On 30 April 2015 Dr Stuart Dutson, a partner in Eversheds LLP’s International Arbitration Group, helped launch the Expedited Arbitration Procedure for Financial Disputes on behalf of the Financial Sector Branch of the Arbitration Club at an event in London. The Procedure aims to reduce the time and monetary costs of arbitration, and to encourage parties in the financial sector to use arbitration. It is designed to be compatible with the rules of the major arbitral institutions and the ICC, LCIA, HKIAC, LCIA, PRIME and the Swiss Chambers of Commerce (the “Institutions”) have all confirmed that it is compatible with their arbitration rules.
The Arbitration Club’s (the “Club”) mission is to disseminate collective knowledge and best practice gained by members through their experience in all forms of dispute resolution. The Financial Services Branch of the Club (“FSB”) enables practitioners and advisers to meet with professionals from the financial sector to explore the effective resolution of disputes, particularly those between financial institutions and their clients and counterparties.
A working party of FSB members (the “Working Party”), including the former Commercial Court judge Sir Peter Cresswell and Dr Dutson, came together with a view to producing an expedited arbitration procedure for financial sector disputes (the “Expedited Procedure”). The Working Party was primarily motivated to produce the Expedited Procedure by the fact that the financial services sector is traditionally less likely to avail of arbitration, traditionally preferring to litigate in the courts of London or New York. For instance, in the 2013 International Arbitration survey by PwC and Queen Mary University, the financial services industry ranked court litigation as the preferred mechanism to resolve disputes, with arbitration coming a distant second.
The Working Party, in coming together to devise the Expedited Procedure, is seeking to address the concerns of the financial sector head on and to help propel financial services arbitration forward, in the City of London and elsewhere, while at the same time ensuring that the Expedited Procedure is flexible enough to be used in other sectors.
Process of drafting the Expedited Procedure
Stuart Dutson oversaw the process of drafting the Expedited Procedure, supported by his Eversheds colleague Conor Redmond, with input from the other members of the Working Party. The Expedited Procedure is based on a model procedure contained in the book “International Arbitration: A Practical Guide”, written by Stuart and his Eversheds colleagues Andy Moody and Neil Newing.
After preparing an initial draft of the Expedited Procedure, which the Working Party adapted to focus on financial services disputes, Eversheds approached seven key arbitral institutions, including the ICC, AAA-ICDR, HKIAC, SIAC, Swiss Chambers, LCIA and P.R.I.M.E.. We provided the seven institutions with the initial draft and asked for their comments.
What followed was an extremely beneficial iterative process whereby the Institutions assisted the Working Party in shaping the Expedited Procedure, with the result that the Institutions have all confirmed that the Expedited Procedure is compatible with their Rules and operating procedures. The result of this is that the Expedited Procedure can be “bolted on” to the existing rules of any of the Institutions with the aim of achieving substantial cost and time savings.
The Expedited Procedure
Key aspects of the Expedited Procedure include provisions which provide:
- for a stated aim of expediting the dispute resolution process while avoiding all unnecessary costs and delay;
- for a limit to the time periods for the service of evidence and pleadings;
- the option for the parties to agree that the Tribunal should state the reasons for its award in summary form only, or not at all;
- for a sole arbitrator or three arbitrator tribunal;
- the Tribunal with the power to dispense with discovery or disclosure of documents;
- for an overall timetable for the proceedings which targets the production of an award within 21 weeks of the service of the response to the request for arbitration plus the length of the hearing where a sole arbitrator is appointed, and 22 weeks plus the length of the hearing in the case of a three arbitrator Tribunal;
- that a hearing is to be held only if requested by a party and deemed necessary by the Tribunal, and that any such hearing must be a single hearing for the resolution of issues of jurisdiction, liability, and quantum, and is to be held within 4 months of the Tribunal’s formation;
- that oral evidence of factual or expert witnesses, and cross-examination of witnesses, is only to be admitted with the agreement of the other party, or if ordered by the Tribunal in exceptional circumstances;
- for an overall timetable for the proceedings which provides for the production of an award within 21 weeks of service of the response to the request for arbitration plus the length of the hearing (where a sole arbitrator is appointed) and 22 weeks plus the length of the hearing if the Tribunal consists of 3 arbitrators; and
- a limit on the length of any pleading, witness statement or expert report to 20 single-sided A4 pages using 12pt Arial font.
The Expedited Procedure should assist parties in the financial sector who wish to resolve their disputes swiftly and effectively without incurring huge costs. As noted above, although drafted by Dr Dutson and the Working Party with the financial sector in mind, the Expedited Procedure is sufficiently adaptable that it could be used for disputes in other sectors. Its flexibility also means that it should be compatible with the rules of any of the Institutions. The Expedited Procedure can be downloaded free of charge from the Club’s website, http://arbitrationclub.org.uk/.