Part II Commentary on the International Expedited Rules, 40 Article E-1—Scope of Expedited Procedures
Martin F Gusy, James M Hosking
Martin F. Gusy, James M. Hosking
- Time limitations (and jurisdiction) — Arbitration
40.01 The provision for expedited procedures was a new feature introduced to the ICDR Rules with the 2014 revisions. Prior to 2014, the AAA provided expedited procedures for some domestic cases and parties could agree to expedited rules, but there were no express provisions for expedited resolution of an international dispute.1
40.02 The introduction of the ICDR’s International Expedited Procedures (Expedited Procedures), and analogous provisions in other institutional rules, are a response to user demand for quicker and cheaper options in international arbitration.2 A 2015 Queen Mary study found that 92 per cent of international arbitration users surveyed favoured simplified procedures for claims under a certain value.3 Moreover, institutions that have had some form of expedited procedures for several years, such as the LCIA, SCC, and SIAC, have reported a steady increase in the number of new requests for expedited proceedings filed each year.4 In recognition of this demand, there has been a trend amongst arbitral institutions in recent years to (p. 332) introduce expedited procedures for the first time (such as the ICDR and ICC have done) or to revise existing practices to better meet user needs (such as SIAC and ACICA have done).5
40.03 The ICDR’s Expedited Procedures, like those at other institutions, have a number of features specifically aimed at controlling time and costs. These include shorter time periods for appointment of the arbitrator, filing of written submissions, holding a hearing (if required), and rendering the award.6 Under the new Expedited Procedures, the ICDR estimates that an award can be rendered as quickly as 135 days from initiation of the arbitration.7 This time period for completion of an expedited arbitration is consistent with the experience of other institutions with expedited arbitrations. For example, in 2016, the SCC reported that the average length of an arbitration under its expedited rules ranged from three to six months.8
40.04 With respect to costs, the ICDR has not introduced a separate fee schedule for arbitrations under the Expedited Procedures, as some other institutions, like the SCC and ACICA,9 have done. The ICDR will consider the ‘specific nature of the case and the amount in dispute’, however, when fixing the arbitrator’s fee.10 In addition, specific features of the Expedited Procedures, like employing a sole arbitrator (as opposed to three) and a presumption that no hearing will take place, will also reduce the likely costs of users operating under these proceedings.11
40.05 Statistics show that parties are using the ICDR’s Expedited Procedures, although arbitrations under the Expedited Procedures make up a relatively small proportion of the ICDR’s caseload. For example, in 2017, only fifty-three of the 1,026 newly filed ICDR cases were administered under the Expedited Procedures.12
40.06 Article E-1 cross-references to Article 1(4) of the main ICDR Rules, which provides the scope of applicability for the Expedited Procedures. As discussed in Chapter 1, Article 1(4) provides that the Expedited Procedures will apply automatically where no claim or counterclaim exceeds US$250,000, unless otherwise agreed by the parties or determined by the ICDR.13 Parties are (p. 333) also free to agree to application of the Expedited Procedures in any case, regardless of the size of the claim.14
40.07 Using the monetary value of claims to determine whether expedited procedures apply is also the approach taken by some other institutions, such as the ICC, HKIAC, SIAC, and Swiss Chambers. The ICDR’s US$250,000 threshold is considerably lower, however, than that used at other institutions.15 One possible explanation for this is that the ICDR looks to the value of an individual party’s claims or counterclaims to determine whether the US$250,000 threshold is met, whereas the other institutions that use this approach aggregate all parties’ claims and counterclaims to assess whether the threshold is satisfied.16
40.08 The ICDR Rules are unique in that they are one of the few sets of rules that require expedited procedures where the amount in dispute is below a certain threshold. This differs from the approach taken by, for example, the SIAC and HKIAC, which provide that the expedited procedures will only apply where the monetary value is met and upon party request and approval of the institute.17 Importantly, however, Article 1(4) caveats that the Expedited Procedures will not apply where ‘the parties agree or [the ICDR] determines otherwise’.18 This carve-out respects the parties’ autonomy to arbitrate under different procedures, if they wish.
40.09 Article E-1 makes clear that the Expedited Procedures, where they apply, are designed to ‘supplement’ the main ICDR Rules. This differs from the approach taken by the SCC and ACICIA, which have completely separate rules for expedited procedures that function independently from the main rules, and also from the approach taken by the SIAC, HKIAC, and Swiss Chambers, which fold the option for expedited procedures into the body of the main rules. The 2014 Rules Revision Committee considered whether to introduce the Expedited Procedures as stand-alone provisions or to incorporate the option for quicker timelines within the text of the main rules, but ultimately adopted this hybrid approach that allows the Expedited Procedures and ICDR Rules to work together.
