As an alternative method
As an alternative method, international commercial arbitration provides for the resolution of disputes based on the existence of an agreement between the parties’. One of the leading principles in international commercial arbitration is that of party autonomy. As a cornerstone principle, party autonomy provides for the freedom of parties to conclude as well as regulate the details of their contractual relationships. The party autonomy principle makes international commercial arbitration a popular recourse due to the offered procedural flexibility in choosing the form of arbitration, substantive law governing their contract, place of arbitration, the arbitrators, etc. As such, the party autonomy principle has a vital role in the tailoring of the arbitral proceedings.
Besides the flexibility offered based on the party autonomy, there are specific limitations applied against this principle such as in grounds of the mandatory law and the countries’ public policy. In addition, limitations on party autonomy are witnessed also in the different arbitration rules of various eminent arbitration institutions. As such, arbitration institutions have incorporated certain provisions with regard to the pace of the process in order to reduce costs and delays while increasing efficiency.
The goal of this mini thesis is to examine how the principle of party autonomy collides with the expedited proceedings in international commercial arbitration. In particular, special attention will be given to evaluate if there is limitation on the party autonomy principle by the so called “Expedited Procedure Provisions” (EPP) under the 2017 International Chamber of Commerce (ICC) Rules. In more concrete terms, provisions regarding the resolution of disputes by a sole arbitrator even in cases when the arbitration agreement provides otherwise and the limit on the scope and length of submissions and witness statements by parties will be taken into consideration. In addition, the connection between the present and future developments will be observed in order to determine what the future of arbitration will resemble in this specific matter.
MethodologyThis mini-thesis is divided into four sections. Initially, an overview of the introduction and applicability of the expedited procedure provisions of ICC will be presented. Afterwards, the focus will be centered on the issue of collision between the party autonomy principle and the administration of the arbitration proceedings by a sole arbitrator. Thereafter, the issue of the power of the Tribunal to limit the scope of the parties’ submissions and statements will be elaborated. Lastly, a conclusion answering the research question and also including potential developments in relation to the expeditiousness in arbitration proceedings will be explained.
An overview on the ICC expedited procedure provisions
The ICC represents the preferred arbitration institution for parties to resolve their disputes. As of 1 March 2017, the new rules of the ICC entered into force. A new feature of these rules was provision 30 which introduced the expedited procedure provisions in order to minimize delays in the arbitration proceedings.
The applicability of the expedited procedure provisions is automatic in those cases where parties have agreed to arbitrate under the ICC Rules and in which the dispute value does not exceed US $2 million. On the other hand, an omission to their applicability is when parties explicitly opt out in the arbitration agreement. Additionally, the application of such procedures even in higher value disputes is possible. Consequently, in circumstances where parties wish for these procedures to apply in cases where the dispute value exceeds US $2 million, there is an opportunity to opt-in.
The main changes that the expedited procedure provisions brought relate to the appointment of arbitrators, the time frame for the rendering of an arbitral award, the case management and limit on the time and scope of submissions. This paper will focus on the issue of appointment of arbitrators and the limit on the scope of submissions and statements.
The inclusion of these provisions has shown to be successful and necessary due to the fact that since its entry into force interest by different parties of various countries has sparked. In addition, there were no delays witnessed on those cases administered under the expedited procedure provisions as the time limit of six months to render the arbitral award was adhered to by the sole arbitrator.
Party autonomy and the administration of arbitral proceedings by a sole arbitratorAn important and well established characteristic of international commercial arbitration has been the freedom of parties to select the panel of arbitrators, regulated with various legislations, regulations, etc. Dependent on many factors, the parties each select one arbitrator while the third arbitrator is usually appointed by an agreement of the parties, or in other circumstances depending on the agreement and the rules they adhere to, by an appointing authority. Although the aforementioned procedure is highly in compliance with the autonomy of parties, it may take a long time until the constitution of the arbitral tribunal.
The relevance of party autonomy principle in relation to the selection of arbitrators has been recognized by several international conventions including the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The latter provides that the enforcement of an award may be refused if the constitution of the arbitral tribunal was not in accordance with the arbitration agreement between the parties.
Nevertheless, additional provisions defining the scope of the power of the parties regarding the appointment of arbitrators have been introduced. As the research topic at hand focuses in the ICC Rules, the aforementioned issue will be examined under the light of the expedited procedure provisions of ICC. Article 2 (1) of Appendix VI on the expedited procedure provisions stipulates that one sole arbitrator can be appointed by the ICC to render the arbitral award even if the arbitration agreement provides for a panel of three arbitrators.
