On 14 December 2023, the Arbitration Institute of the Finland Chamber of Commerce (the "Institute") announced 1 the revised Arbitration Rules of the Finland Chamber of Commerce, which came into force on 1 January 2024 (the "2024 FAI Arbitration Rules"). As of 18 March 2024, the Institute also appointed a new Secretary General, Mr. Henrik Sajakorpi. 2
The 2024 FAI Arbitration Rules are the result of an over 100-year-old history of arbitration in Finland. The first version of the rules was prepared in 1910 by the Vaasa Tradesmen's Association, followed by the creation in 1911 of the Helsinki Arbitration Board of Commerce, Industry, and Shipping, which was renamed in 1920 to Helsinki Arbitration Board, in 1928 to the Board of Arbitration of the Central Chamber of Commerce of Finland, and in 2011 to the Finland Chamber of Commerce. 3 The arbitration rules were previously amended in 1961, 1979, 1993, 2004 (with the establishment of expedited arbitration rules), 2013, and 2020. 4
Today, the Arbitration Institute of the Finland Chamber of Commerce administers both domestic and international arbitrations. In 2023, the Institute registered 71 arbitrations. 5 The Institute's caseload in 2023 comprised 64.8% domestic arbitrations and 35.2% international arbitrations. 6 The median duration of arbitration under the FAI arbitration rules in cases where a final award was rendered was 8.9 months in 2023, which is short. 7
We will discuss several new features of the 2024 FAI Arbitration Rules in the following paragraphs.
Model Arbitration Clause under the 2024 FAI Arbitration Rules
Parties wishing to include the possibility to initiate an FAI arbitration in case a dispute arises may include in their contract the following model arbitration clause, which is attached to the 2024 FAI Arbitration Rules:
Any dispute, controversy or claim arising out of or relating to this contract, or the breach, termination or validity thereof, shall be finally settled by arbitration in accordance with the Arbitration Rules of the Finland Chamber of Commerce.
The 2024 FAI Arbitration Rules also specify that the parties may consider adding the following particulars in their arbitration clause:
- The number of arbitrators (one or three);
- The seat of arbitration (town and country); and
- The language of arbitration.
Starting an FAI Arbitration
The initiation of arbitration is done by submission of a Request for Arbitration to the Institute, which shall contain the following information: 8
(a) the names and contact details of the parties and of their counsel or other representatives;
(b) identification of and, where possible, a copy of the arbitration agreement under which the dispute is to be settled;
(c) identification of any contract, other legal instrument or relationship out of or in relation to which the dispute arises;
(d) a brief description of the nature and circumstances of the dispute giving rise to the claims;
(e) where claims are made under more than one arbitration agreement, identification of the arbitration agreement under which each claim is made;
(f) a preliminary statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims;
(g) the claimant's observations or proposals as to the number of arbitrators, the language, the seat of arbitration and the law or rules of law applicable to the substance of the dispute;
(h) if the arbitration agreement provides for three arbitrators, and the parties have not agreed otherwise, the name and contact details of the arbitrator nominated by the claimant;
(i) the claimant's possible observations to the effect that the Expedited Rules would be more appropriate for the conduct of the arbitration than the Rules; and
(j) proof of payment of the Filing Fee referred to in Article 7.
Filing Fee and Costs of Arbitration
As indicated, the Request for Arbitration shall be accompanied by proof of payment of a filing fee. As of 1 January 2024, the filing fee required under the 2024 FAI Arbitration Rules is EUR 3,000. 9 This fee is non-refundable. 10 The same fee is payable should the respondent raise a set-off claim or a counterclaim either in the Answer to the Request for Arbitration or subsequently. 11
As of 1 January 2024, the Institute also updated the costs of arbitration figuring in Appendix II of the 2024 FAI Arbitration Rules, justifying the increase by the fact that "inflation between June 2017 and end of year 2023 has been close to 20%". 12 Thus, costs were updated "with an approximate increase of 15% to the FAI Administrative Fee and with an approximate increase of 20% to the fee of the arbitrator." 13 Parties wishing to obtain an estimate of arbitration costs may use the Cost Calculator available on the Institute's website.
Amount in Dispute
Under Article 6.3(f) of the 2024 FAI Arbitration Rules, the Request for Arbitration shall contain "a preliminary statement of the relief sought, together with the amounts of any quantified claims and, to the extent possible, an estimate of the monetary value of any other claims".
