Monday, August 10, 2015

Effective Management of Arbitration: Lessons From the Revised 2012 International Chamber of Commerce Rules

It is often said that resolving disputes through arbitration can permit flexibility, innovation and cost/time saving. This is more likely when a client and legal counsel give thought and effort to develop early and effective case management. Efficiency in time and cost is best achieved when both a client and their legal advisors have a clear strategy, and work towards it together.

The 2012 International Chamber of Commerce (the “2012 ICC”) rules were held out as a gold standard in assisting parties to more effectively manage their arbitral proceedings. This article looks at options that parties and their legal advisors should consider at the preliminary stages, and revisit during the arbitration process.

Although the commentary to the 2012 ICC rules encourages parties and counsel to consider these issues, the same broadly apply to any form of arbitration, whether institutional or ad hoc:

  1. If a Request for Arbitration (“Request”) is filed, consider desired result and cost benefit

  2. If the purpose of filing a Request is to encourage early settlement, a more detailed Request can be a good investment. Further, it can reduce the need for multiple rounds of submissions. If time to resolve the dispute is of the essence, or the case is particularly technical and/or it is likely a hearing will be required, a shorter Request may be appropriate.

    A similar cost/benefit analysis should be undertaken for any answer filed in response to the Request. It is at this stage that a Respondent may wish to undertake a thorough evaluation of the merits of its case and consider if early settlement is commercially and strategically advantageous.

  3. Tailor a procedure and timetable to best suit the dispute

  4. Most rules such as the ICC, LCIA and UNCITRAL do not impose on the parties a procedural formula. Thought should be given at the earliest to the procedure that best matches the present case. Parties should not just follow “boiler plate” solutions. Parties should however consider how time and cost can be saved at each step, and use case management conferences to facilitate this.

  5. Early Determination of Issues

  6. Cost and time can be saved by seeking from the Tribunal early determination of issues such as whether:

    • the Tribunal has jurisdiction to hear the dispute (or part thereof)?
    • there are any time bar issues which debar the claim or defence?
    • the parties have capacity to proceed?

  7. Match resources to complexity and value of the case

  8. Always consider the cost versus benefit of any application, additional rounds of documents, replies and witness statements. Especially in smaller cases, legal advisors should consider expedited procedures.

The take-away from this brief discussion of early and considered case management is that lawyers and clients/in-house counsel together should discuss and carefully consider the cost benefit of resources utilised. In this way, the flexibility offered by arbitration can be best utilised to cost effectively resolve disputes.