Managing international arbitrations

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Efficiency is a top priority for users of international arbitration and is one of the reasons why they select arbitration over litigation. Due to the increasing complexity of international arbitrations which often involve multiple parties and multiple contracts robust and active management is more important today than ever. While typically viewed as a responsibility of the tribunal, the efficient management of arbitration is a responsibility that is shared with the parties. Thanks to developments in national arbitration legislation and procedural rules, the parties and the tribunal have a variety of tools available.

GUIDANCE FOR ARBITRATION USERS

Efficient management of arbitration begins from the negotiation of the arbitration agreement. A small investment of time in this often overlooked clause can help avoid costly and time consuming procedural disputes later. Parties should select a pro-arbitration seat that will act in support of arbitration and refrain from unwarranted interference. Parties should insist upon administration by a respected international or regional institution and select modern procedural rules.

Craig Celniker
Craig Celniker

Parties should conclude structured arbitration agreements that tailor the procedure to the value of the dispute, or consider agreeing in advance to the application of new expedited procedures. Parties should consider recording their mutual expectations for the taking of evidence, including the production of documents. Parties may consider agreeing to the application of the International Bar Association Rules on the Taking of Evidence in International Arbitration.

Once a dispute has arisen, parties should conduct an early case assessment and analyze their decision to arbitrate thoroughly. If the dispute involves multiple contracts, parties should consider relying on new procedural rules that allow the commencement of a single arbitration for multiple contracts and the consolidation of multiple arbitrations.

Parties should select their party-appointed arbitrator with great care and pursue appropriate opportunities to provide input on the selection of the chairperson. Parties should always seek the appointment of arbitrators known to be robust and active case managers. Throughout the arbitration, the parties should participate in good faith, co-operating and compromising where not strategically disadvantageous.

TOOLS AVAILABLE TO TRIBUNALS

The tribunal holds primary responsibility for ensuring the efficient management of arbitration. Most procedural rules empower the tribunal to conduct the case as it believes appropriate. It is imperative that arbitrators strive to be active and robust case managers who resolve disputes in an efficient manner. Some institutions have imposed through their rules an affirmative duty on arbitrators to manage arbitrations quickly and efficiently.

Sarah Thomas
Sarah Thomas

Arbitrators should only accept appointments if they have adequate availability. The most effective arbitrators set mutual expectations – especially as to “ground rules” – early in the arbitration. To ensure that the parties are aligned, the tribunal may consider convening a procedural conference as soon as practicable after its formation to set a schedule and expectations for the arbitration. Some institutions require this.

As soon as possible after this, it is helpful for the tribunal to issue a procedural order, setting out a comprehensive briefing schedule, and practices and procedures, that will govern the conduct of the arbitration.

In order to streamline the proceeding, it is open to the tribunal to dispose of preliminary questions (e.g., jurisdiction, standing, statute of limitations) prior to briefing on the dispute. This is often advisable; partial awards on key issues may streamline the arbitration and even encourage settlement.

If the calculation of damages is likely to be complex, the tribunal may find it beneficial to bifurcate the arbitration into liability and quantum phases. The tribunal should set a date for the final in-person hearing in the procedural order and then stick to it. It is preferable from an efficiency perspective to hold any intermediate conferences by telephone.

Prior to the final hearing, the tribunal should consider convening a conference to align expectations and confirm hearing logistics. The most effective arbitrators often use the pre-hearing conference to narrow the dispute by providing guidance on key issues that parties should address at the hearing.

To further shorten hearing time, it is common for tribunals to direct that witness statements must stand as direct testimony. The tribunal can ensure the efficiency and fairness of the hearing by imposing strict time limits for opening statements, witness examination and closing statements. The tribunal should consider limiting or excluding new arguments and evidence at the hearing.

Effective arbitrators do not wait for the hearing to be over before starting deliberations. They meet to deliberate at appropriate milestones, enabling the tribunal to identify and narrow issues in dispute. Arbitrators often direct the parties to submit post-hearing briefs, often targeted to key issues relevant to the tribunal’s deliberations. These are a helpful aid in the drafting of the award. Most importantly, the tribunal should render its award promptly.

CRAIG CELNIKER is a partner and SARAH THOMAS is an associate at Morrison Foerster in Hong Kong