The 2024 FAI Arbitration Rules also contain a rule permitting the Institute to determine the amount in dispute and prevent a scenario in which "the amount of dispute has been purposefully deflated or inflated." 14 Article 2.2(d) of Appendix II provides that "[w]here the amount in dispute cannot be ascertained, the Institute shall determine the amount in dispute taking into account all relevant circumstances. The Institute shall determine the amount in dispute in other exceptional circumstances."
New Time Limit to Nominate Sole Arbitrator
The 2024 FAI Arbitration Rules also contain a new provision regarding the timing of the joint appointment of a sole arbitrator, which should intervene "within 10 days from the date on which the Answer was received by the claimant." 15 The previous version of the rules stipulated that such a nomination shall intervene within the same time limit on which the Answer is due. As indicated by the Institute, this rule was "viewed as problematic, as the claimant will have to participate in nominating the arbitrator before it has seen the respondent's Answer." 16 Therefore, by allowing the parties to jointly nominate the sole arbitrator within 10 additional days, the new 2024 FAI Arbitration Rules took a more pragmatic approach.
Third-Party Funding under the 2024 FAI Arbitration Rules
The 2024 Arbitration Rules contain a new provision – Article 21.5 – requiring the parties to disclose any third-party funding of their case:
Each party shall promptly inform in writing the Institute, the arbitral tribunal and the other parties of the existence and identity of any third party, which has entered into an arrangement for the funding of claims or defences in the arbitration, and under which it has an economic interest in the outcome of the arbitration.
As reported by the Institute, the purpose of this addition to the 2024 FAI Arbitration Rules "is to further safeguard the impartiality and independence of arbitrators. Similar provisions have been adopted to other institutional rules." 17
Conclusion
While resorting to arbitration under the Arbitration Rules of the Arbitration Institute of the Finland Chamber of Commerce is mainly used by Finnish parties, 18 the 2024 FAI Arbitration Rules undoubtedly encompass the recent trends in international arbitration and are comparable to the arbitration rules of better-known arbitration institutions, such as the ICC or SCC.
Footnotes
1 "Revised FAI Arbitration Rules and Rules for Expedited Arbitration Enter into Force on 1 January 2024", website of the Arbitration Institute of the Finland Chamber of Commerce.
2 "Henrik Sajakorpi Appointed FAI Secretary General as of 18 March 2024", official website of the Arbitration Institute of the Finland Chamber of Commerce.
3 History of the FAI, official website of the Arbitration Institute of the Finland Chamber of Commerce.
4 History of the FAI, official website of the Arbitration Institute of the Finland Chamber of Commerce.
5 2023 Statistics published on the website of the Arbitration Institute of the Finland Chamber of Commerce.
6 2023 Statistics published on the website of the Arbitration Institute of the Finland Chamber of Commerce.
7 2023 Statistics published on the website of the Arbitration Institute of the Finland Chamber of Commerce.
8 2024 FAI Arbitration Rules, Article 6.3.
9 Article 1 of Appendix II to 2024 FAI Arbitration Rules.10 Article 1 of Appendix II to 2024 FAI Arbitration Rules.
11 Article 9 of the 2024 FAI Arbitration Rules.
12 "Revised FAI Arbitration Rules and Rules for Expedited Arbitration Enter into Force on 1 January 2024", website of the Arbitration Institute of the Finland Chamber of Commerce.
13 "Revised FAI Arbitration Rules and Rules for Expedited Arbitration Enter into Force on 1 January 2024", website of the Arbitration Institute of the Finland Chamber of Commerce.
14 "Revised FAI Arbitration Rules and Rules for Expedited Arbitration Enter into Force on 1 January 2024", website of the Arbitration Institute of the Finland Chamber of Commerce.
15 Article 18 of the 2024 FAI Arbitration Rules.
16 "Revised FAI Arbitration Rules and Rules for Expedited Arbitration Enter into Force on 1 January 2024", website of the Arbitration Institute of the Finland Chamber of Commerce.
17 "Revised FAI Arbitration Rules and Rules for Expedited Arbitration Enter into Force on 1 January 2024", website of the Arbitration Institute of the Finland Chamber of Commerce.
18 Arbitration in the Finnish language represented 59.1% of arbitrations and Finnish law was applied in 94.1% of arbitrations administered by the Institute in 2023. See 2023 Statistics published on the website of the Arbitration Institute of the Finland Chamber of Commerce.
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