- By Ingrid Burke, RAPSI
In an effort to bridge the gaps between current and preferred
practices, a major survey released last week is pulling back the drapes
on the emerging trends of international arbitration.
The survey, conducted by the Queen Mary, University of London’s
School of International Arbitration, features analyses of seven key
areas of international arbitration: the selection or arbitrators; the
organization of arbitral proceedings; interim measures and court
assistance; the production of documents; fact and expert witnesses;
pleadings and hearings; and the arbitral award and overall costs.
The survey was conducted in two phases: first, quantitative and
second, qualitative. During the first phase, 710 respondents completed a
written survey. These respondents included private practitioners (54%),
arbitrators (26%), as well as in-house counsel (10%) and a mix of other
relevant professionals. During the second phase, 104 practitioners
contextualized the questionnaire results by way of brief interviews.
Region-specific arbitration trends
While the survey noted region-specific trends when such proved
particularly notable, regional results were not present throughout the
course of the survey. To find out how the overall results might impact
Russia’s place in the international arbitration community, RAPSI turned
to David Goldberg, an international arbitration partner at White &
Case, LLP who divides his time between the firm’s London and Moscow
offices.
One key issue for Eastern Europe is that of its poor reputation for
compliance with tribunal-ordered interim measures (39%). In comparison,
North America and Western Europe reported the highest compliance rates,
at around 68%. According to Goldberg, “This shows that there is less
respect for the arbitral process in Eastern Europe and, as a result, a
significantly higher percentage of parties from Eastern Europe (23%)
seek enforcement of tribunal-ordered interim measures in a court,
compared to only 3% in North America, 6% in Western Europe and 10% in
Asia. This extra procedural step naturally adds additional costs to the
proceedings.”
One key trend that emerged in several different areas of the survey
was that of the differing practices of common-law and civil-law
countries. David Goldberg explained to us, however, that in practice
this poses few problems: “Divergences between common and civil lawyers -
including those from Eastern Europe and Russia - generally don't cause
too many problems as, in the absence of agreement between the parties,
the tribunal determines which procedures will apply, after taking into
account both sides’ positions. In the event that a party does not comply
with the procedures, the other party may seek to enforce them in a
court, or the tribunal may draw adverse inferences from the improper
conduct and/or take that conduct into account when allocating costs.”
Selection of arbitrators
The vast majority of respondents voiced a preference for the right of
each party to unilaterally select one co-arbitrator in three-member
tribunals. Many respondents (54%) believed that the selection of either
the chair of a three-member tribunal or that of a sole arbitrator should
be made by agreement of the parties, although a substantial number
(27%) prefer the selection of such by an arbitral institution or
appointing authority.
Attitudes were somewhat favorable toward the appropriateness of
parties conducting pre-appointment interviews with potential arbitrators
in order to gauge a given candidate’s “availability, personality and
knowledge or experience in the specific field relevant to the dispute.”
46% or respondents found such interviews appropriate in general, and 40%
found them to be appropriate under certain circumstances.
The majority of respondents found it inappropriate during
pre-appointment interviews to ask candidates about the following issues:
his or her position on the legal questions relevant to the case (84%),
whether he or she is a strict constructionist vs. someone that might be
influenced by the equities of the case (64%), or about prior views he or
she might have expressed (59%). On the other hand, questions about a
candidate’s procedural preferences and background in a given legal
field, as well as chair nomination issues, were generally considered
appropriate. In fact 74% of respondents found it appropriate for
appointing parties to discuss the appointment of a tribunal chair with
chosen candidates.
Organization of arbitral proceedings
The International Bar Association’s (IBA) Rules on the Taking of
Evidence in International Arbitration were considered useful by the
overwhelming majority (85%) of respondents. 60% regularly use the rules,
but they are only binding in 7% of cases, serving merely in an advisory
capacity in the remaining 53% of cases. As procedural flexibility is
seen as one of the key advantages of international arbitration (over,
for example, litigation), most respondents preferred to adopt the
IBA
rules for reference, rather than in a binding capacity.
41% of respondents voiced a preference for selecting the procedural
framework and timetable before the start of proceedings via an in-person
hearing, and 33% preferred to do so via a telephone or video
conference. Only 7% tended not to determine these factors prior to the
start of arbitration.
Tribunal secretaries are used in only about 35% of cases, but of
those they are used twice as frequently by civil lawyers (46%) than by
common lawyers (24%). Those who utilize tribunal secretaries find that
they increase efficiency throughout the course of proceedings. Those who
refuse their services tend to believe that “all duties should rest with
the tribunal members alone.”
