| 5. Section 21(e) addresses concerns respecting arbitral |
remedies of punitive or exemplary damages because of the |
absence, under present law, of guidelines for arbitral punitive |
awards and of the severe limitations on judicial review |
arbitration awards. Recent data from the securities industry |
provides some evidence that arbitrators do not abuse the power |
to punish through excessive awards. See generally Thomas J. |
Stipanowich, Punitive Damages and the Consumerization of |
Arbitration, 92 Nw. L. Rev. 1 (1997); Richard Ryder, Punitive |
Award Survey, 8 Sec. Arb. Commentator, Nov. 1996, at 4. Because |
legitimate concerns remain, however, specific provisions have |
been included in Section 21(e) that require arbitrators who |
award a remedy of punitive damages to specify in the award the |
basis in fact for justifying, in law for authorizing, and the |
amount of the award attributable to the punitive damage remedy. |
Again, it should be noted that parties can waive the |
requirements set forth in Section 21(e) by agreement. |