Chapter § 8.05 Managing the Arbitral Process

• Jurisdiction: United States
• Publication year: 2020

§ 8.05 Managing the Arbitral Process

As is expected from a dispute resolution process that aims to craft a procedure specific to each dispute, the potential forms an arbitration may take are myriad. The process varies not only based on the dispute, but is also informed by the legal backgrounds of the parties, counsel and arbitrators; the applicable rules; and the law of the seat.

Similar to the arbitration agreement, the arbitral process may be considered to have minimal requirements to produce an enforceable award under the New York Convention. The arbitration must (i) provide each party with the opportunity to present its case, (ii) fall within the tribunal’s jurisdiction, (iii) comply with the parties’ arbitration agreement, and (iv) comply with the law of the seat’s public policy requirements.⁵³ Arbitral rules then give the tribunal wide berth to conduct the proceedings as they deem fitting,⁵⁴ requiring that tribunals provide a process that is “expeditious and cost-effective[,]”⁵⁵ “impartial” and “efficient” while “giving each party an equal and reasonable opportunity to present its case.”⁵⁶

An overview of the significant phases in an arbitration are described below: submission of the pleadings, applications for emergency measures and constitution of the tribunal; written submissions and disclosure; the hearing; and the award. This overview focuses on aspects that impact the efficiency and cost of an arbitration, though these aspects must be balanced with a party’s need to satisfy its burden of proof.

[1] Pleadings, Emergency Measures, and Constitution of the Tribunal

[a] Initiation of the Arbitration

The process of initiating an arbitration is dictated by the arbitration agreement. If the arbitration is administered, the parties’ designated arbitration rules detail the steps to initiate an arbitration; if the arbitration is ad hoc, either the arbitration agreement itself or the designated rules will do so.

In comparison to litigation’s formal procedures to file and serve a complaint, the initiation of an arbitration is streamlined: arbitration rules typically require submitting a “request for arbitration” (or, for ICDR, SIAC, and HKIAC arbitrations, a “notice of arbitration”⁵⁷) to the administering institution in hard copy, by email or, with increasing frequency, via the institution’s online portal. The request is accompanied with or followed by the institution’s initial fee, and either the claimant or the administering institution is required to send the request for arbitration to the respondent.⁵⁸ While less formal, care must still be taken to fulfill the requirements to commence an arbitration, particularly if a time bar for the claims is near or, as described below, the request must name the claimant’s party-appointed arbitrator.

[i] The Claimant’s Request for Arbitration

Care must also be taken to satisfy all of the rule’s requirements for the request for arbitration. Broadly, requests must, inter alia, list the parties’ and counsels’ contact information; provide the arbitration agreement and specify the number of arbitrators, arbitral seat, governing law, and other procedural requirements; and describe the claims and relief sought. There are minimal requirements for the description of claims and relief: the SCC and HKIAC require only “a summary of the dispute” and “a description of the general nature of the claim and an indication of the amount involved, if any[,]” respectively.⁵⁹ The ICC provides slightly more guidance, requiring “a description of the nature and circumstances of the dispute giving rise to the claims and of the basis upon which the claims are made.”⁶⁰

While the requirements are minimal, the claimant is free to provide as much detail and supporting documentation as it wants. The decision of how much detail to include should take into account the party’s strategy in pursuing arbitration—whether to, for example, spur settlement negotiations or pursue its claims fully—and it should take into account a cost/benefit analysis of a detailed description of its claims as opposed to a summary. Even though detailed requests are costlier to prepare initially, the detail may enable the parties and tribunal to focus the arbitration on key issues earlier in the proceeding; enable a more tailored procedure; serve as the basis for submissions on the merits; and further settlement negotiations by enabling the respondent to assess the claims’ strengths. However, detailed requests are not always possible nor preferable: a summary saves fees and time, at least up-front; may be necessary to meet any time bars to claims; and provides flexibility to develop theories and strategies after previewing the respondent’s defenses.

Notably, some rules require a claimant to nominate its party-appointed arbitrator in the request for arbitration and, if any claimant that fails to do so potentially waives the right to appoint an arbitrator.⁶¹ Particular care must be taken to ensure that a party does not unintentionally waive this valuable right.

[ii] The Respondent’s Answer

After receiving the claimant’s request for arbitration, the respondent submits its answer (or, in LCIA and SIAC arbitrations, a “response”) and any counterclaims. It has anywhere from 14 to 30 days to do so after it receives the request, though, similar to litigation, extensions are usually freely given.⁶²

As with the request for arbitration, the answer must contain the requirements mandated in the arbitral rules, including contact information for the parties and counsel, comments on the arbitration agreement, a response to the asserted claims and requested relief, and a description of any counterclaims and relief. Each institution’s rules may have other vital requirements for the answer, including the appointment of the party-appointed arbitrator.⁶³

Just as with the request for arbitration, arbitral rules provide but minimal requirements for the response to the claims and the description of any counterclaims, and the respondent may provide as little or as much detail and supporting documentation as it wants. The level of detail in the claimant’s request for arbitration may guide this decision. In other instances, the detail included may reflect the reality of the deadline to file the answer or the need to continue a deep analysis of the claims and defenses after the filing deadline. Even so, a more detailed answer may permit a respondent to showcase strong or complete defenses, which could potentially spur settlement negotiations and persuade the tribunal that the claims lack merit, or lay the groundwork for an application for summary disposition or preliminary determination.

[iii] Amending the Pleadings

Parties may amend or supplement their claims and defenses. Usually, leave of the tribunal is required. In determining whether leave should be granted, the tribunal may consider factors such as the delay in asserting the new claims and defenses, prejudice to the other side, and other circumstances.⁶⁴ Accordingly, a party should not delay in requesting leave to amend and do so as early in the proceedings as possible.

[b] Emergency Measures

At times, a party requires emergency or interim relief immediately upon commencing the arbitration, before the tribunal is constituted. Historically, a...