With companies under pressure to save time and money, we explore how parties, arbitrators and institutions can boost efficiency throughout a dispute
A common complaint about international arbitration is it takes too long and costs too much. As a result, stakeholders are constantly asking how the process can be made more efficient. In this article, we look at the issue from the perspective of three different stakeholders and ask what can parties, arbitrators and institutions do to improve the efficiency of the process. What works for one dispute may not for another. Appropriate case management must be considered on an individual basis, gauging factors such as complexity, value, resources and overall strategy. However, the techniques listed below are always worth considering.
What can parties and their counsel do?
- Assess the case early: Having a well-settled case theory and strategy can help ensure you adopt a procedure that allows you to present your case in the most persuasive way possible. Analysing the likely quantum outcomes at an early stage can also assist with settlement negotiations and streamlining the procedure. HSF's decision analysis tool is a useful way of conducting this exercise.
- Improve arbitrator selection: This can be done in several ways, but can include:
- Agreeing to one arbitrator rather than three. The advantages are obvious — decision making is more efficient with one arbitrator, and it is also easier to lock down a hearing date.
- Ensuring party-nominated or agreed arbitrators have good availability to actively manage the case and deliver the award as quickly as possible. This may require the selection of a lesser known or more junior arbitrator who has enough time to devote to the case. The more the arbitration community can do to broaden the pool of potential arbitrator candidates, the more we can reduce delay caused by unavailable arbitrators.
- Pick up the phone: Lack of communication between counsel can often lead to unnecessary rounds of correspondence and applications, particularly over issues such as time extensions and document production requests. It can be important to set out the client's position in writing but picking up the phone is far more efficient (and sometimes more effective) where the option is available. Establishing a good dialogue from the outset may also assist with a more collaborative approach later on.
- Consider remote procedural conferences and hearings: This will not only save time and expense, but may also mean securing an earlier hearing date. Although in many cases the parties will feel their case is best presented in person, the arguments in favour of remote hearings are obvious: they avoid the need to travel and the associated costs and enable hearings to be fitted into smaller slots. There are also environmental reasons for choosing not to travel for hearings.
- Focus on your best points: Spending time and money arguing weak points can be counter-productive – it undermines redibility with the tribunal and can also lead to adverse cost consequences. Particularly where page limits are imposed, less can be more.
- Limit your evidence: It can be easy to fall into the trap of assuming more evidence will help your case. However, submitting a small amount of focused evidence can be more effective. This will require working out which key witnesses are needed to prove your case and rebut your opponent's. It is also important to give careful thought to what expert evidence is truly necessary and have the confidence not to put expert evidence forward where it isn't.
What can arbitrators do?
- Control the procedure: Arbitrators who actively manage the procedural timetable from the beginning, including preparing a first draft of the timetable to circulate to the parties, can achieve a more efficient procedure. The provision of a timetable can often aid adoption, as it forces the parties to justify their departure from it.
- Be braver in procedural decisions: Tribunals have many tools at their disposal for improving the efficiency of proceedings, including bifurcation, rendering partial awards and summary dismissal in appropriate cases. While adoption of these tools is increasing, there is a general perception that tribunals could do more.
- Control written submissions: A key tool for controlling written submissions is imposing page limits. Being required to stick to a page limit promotes discipline and good advocacy and prevents parties from launching a war of attrition. By the time the parties come to submit their first round of submissions, the key issues should already be clear enough that agreeing page limits is achievable. In response to the Queen Mary Survey on Arbitration in 2021, arbitration users said they would be most willing to do without "unlimited length of written submissions".
- Control the evidence: Require parties to explain upfront what evidence they anticipate and justify why such evidence is needed. This will prevent unnecessary rounds of evidence and cross-examination.
- Make immediate decisions on costs: Unfortunately, there is a tendency for arbitrators to defer decisions on costs until the end of an arbitration and wrap it all up into one decision on costs rather than decide on a more ad hoc basis. However, where tribunals do rule on costs immediately, parties can feel the ramifications of obstructive conduct, meritless applications and failure to meet deadlines, which in turn could encourage better behaviours.
- Promote settlement: It is open to tribunals to promote mediation to parties and facilitate such mediation by ordering a stay. In some jurisdictions, it may also be possible for tribunals to facilitate the mediation itself. For the right case, proactively promoting settlement can be an effective tool that tribunals can use to reduce time and cost.
What can institutions do?
Institutions have already been proactive in this area. For example, the mainstream institutions now actively manage arbitrator availability to ensure chosen arbitrators have availability to manage the case and draft the award. Many institutional rules now also impose time limits on rendering the award and institutions have started to keep records of arbitrator case management: they will not appoint arbitrators who have underdelivered. Further steps institutions could take include:
- Imposing cost sanctions on arbitrators for delay: This is something the International Chamber of Commerce (ICC) has introduced in relation to awards that are delayed, and which other institutions could also consider adopting.
- Encouraging adoption of expedited procedures: These are essentially fast-track rules which either shorten time limits or attempt to limit other procedural steps in the process. Although arguably arbitrators have always been able to take these steps as part of their case management powers, their inclusion in institutional rules has generally encouraged tribunals to adopt them. They are proving popular, with the ICC administering 400 expedited arbitrations in five years, and the Singapore International Arbitration Centre receiving a total of 715 expedited procedure applications (and accepting 401) since the introduction of these provisions in 2010.
- Encouraging tribunals to promote settlement: Tribunals may be more willing to promote settlement if institutional rules empower them. For example, in Appendix IV to the ICC rules on case management techniques, it emphasises that the tribunal can inform the parties they are free to settle all or part of the dispute and, where agreed between the parties and tribunal, the tribunal may take steps to facilitate settlement. Although this issue is addressed in some other rules, it is not mainstream.
- Striving for even greater efficiency: Recognising that institutions have made great efforts to ensure their rules, processes and technology are cutting edge, there is always room for improvement. This is particularly the case where an institution has responsibility for a particular step (such as appointing an arbitrator or scrutinising an award).
Does anyone else have a role to play?
Of course, there is only so much that parties, arbitrators and institutions can do within the confines of an arbitral seat. Legislators have a key role to play in reviewing and ensuring that arbitration legislation remains up to date and empowers tribunals, institutions and parties to adopt efficient procedures. A recent example is the English Law Commission, which, among many of the proposed changes in its consultation paper, has proposed the English Act make explicit provision for the possibility of a summary procedure. The rationale is to remove any doubt as to its availability and reassure arbitrators about disposing of claims/defences where appropriate. Therefore, to the extent there is uncertainty among stakeholders or lack of take-up of procedural innovations, national legislation can step in to give arbitrators the comfort to properly control the proceedings.
There are lots of tools available. It's up to the parties, their counsel, arbitrators and institutions to use them.