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Optimising arbitration: Addressing arbitration’s current sticking points

by Matthew Rushton on 12 Nov 2013

optimising arbitration

On 2 December, the Singapore International Arbitration Forum 2013 will host ‘Adventures on Blank Sheets’. This unusual event will explore the creation of a completely new form of dispute resolution, a model that may enable meaningful reforms to the arbitration arena.

This event, yet again highlights the many flaws that exist in arbitration, so it is understandable that disputants might be sceptical before launching proceedings. Various reforms over the years have addressed some underlying problems, but many arbitrators, counsel and corporates would still prefer proceedings to be more flexible, shorter and less costly.

 There’s no doubt that international arbitration has increased dramatically over the last decade. Much of this increase is driven by the rise in global trade and commerce. There are more disputes in more parts of the world and arbitration is no longer the sole domain of Europe and the United States.

But with its growing popularity, it has faced greater scrutiny of its competence to resolve disputes in a satisfactory and efficient manner. Arbitration has always represented an alternative to litigation, but there are now instances where litigation is considered the more attractive alternative to arbitration. Would the forefathers of arbitration have ever considered the irony?

Litigation, is of course, benefitting from the same economic drivers as arbitration. London, for instance, has successfully positioned itself as a global dispute resolution hub, with the courts hearing a huge number of disputes that have little or no nexus with the UK itself. Germany too is hearing international disputes and can deliver proceedings in English according to Michael McIlwrath, Senior Counsel – Litigation at GE Oil and Gas.

So where does this leave arbitration? Several initiatives have been launched to deal with flaws in the way it is delivered. The International Chamber of Commerce (ICC) published a revised version of its Rules of Arbitration last year, with a strong emphasis on time and cost efficiency.

In 2010, Debevoise & Plimpton issued a protocol to promote efficiency in international arbitration. The protocol includes requesting arbitrators to confirm their availability for hearings and adhere to an ‘expeditious schedule’. It also invites arbitrators to an issue an award within three months of the hearing or post-hearing briefs.

David W. Rivkin, a litigation partner at Debevoise says that the arbitration community has made considerable progress, but there is still much to achieve. ‘We still have a long way to go. It often takes arbitrators too long to issue awards, no matter how efficiently you have handled the case,’ he says. ‘I think the community relies too much on the same arbitrators, who then become too overbooked and busy. They have a lot of hearings back-to-back and are not able to focus on getting awards out. There is a natural human tendency that when you’re without a fixed deadline, you put off what is not due tomorrow.’

McIlwrath would like greater transparency in the sector so that arbitration users can make informed choices when selecting arbitrators. He says that data should be made available that spells out, for instance, how long an arbitrator typically takes to deliver an award after the end of a hearing.

Rivkin though says that disputing parties and their counsel should still take some responsibility for the progress of a case. ‘In the very first meeting with arbitrators, you should set a schedule. The parties and arbitrators should discuss what kind of award they want, how detailed it needs to be and how soon it should be rendered,’ he explains.

The keynote speaker at the ‘Adventures on Blank Sheets’ event, Toby Landau QC, a barrister and arbitrator at Essex Court Chambers, continues to be frustrated by the loss of flexibility that has infected the arbitration process over the years. He believes too many rules and practices that have permeated the scene. He says that attendees of the forum will be encouraged to contribute ‘off the wall’ ideas and hopes that this will encourage meaningful changes to the arbitration arena, rather than the piecemeal initiatives that have been introduced over the last decade. And while Landau and other delegates go forth on their adventures, for the time being at least, disputants will just have to make the most of an imperfect regime.

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Topics: International Arbitration

Matthew Rushton

Written by Matthew Rushton