Can I get an arbitral award earlier than expected?

12 Dec 2023, 02 mins ago

Arbitral proceedings commonly take 1-2 years from filing of the request for arbitration to the rendering of a final award.

In extreme cases, if the respondent deliberately delays the proceedings, an applicant may wait for years before receiving an arbitral award. Similarly, from the point of view of the respondent, a lot of its money and time would be wasted if it is being maliciously dragged into arbitration proceedings, where the applicant has little or no ground for success. Indeed, time and costs are the two major concerns for all parties to international arbitration, regardless of whether you are an applicant or a respondent.

The above gives rise to a question of whether there are any legal strategies to expedite the arbitration process and obtain an arbitral award as soon as possible. Indeed, it may be possible depending on the applicable law and arbitration rules. There are two possible common strategies: expedited arbitration and early determination.

Expedited arbitration

Expedited arbitration is a streamlined and simplified procedure with a shortened time frame, which makes it possible for the parties to reach a final resolution of the dispute in a cost- and time-effective manner. However, if the parties do not find common ground in the initial arbitration agreement, a separate agreement on the application of the expedited arbitration rules will be required[1], thus rendering the procedure less practical in the event that one of the parties deliberately wants to delay the proceedings after a dispute has arisen. On the other hand, early dismissal (early determination, summary determination or other similar terms) is based on ex parte applications that can be effective in preventing bad-faith delaying behaviour by the other party.   

Many arbitration laws and rules impose a duty on arbitrators to conduct the arbitral proceedings in a manner that avoids unnecessary delay and expense. In order to facilitate the performance of the arbitral tribunal’s duties, early determination is a power given to the arbitral tribunal to determine certain claims or defences at an early stage without the need for a full hearing. Major international arbitration centres, including Singapore International Arbitration Centre (SIAC)[2], Arbitration Institute of the Stockholm Chamber of Commerce (SCC)[3], Hong Kong International Arbitration Centre (HKIAC)[4], London Court of International Arbitration (LCIA)[5], and International Chamber of Commerce (ICC)[6] have promulgated relevant rules in recent years.

Grounds for early dismissal

Legal grounds to apply for an early dismissal (early determination or summary determination) depend on the applicable arbitration rules. For example, Article 22.1 (viii) of the LCIA Arbitration Rules 2020 provides that a party may request the arbitral tribunal to dismiss a claim, defence, counterclaim, or other claims or defence based on the following grounds:

(a) where it is manifestly outside of the jurisdiction of the arbitral tribunal; or

(b) where it is inadmissible or manifestly without merit.

These are the two common grounds for early determination. However, some arbitration centres may give broader powers to the arbitral tribunal to decide summarily on whether an issue of fact or law, which is material to the outcome of the case, is, for any other reason, suitable to determination by way of summary procedure. For example, Article 39 (2) of the SCC Arbitration Rules 2023 provides that even if the facts alleged by the other party are assumed to be true, the tribunal may issue an order at the early stage when no award could be rendered in favour of that party under the applicable law.

In October 2022, the UNCITRAL Working Group II proposed to amend the wording of the early dismissal and preliminary determination clause of the UNCITRAL Arbitration Rules.  Representatives of participating States and interested stakeholders agreed that the arbitral tribunal, at the request of a party or on its own initiative, may at any time during the proceedings rule that:

(a) A claim, a counterclaim, or a counterclaim for the purposes of set-off (a “claim”) is manifestly without merit;

(b) Issues of law or fact supporting a claim are manifestly without merit; or

(c) A claim is manifestly outside of its jurisdiction, or a matter is manifestly beyond the scope of its authority.

If the new proposal is finally adopted, the updated version of the UNCITRAL Arbitration Rules may have an impact on the rules of arbitration centres around the world.

[1] UNCITRAL Arbitration Rules, Article 1.5

[2] SIAC Arbitration Rules 2016, Rule 29

[3] SCC Arbitration Rules 2023, Article 39

[4] HKIAC Administered Arbitration Rules 2018, Article 43

[5] LCIA Arbitration Rules 2020, Article 22.1 (viii)

[6] ICC 2021 Arbitration Rules, Article 22 (with Note to Parties and Arbitral Tribunals on the Conduct of the Arbitration (1 January 2021) VII.D)

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