Cara Dowling Alison G FitzGerald December 21 2017 Procedural innovations in arbitration Norton Rose Fulbright | Arbitration & ADR - International Cara Dowling, Alison G FitzGerald Arbitration & ADR Increasing efficiency and reducing costsTransformation of arbitrationCustomisable arbitration clausesEmergency arbitratorExpedited formation of the tribunalExpedited proceedingsSummary procedureCommentIncreasing efficiency and reducing costsThis update discusses various innovative procedural features (eg, emergency arbitrators, expedited arbitration and summary procedures) introduced in recently adopted institutional arbitration rules which are designed to increase the efficiency of arbitral proceedings. Most practitioners will be familiar with these concepts, but the following provides a useful summary for those less familiar with the rules of the major arbitral institutions.Transformation of arbitrationOnce touted as a cost-effective and flexible procedure, arbitration is facing increased criticism for the substantial time and costs involved and, increasingly, for the standardisation of procedures. In theory, significant savings in time and costs should be possible in arbitration, given that parties and arbitrators can agree to tailor proceedings to the specific case. For example, while extensive document production, numerous exchanges of lengthy pleadings and expert reports followed by prolonged evidentiary hearings may be appropriate and indeed necessary in certain complex cases, they are often inappropriate in smaller cases and lead to unnecessary and disproportionate delay and expense.However, in practice it can be difficult to obtain party agreement – even if only on procedural issues – once a dispute has arisen. This is partly due to the fact that with increasingly large sums in dispute and greater transparency (and therefore scrutiny) of arbitral awards, counsel face increasing pressure to exploit every opportunity to advance their client's position, which in some instances that means delaying tactics or putting pressure on their opponent by driving up costs. Arbitrators can find it difficult to manage such conduct as they are under pressure to protect their awards from challenges, which means ensuring that parties are given every opportunity to present their case fully.This is where arbitral institutions can play a useful role. Most major arbitral institutions now offer tools to assist parties and arbitrators to make appropriate case management decisions, and most institutional rules contain provisions designed to ensure a proportionate arbitration procedure.Customisable arbitration clausesParties can, of course, customise their arbitration agreements to provide for a procedure that is tailored to the parties and the types of dispute that might arise between them. For example, parties can limit certain procedural stages of an arbitration – most notably the document production phase. Providing for a sole arbitrator in appropriate cases could reduce time in various ways, including the time for the formation of the tribunal and potentially for deliberation on – and issue of – the award.In practice, the option to tailor the arbitration clause is under-used. Dispute resolution clauses are all too frequently included at the eleventh hour, based on a standard form template and with inadequate (if any) input from a dispute resolution specialist. This is regrettable, as prioritising and investing time in the negotiation of a tailored arbitration clause could save parties significant cost, time and aggravation in the event of a dispute. However, care must be exercised when drafting bespoke arbitration clauses, as ambiguity may lead to additional disputes over the parties' intentions, or even render the clause unenforceable.Emergency arbitratorThe formation of the tribunal, particularly when a panel of three arbitrators is to be appointed, can be time consuming. This can be particularly frustrating – or indeed damaging – when a party requires urgent relief to preserve the status quo between the parties.To address this, most arbitral institutions have introduced so-called 'emergency arbitrator mechanisms' into their rules. Parties may apply to the arbitral institution for the appointment of an emergency arbitrator, before the tribunal's formation, specifically to deal with urgent interim measure applications. In appropriate cases, a party can obtain relief relatively quickly, before the tribunal has been formed and without having to resort to the courts. Any orders by an emergency arbitrator are temporary and may be varied or upheld by the substantive tribunal appointed in due course. This has consequences for enforcement, as not all jurisdictions will recognise an emergency arbitrator's decision as an award for purposes of the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. Nonetheless, emergency arbitrator applications are increasingly common and are seen as an important means of restraining or compelling the conduct of an adversary.Expedited formation of tribunalSome arbitral rules also provide for expedited formation of the tribunal. For example, under the London Court of International Arbitration (LCIA) Rules, in cases of exceptional urgency, a party may apply for expedited formation and, if granted, the LCIA can abridge any period of time relevant for the tribunal formation. The parties can have a fully functional tribunal in place in weeks, whereas the normal procedure can take months.Expedited proceedingsPerhaps the best way to reduce the time and cost of arbitration is to condense or eliminate certain stages of the process. Parties can agree – either in advance or with the tribunal – on a condensed or fast-track (expedited) procedure. Parties may choose to adopt either a bespoke procedure or institutional expedited procedural rules.The rules of other leading arbitral institutions provide that an expedited arbitration procedure will apply by default if a case meets certain criteria, with reference to the value in dispute or complexity. The International Chamber of Commerce (ICC) recently adopted amendments to the ICC Rules of Arbitration in order to introduce an expedited procedure which will apply to all cases in which the amount in dispute does not exceed $2 million, if the arbitration agreement is entered into after March 1 2017 (or if the parties agree to opt into the mechanism). The International Commercial Arbitration Court (ICAC) at the Russian Chamber of Commerce and Industry also provides for an expedited procedure in its recently updated rules. While proceedings at the ICAC are already relatively quick and awards are often rendered within six months of the formation of the tribunal, under the expedited procedure the case should be completed within 120 days of the tribunal's formation.Although the specific rules differ, expedited arbitration rules generally include:preference for a sole arbitrator, where possible;abridged periods of time for relevant procedural actions, in particular for delivery of the award;the right of the tribunal to limit written submissions and evidence, including document production; anda presumption in favour of document-only arbitration (ie, without an oral hearing).Expedited procedures have proven popular – as of 2016, 30% of both the ICC's and the ICAC's caseload fell under the rules for expedited procedure.Summary procedureAn unmeritorious claim or hopeless defence can be particularly frustrating in arbitration, as arbitration has traditionally lacked a summary dismissal mechanism. Some institutions have moved to change that.The issues to be determined by way of summary procedure may concern jurisdiction, admissibility or the merits of the case, and the application can only be determined after each party has had an opportunity to be heard.CommentIt is not yet clear how extensively these provisions will be used, nor how resulting decisions and orders will be recognised and enforced. However, the idea of granting tribunals powers to dispose of certain issues by way of summary procedure should be welcomed. The extent to which other institutions will follow remains to be seen.For further information on this topic please contact James Rogers or Cara Dowling at Norton Rose Fulbright LLP's London office by telephone (+44 20 7283 6000) or email ([email protected]m or [email protected]). Alternatively, contact Alison FitzGerald at Norton Rose Fulbright LLP's Ottawa office by telephone (+1 514 847 4747) or email ([email protected]). The Norton Rose Fulbright LLP website can be accessed at www.nortonrosefulbright.com.