(p. 334) 40.10 Article 1(4) explains how the Expedited Procedures and main Rules work together, providing: ‘The International Expedited Procedures shall be applied as described in Articles E-1 through E-10 of these Rules, in addition to any other portion of these Rules that is not in conflict with the Expedited Procedures.’ Thus, the Expedited Procedures, where they apply, will take priority over the provisions of the main Rules if there is a conflict between the two. The main Rules will fill in any gaps that are not covered by the Expedited Procedures.
1 See Michael McIlwrath, ‘Why Can’t Arbitration Go Faster? The ICDR Brings Expedited to International’, Kluwer Arbitration Blog, 19 July 2014, available at <http://kluwerarbitrationblog.com/blog/2014/07/19/why-cant-arbitration-go-faster-the-icdr-brings-expedited-to-international/> (describing a party-tailored international expedited arbitration at the ICDR before the revisions).
2 See discussion of the streamlined process the Expedited Procedures are intended to provide in para 1.51.
3 Queen Mary & White & Case LLP, 2015 International Arbitration Survey: Improvements and Innovations in International Arbitration (2015) 26, available at <http://www.arbitration.qmul.ac.uk/research/2015/>.
4 See White & Case LLP, ‘Arbitral Institutions Respond to Parties’ Needs’, 10 April 2017, available at <https://www.whitecase.com/sites/whitecase/files/files/download/publications/arbitral-institutions-respond-to-parties-needs-2017.pdf> (comparing the number of requests for expedited proceedings in 2014 to 2015 at the LCIA, SCC and SIAC).
6 See discussion of the procedural time limits under the Expedited Procedures in para 43.06.
7 B Dunning and LM Martinez, ‘In Conversation with Luis Martinez—Vice President of the International Centre for Dispute Resolution’, Clyde & Co’s International Arbitration 1/3LY (2015), at 4, available at <https://www.adr.org/sites/default/files/document_repository/Luis%20Martinez%20on%20the%20ICDR%20Rules%20-%20Clyde%20and%20Co.%20International%20Arbitration%201-3LY%20Interview.pdf>.
8 SCC Statistics 2016, available at <http://www.sccinstitute.com/statistics/>.
10 ICDR, International Arbitration Fee Schedule (Amended and Effective 1 October 2017), available at <https://www.adr.org/sites/default/files/international_arbitration_fee_schedule.pdf>.
11 See BDunning and LM Martinez, ‘In Conversation with Luis Martinez—Vice President of the International Centre for Dispute Resolution, Clyde & Co’s International Arbitration 1/3LY (2015), at 3, available at <https://www.adr.org/sites/default/files/document_repository/Luis%20Martinez%20on%20the%20ICDR%20Rules%20-%20Clyde%20and%20Co.%20International%20Arbitration%201-3LY%20Interview.pdf> (explaining that the Expedited Procedures carry a presumption that no hearing will be necessary).
13 See 2014 ICDR Rules, Art 1(4); see also discussion of the scope of application of Art 1(4) in para 1.51.
14 One obvious way in which the parties can agree to arbitration under the Expedited Procedures is to incorporate the procedures through their arbitration clause. See Bridgepointe Master Fund Ltd v Biometrx, Inc, No 09 CIV. 6874 (PAC), 2009 WL 4756440, at *3 n2 (SDNY 11 December 2009) (rejecting an argument that the ‘parties did not intend to adopt expedited procedures’ where they expressly agreed to the Expedited Procedures of the AAA Commercial Rules in their arbitration agreement).
15 See eg ICC Rules, App VI, Art 1(2) (mandating application of expedited procedures where the amount in dispute is below US$2,000,000); HKIAC Rules, Rule 41 (allowing application of the expedited procedures where the amount in disputes is below HK$25,000,000 (roughly US$3,200,000)); SIAC Rules, Rule 5.1(a) (allowing application of the expedited procedures where the amount in disputes is below SG$5,000,000 (roughly US$3,700,000)); Swiss Rules, Rule 42(2) (allowing application of the expedited procedures where the amount in disputes is below CHF1,000,000 (roughly US$1,030,000)).
16 See 2014 ICDR Rules, Art 1(4) (stating that the Expedited Procedures apply where ‘no disclosed claim or counterclaim exceeds US$250,000’) (emphasis added). Compare SIAC Rules, Rule 5.1(a) (looking to the aggregate amount in dispute); ICC Rules, Rule 30(2)(a) (looking at the ‘amount in dispute’); HKIAC Rules, Rule 41(a) (looking at the ‘aggregate of any claim and counterclaim’); Swiss Rules, Article 42 (looking at the aggregate amount in dispute).
17 See HKIAC Rules, Rule 41; SIAC Rules, Rule 5.1. There is a third approach adopted by some institutions, such as the DIS, SCC, and ACICA, in which expedited procedures will only apply where there is party agreement as to their application. See DIS Supplementary Rules for Expedited Procedures, Section 1.1; ACICA Expedited Arbitration Rules, Article 2.1; SCC Rules for Expedited Arbitration, p 2.