The revised rules are designed to increase efficiency and reduce costs and include a comprehensive framework for expedited procedures in international arbitration.
International arbitration has gained increasing acceptance and popularity around the world as a mechanism to resolve cross-border disputes. In recent years, however, complaints have grown louder that international arbitration has come to resemble litigation in U.S. courts, particularly with respect to increased costs and delays. This frustration has led some businesses to turn away from international arbitration—and particularly institutional international arbitration—after concluding that the expense and time likely to be incurred outweigh the advantages.
The International Centre for Dispute Resolution (“ICDR”), the international arm of the American Arbitration Association, recently released revised international arbitration rules that address some of these concerns. The revised rules, which entered into effect on June 1, 2014, introduce noteworthy improvements such as:
- The ability to consolidate arbitration proceedings.
- Procedures to encourage mediation.
- The designation of the ICDR list method as the default method of appointment of arbitrators when the parties do not agree on another method of appointment.
- The express adoption of the international approach to document production, under which discovery is essentially limited to an exchange of documents, and depositions, interrogatories, and requests for admissions are declared inappropriate.
The most significant revision, however, may be the introduction of the International Expedited Procedures, which automatically apply to any case where no claim or counterclaim exceeds $250,000 (unless the parties agree otherwise) and are available in all other cases upon agreement by the parties. Below are the highlights of these procedures:
- The parties must submit all evidence they intend to rely on when they file their Notice of Arbitration or their Answer.
- A sole arbitrator will be chosen from a list of candidates that will be provided by the ICDR. If the parties are unable to reach agreement, the ICDR has the authority to appoint the arbitrator.
- A procedural order must be issued within 14 days of the appointment of the arbitrator.
- It is assumed that claims up to $100,000 will be decided based on the written submissions alone, which would have to be presented within 60 days of the date of the procedural order.
- Any oral hearing should also take place within 60 days of the procedural order.
- Unless otherwise agreed by the parties, the award must be issued no later than 30 days after the close of the oral hearing or the time established for final written submissions.
These expedited procedures may be attractive to entities that have shied away from international arbitration in the past but are still interested in a cost-effective and efficient forum to resolve cross-border disputes of a reduced magnitude. In addition, features such as the requirement to present detailed submissions and evidence in the early stages of the proceedings and the timetables to ensure a complete submission of the case on an accelerated basis may make these procedures attractive even in cases involving claims of a higher magnitude.
The revised rules, including the new International Expedited Procedures, are available here.