The abovementioned approach has been at first criticized for several reasons. As such, the expedited provisions provide for a platform of increased chances of potential claims for violation of due process and setting aside the arbitral award. Moreover, due to the six month time frame for rendering of the arbitral award the verdict may not always be correctly adopted by a sole arbitrator lacking to test opinions with a panel of arbitrators in complex legal cases. And most importantly, the issue of the party autonomy prevailing is raised.
The main feature that distinguishes the ICC expedited procedure provisions from the other sets of rules is that it intended to ensure that the party autonomy principle is not violated. As such, the set dispute value for the application of the expedited procedures under US$ 2 million and the conduct of arbitration proceedings by one sole arbitrator was done in accordance with past case experiences. Consequently, based on the ICC statistics for the past 10 years, before the introduction of the expedited procedure provisions, the majority of cases revolved around that specific sum and 80% of the cases were conducted by a sole arbitrator.
Furthermore, Article 30 of the ICC Rules specifies that when the parties agree to arbitrate under the ICC Rules, they thereafter agree to the supremacy of the expedited procedure provisions over the terms agreed on the arbitration agreement. This approach by ICC was a reasonable step undertaken in order to close loopholes where potential claims by parties could be raised. Such was the case in proceedings brought before the Singapore High Court in AQZ v ARA where it was decided that the adherence of the parties to the SIAC Rules meant that a sole arbitrator could decide the dispute. Differently from the ICC Rules, the SIAC Rules did not contain such specific provision.
The prevalent party autonomy principle is further safeguarded as it is possible for parties to undergo the expedited procedure provisions and also to have an arbitration panel even of three members. As such, the parties in their arbitration agreement have to expressly state that potential disputes shall be settled in accordance with the ICC Rules, and even when the expedited procedure provisions apply, the number of arbitrators shall be three. Nonetheless, in cases when parties have not provided for such specification in the arbitration agreement, the autonomy of parties is respected as parties are given the opportunity to jointly agree on the appointment of the sole arbitrator.
Party autonomy and the limit on the exchange of their written submissions and statementsAnother feature included in the expedited procedure provisions of the ICC Rules is that no new claims can be introduced by the parties after the constitution of the arbitral tribunal. Exceptions to this rule can only be approved by the Tribunal if so it finds necessary. Consequently, claims raised after the Request or Answer for Arbitration is sent will be excluded by the Arbitral Tribunal.
The difference here lies in the imposed time limit in the general Rules, being after the Terms of Reference are drawn. Hence, the Tribunal is challenged to offer expeditiousness and at the same time allow no space for due process violation claims.
In order to prevent the main delays in arbitration proceedings which are caused by the parties themselves, a limit on the exchange of written submissions and statements is put. Hence, the Tribunal can exercise its power with regards to the limitation in the scope and length of written submissions and witness statements. Nevertheless, the ICC paid attention once more for the power of the Tribunal not to override the principle of party autonomy. As such, within in the provision, the limit in the scope and length of submissions is foreseen to be undertaken only after consultation with the parties.
ConclusionThe regular arbitration proceedings are associated with high costs for the parties and lengthy procedures. As such, being aware of the recent developments towards the addition of expeditiousness provisions in rules of arbitration institutions regarding the conduct of arbitration proceedings, the raise of expeditiousness as one of the pillars of arbitration is on the horizon.The aforementioned will have its benefits as parties will have their disputes resolved within a short period of time and at a lower price.
From the research conducted for this mini-thesis, it is observed that the ICC Rules including its expedited procedure provisions do not limit the party autonomy. On the contrary, it provides for a unique model in how the core arbitration principle of the autonomy of parties should be in balance with the fast track arbitration procedures.
The reasoning behind the above-mentioned statement consists on the fact that the parties have the freedom to choose if they wish for these procedure provisions to apply. As such, parties wishing to avoid its applicability can do that by opting out in their agreement. In addition, in my opinion the autonomy of parties is not limited when it comes to the administration of the arbitral proceedings by a sole arbitrator neither from the limit on the exchange of written submissions and the introduction of new claims. This due to the fact that an exemption to the limits imposed is possible in case the Tribunal finds it necessary. As for the conduct of proceedings by a sole arbitrator, the party autonomy is not limited as in principle, the arbitrator is appointed by an agreement between the parties. Furthermore, if the wish of the parties is for the dispute to be determined only by a panel of three arbitrators, such opportunity is possible under the expedited procedure provisions. Consequently, a panel of three arbitrators under the expedited procedure provisions will decide an issue when the parties have expressly specified such choice in their arbitration agreement. Besides safeguarding the party autonomy in arbitration, I deem that the rendering of the arbitral award by a sole arbitrator also translates into a wider availability of other arbitrators for other cases.