The arbitral procedure shall provide a fair and efficient process for resolving a dispute, and it should be conducted in a manner that avoids unnecessary delays and expenses. However, users of both domestic and international arbitration have complained for more than 30 years that it is slow and expensive. But it doesn’t have to be. Arbitration is based on the contract of the parties. It is flexible, and the parties can adapt the procedure to the needs of the case and their expectations and wishes. Therefore, subject to mandatory provisions of the applicable arbitration law, all participants—the arbitrator or arbitration tribunal, the parties and their counsel—can help make the arbitration process quicker, more efficient and cheaper.
There are many ways to reduce delays and expenses.
Many arbitration institutions have published reports on how to increase efficiency, thereby reducing the time and cost of arbitral proceedings; for example, the ICC Arbitration Commission Report on Controlling Time and Costs in Arbitration (2007), the CEDR Commission on Settlement in International Arbitration Final Report (2009), the CCA Protocols for Expeditious, Cost-Effective Commercial Arbitration (2010), the JAMS Recommended Arbitration Discovery Protocols for Domestic Commercial Cases (2010), the ICC Case Management Techniques (2012), the UNCITRAL Notes on Organizing Arbitral Proceedings (2016), the IMI report on Arbitrator Techniques and their (direct or potential) Effect on Settlement (2017) and the ICC Commission report on Facilitating Settlement in International Arbitration (2023). All these reports explore ideas about what can be done to make arbitration more user friendly, efficient and cost-effective.
The arbitrators, counsel and parties should take guidance from these reports if they desire to create an efficient and less expensive procedure that corresponds to the complexity of the dispute, the amount in dispute, and the expectations and wishes of the parties.
The arbitrator should guide the parties through a more efficient and less expensive arbitration proceeding by:
- being proactive and prepared yet balanced;
- having studied the request for arbitration and the response, and understanding the subject matter of the dispute prior to planning the case management conference (CMC);
- sending to the parties well in advance of the CMC a detailed agenda with all the topics to be discussed, including ideas on how to create a cost effective and efficient proceeding;
- asking counsel to discuss the agenda items of the CMC in advance and encouraging them to agree upon as many items as possible prior to the CMC;
- encouraging the parties’ representatives to attend the CMC, because their presence will help them understand the features, complexities and cost implications, which may enhance the possibility of an early settlement;
- organizing a well-prepared first CMC;
- addressing the discovery process and limiting it to specified documents that are directly relevant to significant issues and material to the outcome of the case;
- limiting e-discovery to sources used in the ordinary course of business;
- suggesting a mid-arbitration conference so that each party can understand the other party’s position better;
- asking in the mid-arbitration conference probing questions that may help the parties to better assess the likelihood of success or to rethink such influences as overconfidence, confirmation bias and reactive devaluation;
- giving guidance on what the arbitrator sees as the relevant issues at stake and the burden of proof, and allowing the parties to learn whether the arbitrator understands the case (this is different from giving the parties a nonbinding and preliminary assessment of the case, as is done especially in Germanic countries or under the Prague Rules);
- giving some hints on the strengths and weaknesses of their respective cases subject to the parties’ agreement;
- including in the timetable after the mid-arbitration conference a window for a settlement (or mediation) meeting, which the parties may or may not use; such settlement conference should not involve the arbitrator. In the settlement discussions, the parties may even arrive at a solution that cannot be achieved in an award;
- organizing an efficient hearing, if the case doesn’t settle;
- limiting the evidence presented to the disputed facts;
- agreeing with the parties on a page limit for the post-hearing briefs; and
- rendering the award within one month after the post-hearing briefs are received.
In addition, the parties and their counsel should cooperate to increase the efficiency of the process and to reduce costs by:
- agreeing upon a tighter schedule, avoiding unnecessary delays;
- accepting that arbitration is not litigation;
- organizing an efficient discovery process that is limited to what a party needs to prove their case (“smoking guns” are rarely found in the discovered documents);
- suggesting that each party shall advance the cost of the other party for the discovery of documents process subject to a final cost decision in the award;
- concentrating the submissions to the facts and legal arguments that are relevant and material for deciding the dispute, especially after the arbitrator has discussed with the parties the issues deemed relevant;
- reviewing the prospects of the case with the party after the first round of submissions, which can make them more realistic about their prospects and more open and interested in settlement; and
- organizing a joint bundle of documentary evidence.
Arbitration is a consensual process. Arbitrators, counsel and parties can and should create for each dispute an arbitration proceeding that is fair, speedy, efficient and cost-effective, but this requires the efforts of all participants. The arbitrators should take the lead and seek the cooperation of the parties and counsel in the first CMC to tailor an efficient and cost-effective process.
