Update on commercial arbitration

Efficient Arbitration – Part 2: Launching an Efficient Arbitration

17/09/2018 15:59

Kicking off our series on efficiency in arbitration, our first article, Efficient Arbitration – Part 1: Metrics sets out our idea of an efficient arbitration:

Achieving the best possible outcome with the least amount of resources.

A balancing act.

A range of tools are available to focus the spending of resources. Resources should be invested, not wasted. The selection of the right tools to do so often falls to counsel. It is crucial that counsel is aware of the available tools, stays on top of new efficiency developments, and is experienced in selecting and utilizing the right tools for each case.

This article is the first of a two-part overview of efficiency tools, focusing on those available at the early stages of the proceedings. The second part will address efficiency in presenting evidence and at the hearing and post-hearing stages.

As our series continues, we will discuss our experience with various efficiency tools.

1. Preliminary Case Assessment

The course for an efficient arbitration can be set even before the arbitration is initiated.

A preliminary case assessment, involving a detailed review of the documentation and legal analysis, permits the drawing out of real issues and likely outcomes. The advantages of this are evident. To highlight a few:

  • For matters of low value or with little chance of success, mediation or other forms of ADR may be the better means for resolving the dispute.
  • Knowing the real issues informs the decision of whether to pursue joinder or consolidation, so as to avoid the cost of potential multiple proceedings (see “Efficiency at all cost – arbitration and consolidation”); and whether a simplified procedure applies or should be proposed (i.e. expedited or summary procedure).
  • A thorough case assessment may attract stronger third-party funding. De-risking the dispute, third-party funding allows parties to pursue their claim without bearing all the costs and risks.
  • Finally, one of the advantages of arbitration is that the parties are free to design the proceedings to fit their issues and needs. To benefit from that advantage, counsel should be aware of the real issues already at the outset of the arbitration.

Accordingly, early case assessment is an important efficiency tool. If utilized properly, it will save time and money in the long run.

2. Initiating the Arbitration

Already drafting the first submission to initiate the arbitration, often called the Request for Arbitration (RFA), raises important efficiency questions:

How much detail, and how much evidence, should actually go into the RFA?

This, of course, depends on strategy, and parties should tread on a case-by-case basis.

Generally, a shorter RFA may save time and money, but will require additional information in further submissions. The case may be perceived as weaker if less or no evidence is presented, hampering chances of early settlement. A more detailed RFA, on the other hand, may assist the tribunal in laying out a more tailored procedure. However, the respondent party may seek an extension for filing its equally detailed Answer (and potential counterclaim) (ICC Guide on Effective Management of Arbitration). Moreover, while possibly enhancing chances of early settlement, revealing the “smoking gun” in the RFA gives the other party significantly more time to prepare a rebuttal, which may jeopardize a favourable outcome.

3. Selecting the Tribunal

Once the arbitration is initiated, the next – and important – task is selecting the right arbitrators. Many considerations are relevant, in particular the arbitrators’ experience, background and preferences.

But personality may also play a role. In our experience, the efficiency of proceedings is greatly enhanced by arbitrators who, for instance, restrain “particularly litigious counsel” tempted to “take advantage of arbitrators who were softer; generously granted exceptions; always sought to achieve a compromise in lieu of simply deciding, and so allowed counsel to disregard set deadlines and procedures with impunity” (see Leon Kopecký and Victoria Pernt’s A Bid for Strong Arbitrators).

When selecting arbitrators, counsel may also seek confirmation as to their availability and commitment not to take on new appointments that may interfere with the efficient conduct of the arbitration.

4. Designing the Arbitration

The early stages of the proceedings lend themselves to designing the most efficient arbitration for the particular case.

Parties may agree on a fast-track schedule (with fixed deadlines) or page limits for submissions. Should subsequent submissions give rise to new issues, parties may schedule a further procedural conference to modify the proceedings accordingly.

An important tool gaining more and more traction is the effective use of the case management conference (CMC). The CMC aims to engage the tribunal at an early stage. It helps streamline the proceedings and determine and focus the real issues. The benefits are significant: focusing the real issues may simplify the arbitration, or even dispose of it altogether by encouraging early settlement (IBA Compendium of Arbitration Practice 2017).

