UK: Expedited Procedures In International Arbitration And English Litigation

Two of the biggest challenges for parties involved in dispute resolution – whether arbitration or litigation – are the length of time involved and the cost of the process. This newsletter considers two recent developments in arbitration and English litigation in which the decision-making bodies themselves have taken steps to address these concerns.

The arbitration experience – New Expedited Procedure Rules in the ICC Rules

On 4 November 2016, the International Court of Arbitration (ICC) announced the introduction of the Expedited Procedure Rules (EPRs). The new rules take effect on 1 March 2017. Whilst the EPRs will apply automatically where the amount in dispute does not exceed US$2 million, the parties can also agree that they will apply to a dispute of any value. The EPRs will not apply to arbitration agreements concluded before 1 March 2017.

The focus of the EPRs is on speed and efficiency. The EPRs set a very clear timetable - the whole procedure is envisaged to last approximately 6 months. The EPRs also limit the documentation required in that:

  • no terms of reference need to be established;
  • the parties' written submissions will be limited;
  • no requests for documents will be allowed unless decided by the arbitrator; and
  • the dispute may be decided on the papers, with no hearing and no examination of witnesses.

The arbitrator's fees are also cheaper than under a standard ICC arbitration.

By introducing an expedited procedure, the ICC has brought itself into line with other institutions, notably the Singapore International Arbitration Centre (SIAC) and the Japan Commercial Arbitration Association, which have had expedited procedure in place for some years. The SIAC statistics show that the procedure there has been well-used: between 1 July 2010 and 1 June 2016, 263 applications for the expedited procedure were made, and of those 161 (61%) were accepted.

The English litigation experience – The Shorter Trial Scheme

The second development in this area occurred recently in the English courts. Around a year ago, the English courts introduced a pilot scheme called the Shorter Trials Scheme (the Scheme) which created a form of expedited procedure for qualifying disputes. The intention behind the Scheme was to "achieve shorter and earlier trials for business related litigation, at a reasonable and proportionate cost."1 The Scheme applies to disputes if the parties agree to it or if the Court orders it upon the application of one party. It can also be suggested by the Court using its own initiative.

Again, there is a clear timetable under the Scheme - the intention is for any case to come to trial within 10 months from the date of issue and for judgment to be handed down six weeks after that, meaning the case would be disposed of in less than a year. The Scheme also limits the documentation required by way of the following:

  • the particulars of claim and defence are each limited to 20 pages in length;
  • disclosure is a more limited procedure than usual;
  • applications will be normally be dealt with without a hearing; and
  • the trial will not take longer than 4 days.

Whilst the Scheme has been in place since 1 October 2015, the recent case of National Bank of Abu Dhabi PJSC v BP Oil International Ltd [2016] EWHC 2892 was the first to have been decided under it. Judgment was handed down in November 2016.

In many respects, the case was perfectly suited for determination under the Scheme. The (ultimately successful) Claimant brought a claim for breach of warranty and representation. Whilst the value of the claim was US$69 million, the case turned on the interpretation of two contractual documents. No expert or factual evidence was required, and there was only very limited disclosure. The trial took place nine months after proceedings were issued and judgment was handed down within two weeks of the trial. A total duration of 9˝ months compares favourably to the timetable in the ICC EPRs.

Comparison

It is interesting to compare a number of aspects of the two different approaches:

  1. The English court rules are more prescriptive than the ICC Rules about what cases are appropriate for the Scheme: cases involving fraud or dishonesty, or those which require extensive factual or expert evidence or disclosure, and cases involving multiple issues and multiple parties are unlikely to be suitable. In contrast, whilst the ICC Court retains the ability to decide that expedition is inappropriate in certain circumstances, no detail is provided as to what such "circumstances" might be.
  2. The arbitration rules tend to use the value of the dispute as the key reference point. The ICC EPRs, for example, automatically apply to disputes less than US$2 million. In the Scheme, however, the complexity of the dispute is the determining factor. Indeed, the BP Oil International Ltd case discussed above is a very good example of a high value dispute (US$69 million) turning on a discrete issue of contractual interpretation and therefore being suitable for determination under the new Scheme.
  3. Finally, one purpose of the Scheme was to "help to foster a change in litigation culture" which would in turn "lead to significant savings in the time and costs of litigation."2 A similar sentiment may be inferred from the comments of the ICC Court President, Alexis Mourre, when the new EPRs were unveiled: "This is an entirely new offer to our users... These new rules will not only be effective for disputes of a limited value, but also for larger cases if the parties so agree", he said. It is therefore clear that for the right sort of cases, the tools are increasingly being placed at the parties' disposal by decision-making bodies to help them limit the cost and duration of the dispute. For there to be a change in culture, however, those tools must be used. It remains to be seen to what extent parties are willing to buy into the principle which underpins these expedited procedures, which is the recognition that comprehensive disclosure and a full, oral trial on all issues is often not necessary for justice to be achieved.

Footnotes

1. https://www.judiciary.gov.uk/wp-content/uploads/2015/09/Shorter-and-Flexible-Trial-Schemes-Announcement.pdf

2. https://www.judiciary.gov.uk/wp-content/uploads/2015/09/Shorter-and-Flexible-Trial-Schemes-Announcement.pdf

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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