the preparation 
of such record;
    (3) Furnish copies to all identified parties and the arbitrator; 
and
    (4) Pay all costs for such record, unless the parties agree 
otherwise or the arbitrator determines that the costs should be 
apportioned.
    (c)(1) The parties to the arbitration are entitled to be heard, to 
present evidence material to the controversy, and to cross-examine 
witnesses appearing at the hearing.
    (2) The arbitrator may, with the consent of the parties, conduct 
all or part of the hearing by telephone, television, computer, or other 
electronic means, if each party has an opportunity to participate.
    (3) The hearing shall be conducted expeditiously and in an informal 
manner.
    (4) The arbitrator may receive any oral or documentary evidence, 
except that irrelevant, immaterial, unduly repetitious, or privileged 
evidence may be excluded by the arbitrator.
    (5) The arbitrator shall interpret and apply relevant statutory and 
regulatory requirements, legal precedents, and policy directives.
    (d) The provisions of Sec. 502.11 regarding ex parte communications 
apply to all arbitration proceedings. No interested person shall make 
or knowingly cause to be made to the arbitrator an unauthorized ex 
parte communication relevant to the merits of the proceeding, unless 
the parties agree otherwise. If a communication is made in violation of 
this subsection, the arbitrator shall ensure that a memorandum of the 
communication is prepared and made a part of the record, and that an 
opportunity for rebuttal is allowed. Upon receipt of a communication 
made in violation of this subsection, the arbitrator may, to the extent 
consistent with the interests of justice and the policies underlying 
this subchapter, require the offending party to show cause why the 
claim of such party should not be resolved against such party as a 
result of the improper conduct.
    (e) The arbitrator shall make an award within 30 days after the 
close of the hearing, or the date of the filing of any briefs 
authorized by the arbitrator, whichever date is later, unless the 
parties agree to some other time limit.

[[Page 43516]]

Sec. 502.409  Arbitration awards.

    (a)(1) The award in an arbitration proceeding under this subchapter 
shall include a brief, informal discussion of the factual and legal 
basis for the award, but formal findings of fact or conclusions of law 
shall not be required.
    (2) Exceptions to or an appeal of an arbitrator's decision may not 
be filed with the Commission.
    (b) An award entered in an arbitration proceeding may not serve as 
an estoppel in any other proceeding for any issue that was resolved in 
the proceeding. Such an award also may not be used as precedent or 
otherwise be considered in any factually unrelated proceeding.


Sec. 502.410  Representation of parties.

    (a) The provisions of Sec. 502.21 apply to the representation of 
parties in dispute resolution proceedings, as do the provisions of 
Sec. 502.27 regarding the representation of parties by nonattorneys.
    (b) A neutral in a dispute resolution proceeding may require 
participants to demonstrate authority to enter into a binding agreement 
reached by means of a dispute resolution proceeding.


Sec. 502.411  Mediation and other alternative means of dispute 
resolution.

    (a) Parties are encouraged to utilize mediation or other forms of 
alternative dispute resolution in all formal proceedings. The 
Commission also encourages those with disputes to pursue mediation in 
lieu of, or prior to, the initiation of a Commission proceeding.
    (b) Any party may request, at any time, that a mediator or other 
neutral be appointed to assist the parties in reaching a settlement. If 
such a request is made in a proceeding assigned to an Administrative 
Law Judge, the provisions of Sec. 502.91 apply. For all other matters, 
alternative dispute resolution services may be requested directly from 
the Federal Maritime Commission Alternative Dispute Resolution 
Specialist, who may serve as the neutral if the parties agree or who 
will arrange for the appointment of a neutral acceptable to all 
parties.
    (c) The neutral shall convene and conduct mediation or other 
appropriate dispute resolution proceedings with the parties.
    (d) Ex parte Communications. Except with respect to arbitration, 
the provisions of Sec. 502.11 do not apply to dispute resolution 
proceedings, and mediators are expressly authorized to conduct private 
sessions with parties.

    By the Commission.
Bryant L. VanBrakle,
Secretary.
[FR Doc. 01-20755 Filed 8-17-01; 8:45 am]
BILLING CODE 6730-01-P