… to be continued

The above are just some of the tools at the parties’ disposal in the early stages of arbitration. Counsel will have to determine in every case and at every stage whether and which of these tools to implement. That decision will be based on a cost/benefit analysis. A balancing act.

Importantly, no two tools and no two stages should be viewed in isolation. The efficiency tools adopted in the early stages will inform and affect the remainder of the proceedings – a stage we will explore in our next article.

Credits: Kluwer Arbitration Blog


Share Post
  • IP Arbitration on the Rise 30/07/2019 14:26

    The relevance of intellectual property in business is on the rise, in particular concerning cross-border transactions. Accordingly, the willingness to defend such rights is also becoming stronger.

  • Expert evidence: practical tips for managing party-appointed experts 05/06/2019 15:04

    Large-scale international infrastructure and construction projects always involve factual questions of what, where and when. However, responsibility invariably turns on more intricate questions of cause and effect and expert evidence is usually required, often across more than one discipline. The expert phase is often therefore the most critical, and sometimes costly, part of the arbitration process. This article offers some practical tips for managing party-appointed experts in arbitrations.

  • A Critique of Double Standards on Dispute Resolution Mechanisms of EU in Bilateral Investment Treaties and Double Taxation Treaties 23/05/2019 10:24

    This post aims at highlighting an inconsistency in the law of the European Union (“EU”) in regards to the comparison of the treatment of Bilateral Investment Treaties (“BITs”) and Double Taxation Treaties (“DTTs”) concluded between EU Member States. The inconsistency lies in the diametrically different approaches adopted by EU law and its institutions (“EU Institutions”) towards the dispute resolution mechanisms contained in these international instruments.

  • Comprehensive guidance for recognition and enforcement of foreign arbitral awards 20/05/2019 16:52

    The courts of the foreign state in which a foreign arbitral award was issued have jurisdiction over any objection or dispute concerning its validity and the Greek courts have no jurisdiction to adjudicate an action to nullify a foreign arbitral award for the reasons set out in Articles 70, 897 and 901 of the Code of Civil Procedure.

  • Arbitrating in CEE & CIS: Transparency, Accountability and Choice of Arbitrators 20/05/2019 16:46

    The second edition of the Jeantet “Arbitrating in CEE and CIS” roundtable was held during the Paris Arbitration Week on Thursday 4 April 2019 at the Jeantet offices. The topic of this year’s edition was “Transparency, Accountability and Choice of Arbitrators”.

  • French court rules that mandatory expert determination provisions do not render arbitration clauses inapplicable 20/05/2019 16:41

    The arbitral tribunal's power to determine its jurisdiction (known as 'compétence-compétence') is a fundamental principle of French arbitration law. Pursuant to Article 1465 of the French Civil Procedure Code, "[t]he arbitral tribunal has exclusive jurisdiction to determine challenges to its jurisdiction".(1) Thus, arbitrators have the exclusive power to determine the scope of their jurisdictional powers (and their validity), including with respect to the subject matter of disputes covered by an arbitration agreement. The practical consequence of this exclusivity is that a court seised of a dispute that is subject to an arbitration agreement must decline jurisdiction. That is unless, as set out in Article 1448 of the Civil Procedure Code, an arbitral tribunal has not yet been seised of the dispute and the arbitration agreement is "manifestly void or manifestly inapplicable".

  • Arbitration Agreements Concluded by Agents and the Specific Authority Issue 03/05/2019 15:56

    In order to conclude an enforceable arbitration agreement, various validity conditions are required. The authority of the signatory agent to conclude an arbitration agreement on behalf of the principal is one of these requirements. In some jurisdictions, an explicit/specific authority is also required. An agent authorized with a general power of attorney, but without an explicit statement on the authority to conclude an arbitration agreement, is not entitled to conclude so on behalf of the principal. If an arbitration agreement is concluded by an agent who lacks specific authority, the arbitral tribunal’s jurisdiction may be challenged, the award may be annulled, or the enforcement of the award may be rejected.

  • New CIArb Guidelines on Witness Conferencing 25/04/2019 09:17

    On Tuesday 22 April 2019, the Chartered Institute of Arbitrators (Singapore) issued their Guidelines for Witness Conferencing in International Arbitration (the “Guidelines”),1) providing tribunals, witnesses and parties with guidance in the conduct of witness conferencing.