1 Introduction
A wave of reform continues to sweep through major international
arbitration institutions. As noted in our legal alert of 15
September 2011, the most popular institutional arbitration rules,
namely the Arbitration Rules of the ICC (International Chamber
Commerce),
were recently renewed and came to force at the beginning of this
year.
Prior to that and already in 2010, we saw the revising of the most
popular ad hoc arbitration rules (the UNCITRAL Rules), together
with the rules of the SCC (Stockholm Chamber of Commerce), a
popular choice among Scandinavian companies especially in
commercial disputes linked to Scandinavia. This was followed by the
new arbitration rules of the Singapore Arbitration Centre (SIAC),
playing a significant role in international arbitrations in Asia.
On top of all that, the IBA (International Bar Association) Rules
on the Taking of Evidence in International Arbitration, setting the
guidelines for the production of evidence,
were likewise recently updated.
It would then be fair to say that the playing field of
international arbitration was and continues to be in turmoil. The
wave of reform is mostly driven by the discussion that focuses on
controlling costs and time in international arbitrations that grow
increasingly more complex with multiple claims and parties. Another
clearly observable trend is the recent invention of
"emergency" arbitrators that allow a party to obtain
immediate interim relief before the constitution of the actual
arbitral tribunal.
Next in line in this development are the CIETAC (China
International Economic and Trade Arbitration Commission)
Arbitration Rules and the Swiss Rules of International Arbitration
by the Swiss Chambers' Arbitration Institution. CIETAC's
new rules took effect in 1 May 2012, while the Swiss Rules came to
force in 1 June 2012, respectively.
The achieving of time and cost benefits and interim relief have
also clearly been the focal points of the revising of especially
the Swiss Rules. Switzerland is seen by many as the home of
international law and cradle of arbitration. The Swiss
Chambers' Arbitration Institution has traditionally prided
itself as offering cost-effective and forward-thinking set of
arbitration rules and is now looking to retain that image through
revamping its rules.
CIETAC on the other hand has been recognized as the leading
arbitration institution for foreign-linked arbitrations in China,
and also Finnish companies have occasionally ended up arbitrating
their disputes under the auspices of CIETAC. Its previous rules
however had a strong Chinese flavor and in anticipatory of a surge
in international case-load, CIETAC is attempting to bring its
arbitration rules in line with the modern practices of
international arbitration. Notable changes include granting CIETAC
discretion in designating other languages besides Chinese as the
language of arbitration in the absence of an explicit choice by the
parties (Article 71).
Similarly, CIETAC can also choose another country besides China as
the seat of arbitration (Article 7.2).
2 Controlling Costs and Time
Like said, efficacy in general especially in the current economy
has been a hot topic for discussion. The Swiss Rules have with the
efficacy in mind tweaked the procedure in several aspects, for
example by broadening the powers of the newly renamed
administrative body, the Arbitration Court, with respect to the
time limits it has fixed (Article 2.3) and by requiring the parties
to front-load their case by submitting relevant pieces of evidence
with their written pleadings (Articles 18.2 and 19.3).
Secondly, the Swiss Chambers' Arbitration Institution added a
general requirement of good faith (Article 15.7). In its essence,
the requirement of good faith is intended to discourage the parties
from obstructing the arbitral proceedings and use their best
efforts to ensure a speedy resolution of the dispute. There however
is no clear sanction for acting against the said requirement and
only time will tell what significance arbitrators in practice place
on it. If nothing else, the good faith requirement may offer basis
on which an arbitrator might indirectly build rulings on costs
against the obstructing party.
With regard to time and costs, CIETAC has adjusted its summary
procedure came to be known as one of the hallmarks of CIETAC
administered arbitrations (Chapter VI).
According to the new rules, disputes having a value of less than
CNY 2,000,000 (approx. EUR 250,000) are subject to a mandatory
summary procedure (Article 54.1).
