Delay is a common complaint of parties in international arbitration. Understandably, many parties would like to resolve their disputes efficiently and without spending an exorbitant amount of time or money. On the other hand, some parties find delay to be in their best interest at certain stages of dispute resolution, which brings truth to the amusing saying “one person’s delay is another person’s due process.”
Distinguishing efficiency and due process is important. As the highly-respected arbitrator Yves Derains recently asserted, due process must trump efficiency. The aim of international arbitration is not simply to determine a dispute as quickly and cheaply as possible. The aim of international arbitration is to arrive at a fair and reasoned decision on a dispute based on a proper evaluation of the facts, relevant agreements, and the law.
Bearing in mind that some parties may appreciate delay and that due process is paramount, many parties are would like to streamline the length and cost of international arbitration proceedings. Clients are especially keen to increase efficiency towards the beginning and at the end of the arbitral process. In response, in 2016 arbitral institutions and rule-making bodies such as the ICC, LCIA, SIAC, and UNCITRAL have instituted measures to promote efficiency in international arbitration.
1. Publishing sitting arbitrator information to indicate availability
Delay often occurs at the beginning stages of an arbitration when the tribunal is being formed due to arbitrator’s scheduling conflicts. On 5 January 2016, the International Chamber of Commerce (“ICC”) announced it would begin publishing the names and nationalities of all arbitrators sitting in ICC cases on their website in an effort to give parties and counsel more information on the case-load and availability of potential appointees. Parties will, by mutual agreement, have the option of “opting out” of this limited disclosure, although it is not clear at what stage the opt-out must be exercised.
2. Accelerating the procedure for appointing arbitrators
In a similar effort to expedite the tribunal formation process, the London Court of International Arbitration (“LCIA”) instituted on 1 October 2016 new rules on the formation of the arbitral tribunal. Specifically, Articles 9 to 11 allow any party to apply to the LCIA for the expedited appointment of an emergency arbitrator or replacement arbitrator. Additionally, Article 5 requires arbitral candidates to sign a declaration stating that they can “devote sufficient time, diligence and industry to ensure the expeditious and efficient conduct of the arbitration”.
3. Creating expedited procedural rules
On 1 July 2016, the Singapore International Arbitration Centre (“SIAC”) released a new set of rules, which give parties the option of applying for expedited procedure where the dispute does not exceed SGD 6 million (USD 4.3 million), where the parties so agree, or in cases of exceptional urgency. The expedited procedure set out in Article 5 provides for a sole arbitrator with abbreviated time limits and the option for resolution based on documentary evidence only.
On 7 July 2016, the United Nations Commission on International Trade Law (“UNCITRAL”) released the 2016 UNCITRAL Notes on Organizing Arbitral Proceedings, in which several new expedited procedural rules were introduced. For example, Article 13 encourages the tribunal to place time limits for submission of documentary evidence and consequences for non-compliance.
4. Penalizing arbitrators for unjustified delays in submitting awards
Delay frequently occurs towards the end of an arbitration, after post-hearing briefs are submitted and before the tribunal delivers the award. The ICC announced on 5 January 2016 that it will be instituting financial consequences against arbitrators where they are responsible for unjustified delays in submitted draft arbitration awards to the ICC Court.
Specifically, ICC arbitral tribunals are expected to submit draft awards within three months after the last substantive hearing or, if later, the filing of the last written submissions (excluding cost submissions). If the tribunal fails to comply, the ICC may reduce arbitrators’ fees by the following amounts:
- 5 to 10% for draft awards submitted up to seven months late;
- 10 to 20% for draft awards submitted up to 10 months late; and
- 20% or more for draft awards submitted more than 10 months late.
Interestingly, this ICC policy forces tribunals of three arbitrators to hold each other to account, and could possibly result in one arbitrator seeking the amount of the reduced fees from the arbitrator causing the delay. Since the policy is discretionary, the ICC may find that the delay is justified by factors beyond the arbitrators’ control or to exceptional circumstances, and choose not to evoke the penalty.