by Michael McIlwrath
The new international survey on arbitral practices has just been released.
This iteration (the 4th), conducted by the School of International Arbitration of Queen Mary University and White & Case, captured responses from 710 in-house counsel, external counsel specialists, and arbitrators. It sought to answer these questions: to what extent are truly harmonized practices emerging in international arbitration? And if such practices are emerging, do they reflect the preferred practices of the international arbitration community?
Some of the results provided with the Executive Summary of the survey are the following:
Selection of arbitrators
?? A significant majority of respondents (76%) prefer selection of the two co?arbitrators in a three-member tribunal by each party unilaterally. This shows that the arbitration community generally disapproves of the recent proposal calling for an end to unilateral party appointments.
?? There has been a long-standing debate about whether pre-appointment interviews with arbitrators are appropriate. The survey reveals that two-thirds of respondents have been involved in them,1 and only 12% find them inappropriate. The chief disagreement is not on whether such interviews are appropriate, but on the topics that may properly be discussed.
?? Almost three-quarters of respondents (74%) believe that party-appointed arbitrators should be allowed to exchange views with their appointing party regarding the selection of the chair.
Organising arbitral proceedings
?? The IBA Rules on the Taking of Evidence in International Arbitration (‘the IBA Rules’) are used in 60% of arbitrations: in 53% as guidelines and in 7% as binding rules. In addition, a significant majority of respondents (85%) confirm that they find the IBA Rules useful.
?? The most effective methods of expediting arbitral proceedings are (in order) ‘identification by the tribunal of the issues to be determined as soon as possible after constitution’, ‘appointment of a sole arbitrator’, and ‘limiting or excluding document production’.
?? Requests for document production are common in international arbitration: 62% of respondents said that more than half of their arbitrations involved such requests.
?? The survey confirms the widely held view that requests for document production are more frequent in the common law world: 74% of common lawyers, compared to only 21% of civil lawyers, said that 75-100% of their arbitrations involved such requests.
?? Notwithstanding the differing traditional approaches to document production in civil and common law systems, the survey reveals that 70% of respondents believe that Article 3 of the IBA Rules (‘relevant to the case and material to its outcome’) should be the applicable standard for document production in international arbitration.
Pleadings and hearings
?? Not only does sequential exchange of substantive written submissions occur much more regularly (82%) than simultaneous exchange (18%), there is also a strong preference for this type of exchange (79%).
?? The survey reveals that only a small minority (15%) of merits hearings are held outside the seat of arbitration.
?? The most common duration of a final merits hearing is 3-5 days (53%), followed by 6-10 days (23%), 1-2 days (19%) and 10+ days (5%).
?? Civil lawyers have traditionally claimed that their hearings are shorter than those of common lawyers – the survey confirms this to be true. 31% of civil lawyers said the average duration of their merits hearings was 1-2 days, compared to only 9% of common lawyers.
?? Time limits are imposed for oral submissions and/or examination of witnesses in two-thirds of arbitration hearings. Most respondents prefer some form of time limits (57%), while only 6% prefer no time limits at all (34% said it depends on the case).
The arbitral award and costs
?? How long should a tribunal take to render an award? For sole arbitrators, two-thirds of respondents believe that the award should be rendered within 3 months after the close of proceedings. For three-member tribunals, 78% of respondents believe that the award should be rendered either within 3 months (37%) or in 3 to 6 months (41%).
?? A common criticism of arbitration is that tribunals unnecessarily ‘split the baby’. Overall, respondents believe this has happened in 17% of their arbitrations, while those actually making the rulings – the arbitrators – said this occurs in only 5% of their arbitrations.
?? Tribunals allocate costs according to the result in 80% of arbitrations, and leave parties to bear their own costs and half the arbitration costs in 20% of arbitrations. However, only 5% prefer this latter approach, which shows there is a desire for tribunals to allocate costs according to the result even more frequently than they are currently doing.
?? An overwhelming majority of respondents (96%) believe that improper conduct by a party or its counsel during the proceedings should be taken into account by the tribunal when allocating costs. This sends a strong message to arbitrators that they are expected to penalise improper conduct when allocating costs.
MICHAEL MCILWRATH is Senior Counsel, Litigation, for the GE Oil & Gas Division in Florence, Italy. His experience in international arbitration includes representing the company in disputes under the rules of various international and regional arbitration institutions and under ad hoc procedures around the world, and in coordinating the activities of outside counsel in domestic court and arbitral proceedings. He has published numerous articles in the fields of international arbitration, mediation, and negotiation, and is co-author, with John Savage, of International Arbitration and Mediation: A Practical Guide (Kluwer Law International).
Michael is a member of the European Advisory Committee of CPR, and acted as an industry representative to the European Commission (Justice) in the creation of a European ADR Code of Conduct. He was Chair of the International Mediation Institute (IMI), in 2009. In addition, he was the co-vice chair with mediator Judith Meyer (and chair, Singapore ambassador at large Tommy Koh) of the IMI Independent Standards Committee. He is also a member of the board of directors of the National Center for Science Education, in Oakland, California.