“Fast-track” (or accelerated) arbitration can be an effective way to help parties reduce the time taken to reach a solution to their dispute. This article seeks to identify examples of procedural mechanisms and techniques that parties might use in order to achieve “fast-track” arbitration. These procedural tools are designed to accelerate arbitration either by reducing the time between the Request for Arbitration and the Award, or by helping encourage settlement in the course of the arbitration.
The procedural tools for a “fast-track” arbitration come from two main sources: (i) the rules of arbitration institutions (for example, the Rules for Expedited Procedures of the American Arbitration Association (“AAA”)); or, more importantly, (ii) the agreement of the parties. The ability of parties to an arbitration to define and agree on their own procedure is one of the distinctive features of arbitration. This gives parties room for procedural creativity, including shortening time frames between steps in the arbitral process, or removing certain steps entirely.16
How and when should parties agree to a “fast-track” procedure and the procedural tools to achieve it? There are two main options: (i) in the Arbitration Agreement itself—which expresses an intent that arbitration be expedited and/or (ii) at the outset of the arbitration of a dispute, because the resolution of the dispute is of some urgency. In such cases, the parties may invoke certain procedural tools to tailor the arbitration to their needs. Some practical tips and procedural tools that the parties may keep in mind or use for accelerating the resolution of their dispute are outlined below.
Tip 1: Select the right Arbitral Tribunal
The cooperation of the parties and, in addition, of the Arbitral Tribunal (or a single arbitrator) is essential to a “fast-track” procedure. If the parties intend to employ a “fast-track” procedure, or consider that the need to “fast-track” proceedings could arise, they would be well-advised to: (i) select experienced arbitrators with available time; (ii) select arbitrators with strong case-management skills and (iii) select arbitrators who will render their Award in a timely manner. Inexperienced or overly busy arbitrators may have difficulty employing or conforming to a “fast-track” procedure.
Tip 2: Select time limits
Time limits in any “fast-track” procedure should be reasonable and realistic. No matter how quickly the parties may want the dispute resolved, they should not curtail their ability to state their case fully. The arbitrators, in consultation with the parties, should define milestones for the steps in the proceedings and the Award. These milestones should be flexible where necessary to ensure due process and thus ensure the validity of the Award.
It is possible that time limits are identified in the arbitration clause itself. For example, a clause might provide that:
“The Award shall be rendered within […] months of the commencement of the arbitration, unless the arbitral tribunal determines that the interest of justice requires that such limit be extended.”17
Otherwise, time limits are generally defined at the beginning of the arbitration when the parties and the Arbitral Tribunal discuss and agree on the arbitration timetable.
Tip 3: Provide procedural rules to adjust/accelerate the conduct/steps of the proceedings
It is possible at every step of the arbitral procedure to make adjustments in order to accelerate the case. These could include:
- Placing a limit on the length of submissions;
- Limiting the number of submissions; for example providing for one round of memorials rather than the usual two rounds, or excluding the need for the parties to submit post-hearing memorials;
- Ruling out a document production phase;
- Providing that the matter be decided on the basis of the written submissions without the need for a hearing;
- Limiting the number of witnesses or experts that the parties may put forward (or even providing that there shall be no witnesses or experts).
Tip 4: Consider the utility of “baseball” arbitration
In a final offer or “baseball” arbitration, the powers of the arbitrators concerning the award are narrowed down to a choice between two final offers submitted by the parties, after an exchange of written pleadings. The following is an example of a “baseball” arbitration clause:
“Each party shall submit to the arbitrator and exchange with the other, in accordance with a procedure to be established by the arbitrator, its best offer. The arbitrator shall be limited to awarding only one or the other of the two positions submitted.”18
The advantages of “baseball” arbitration are that it can expedite the resolution of disputes and encourage settlement. This is a procedure that commercial parties are more likely to adopt after a particular dispute has risen. It would be difficult to anticipate at the contract drafting stage whether or not this procedure would work for all disputes.
Tip 5: Consider the use of a sealed offer
A “sealed offer” is a written offer to settle a dispute which has been referred to arbitration. It is an offer which is expressly made “without prejudice save as to costs.“19 The offeree who does not accept the offer and subsequently fails to achieve a more favorable award by continuing the proceedings, is liable for all the costs of the arbitration as of the date of the submission of the sealed offer. The sealed offer can therefore provide an incentive to a settlement and thus “fast-track” the dispute. However, the sealed offer comes from dispute practice in the United Kingdom and is not yet standard practice in international arbitration.
The appropriate procedural tools for a “fast-track” arbitration will depend on the specificities of each dispute. Whilst the tools outlined in this article are by no means exhaustive, they can help to facilitate efficient procedures in which time and cost can be better controlled.