The threshold has been raised to better correspond to the amount at
stake in international disputes. CIETAC is now also offering
enhanced possibilities for alternative dispute resolution attempts,
including CIETAC mediation, to be taken during arbitration (Article
45). The results are encouraging with nearly 30 % of arbitration
cases being resolved through mediation.
3 Arbitrating Multi-party and Multi-contract Disputes
Another critical element in fighting rising costs and the
prolonging of the proceed-ings is the possibility to consolidate
connected cases between multiple parties or that concern multiple
contracts all into the same proceedings. Trade is no longer
bi-lateral, but instead many projects involve numerous contracts
and interested parties. Besides wasted time and money, parallel and
separate arbitrations run the risk of conflicting
awards.
In this respect, the Swiss Rules have gone the furthest. The
administrative body,
the Arbitration Court, after having considered all the
circumstances and consulted the parties and the arbitrators, can
decide to consolidate two cases. No consent of the parties is
required. In connection, the Arbitration Court may even go as far
as to revoke the appointment of the arbitrators currently presiding
and ultimately constitute a new tribunal to make consolidation
possible (Article 4.1).
Moreover, the Swiss Rules also leave it to the sole discretion of
the arbitrators to allow third parties at request to join the
arbitral proceedings even if no claim is pending against them
(Article 4.2).
CIETAC has adopted a more reserved attitude toward multi-party and
multi-contract disputes. A welcomed addition is the renewal of the
provisions concerning the appointment of arbitrators in multi-party
disputes. If either the group of claimants or respondents fail to
nominate an arbitrator, CIETAC can step in and resolve the deadlock
by appointing the arbitrators (Article 27.3). Consolidation is
possible, but it requires the consent of both Parties (Article
17.1). Joinder of third parties into the proceedings under the old
or new CIETAC rules is not possible.
4 Obtaining Interim Relief
The Swiss Rules have been included with a provision on the
appointment of a sole emergency arbitrator that is becoming the
hall-mark of all modern arbitration rules.
Under Article 43, an emergency arbitrator can be appointed by the
Arbitration Court and then urgently issue the requested interim
relief. In other respects, the Swiss Rules, while acknowledging
that in some countries such as Finland the courts of law may have
the sole competence to issue enforceable interim relief (Article
26.5), grant very broad powers to the arbitrators.
These include ex parte relief, amending, suspending and terminating
granted interim orders and also awarding damages that flow from
granted interim orders that are later deemed unjustified (Article
26).
Under the old CIETAC rules, interim relief available was limited to
only to those few conservatory measures available in China. Instead
of granting them, arbitral tribunals were required to forward the
request by a party to a competent court of law.
Under the new rules, any measures that are available under the
applicable law can now also be granted by the tribunal (Article
21.2). As the "applicable law" as a standard refers to
the law of the seat of arbitration, this is another amend-ment
aimed almost solely to benefit parties arbitrating outside of China
under the CIETAC rules.
5 Concluding remarks
If the revised ICC Rules of Arbitration are taken as the
baseline, the Swiss Rules can be categorized as the most
progressive, entrusting arbitrators and the Arbi-tration Court with
the power to undertake certain measures even when the parties
disagree.
While the ICC Rules of Arbitration stand in the middle-ground
laying down basic ground rules and limitations to joinder and
consolidation, CIETAC Arbitration Rules try to adopt many
forward-thinking features while still keeping the parties at the
wheel.
It needs to however be kept in mind that the practice to be adopted
by the arbitrators will ultimately dictate how broadly the
arbitrators intend to utilize the new powers accorded to them, or
whether they are to go with a more conservative approach.
In the months that will follow, the attention will next be directed
towards LCIA (London Court of International Arbitration) and HKIAC
(Hong Kong International Arbitration Centre), who are also in the
process of considering modifying their international arbitration
rules. From a Baltic point of view, LCIA is known as the preferred
choice for many Russian-linked oil and gas disputes, while HKIAC
ranks among the top arbitration institutions in Asia. Lastly but
not least, the FCCC (Arbi-tration Institute of the Finland Chamber
of Commerce) will be launching its new rules in the near
future.
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.