The most popular means of expediting proceedings are: the prompt
selection by the tribunal of issues to be determined during proceedings
and the appointment of a sole arbitrator. The most divisive means are:
the simultaneous, as opposed to sequential, exchange of substantive
written submissions (37% for, 44% against), the imposition of short time
limits for the exchange of such submissions (48% for, 42% against), and
the imposition of page limits for the exchange of such submissions (31%
for, 39% against).
Fast-track arbitrations as a means of ensuring expediency are rare.
Only 6% of respondents had engaged in a significant number (six or more)
fast-track arbitrations in the past five years, and 54% had not engaged
in any during that time period. Those interviewed about their
experience in the field generally found that fast-track arbitration was
appropriate in simple cases, but inappropriate for more complex cases.
In the latter, fast-track arbitration was generally found to
“[jeopardize] the quality of the award.”
Interim measures and court assistance
Requests for interim measures to courts and arbitral tribunals were
rare. 77% of respondents attested to having had experience with such
claims to arbitral tribunals in less than a quarter of cases, and 89%
had dealt with such claims to courts in less than a quarter of cases.
Only 1% of respondents reported having experienced claims for interim
relief to either courts or arbitral tribunals in 75-100% of cases.
Document production
Requests for document production are much more common among common
lawyers than civil lawyers. The former reported having experienced
document-production requests by one or more parties in 75-100% of cases
over the past five years. Only 21% of the latter had dealt with such
requests in 75-100% of cases, and 35% had dealt with them in a quarter
or less of all cases.
In order to deal with this discrepancy, in light of the obvious fact
that international arbitration requires lawyers from both traditions to
work together, the majority (70%) of respondents believed that the IBA
Rules should govern document production. The Rules stipulate for the
production of documents that are “relevant to the case and material to
its outcome.”
While only 3% of respondents favored a prohibition of all document
production, 41% felt that the documents obtained through document
production materially affected the outcome of less than a quarter of
cases.
Fact and expert witnesses
In a slim majority (48%) of cases, fact witness evidence was offered
by an exchange of written witness statements and direct examination at
the hearing. In 39% of cases, witness evidence was offered by written
statement with little to nothing in the way of direct examination.
Respondents were mixed on the question of whether written statements
could effectively replace direct examination at hearings, with 59%
viewing this as an adequate method and 34% disagreeing. A significant
majority of respondents (63%) argued that attorneys should be charged
with questioning witnesses, rather than the tribunal itself.
Cross-examination is an enormously favored practice, with 90% or
respondents having urged the effectiveness of such for fact witnesses,
and 86% doing so for expert witnesses.
Witness conferencing is a theoretically (but not so much practically)
emerging trend wherein fact or expert witnesses from two or more
parties are questioned together on a given issue by the tribunal or
attorneys. In practice, very few (1-3%) respondents reported that they
had experienced it in 75-100% of cases, but 62% believed that it should
be done more frequently with expert witnesses.
Respondents were mixed on who should appoint an expert witness. 43%
believed they should be chosen by the parties, 31% by the tribunal, and
28% thought neither option outshone the other.
In the vast majority of cases, expert witnesses had not been directed
to confer in advance of a hearing, but 54% or respondents thought that
this would be a useful practice.
Pleadings and hearings
In most (82%) cases, substantive written submissions were exchanged
sequentially, rather than simultaneously. 79% of respondents found a
sequential exchange ideal. 53% of such submissions were accompanied by
exhibits, witness statements, and expert reports, and 59% of respondents
preferred this method, as opposed to splitting up the various forms of
submissions and delivering them at different times.
In most (63%) of cases, the following written submissions were
exchanged: a statement of the case, the defense statement, a reply, and a
rejoinder.
Respondents were fairly evenly split when asked whether substantive
written submissions should be limited, with 45% responding favorably and
47% against such restrictions.
There was no clear answer on the preferences of respondents with
regard to closing submissions. 28% favored post-hearing briefs, and 13%
favored oral closing submissions. 24% preferred both, and 32% felt that
this was really a case-specific question.
Arbitral award and costs
Asked about the appropriate time frame for the issuance of an award,
most respondents believed the sooner, the better. The vast majority felt
that sole arbitrators should be expected to render an award within
three months, and 0% thought such could take 9-12 months. Most (41%)
thought that three-member tribunals should be afforded three to six
months, although a substantial number (37%) thought they too should be
expected to reach a decision in less than three months.
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