On February 3 through 7, 2020 the UNCITRAL Working Group II (Dispute Resolution) hosted its seventy-first session at the United Nations Headquarters in New York. The five-day session was attended by approximately 60 State members of the Commission as well as numerous other representatives of States, and international governmental and non-governmental organizations.
Also in attendance by invitation by UNCITRAL were representatives of leading arbitral institutions and groups with international expertise relevant to the work of the Working Group (such as the ABA, ArbitralWomen, CEPANI, CIArb, CIETAC, CPR, ELSA, FICA, ICC, ICCA, AAA/ICDR, HKIAC, KCAB, MCA, MIAS, NYIAC, RAS, SCC and SIAC) who attended the Session as observers.
The Working Group continued to prepare a text for expedited arbitration rules (the Expedited Provisions) in furtherance of the vision first articulated by the Commission in 2018 to establish an international framework for expedited arbitration. The aim is to establish streamlined and simplified procedures, model clauses and other guidance to resolve disputes within an expedited or abbreviated timeline and with a particular focus on commercial rather than investor-State arbitration. As highlighted throughout this session, as well as earlier sessions in Vienna, the objective of the Working Group is to establish efficient, user-friendly procedures suitable for use by a range of stakeholders in a variety of settings, including most relevantly in ad hoc proceedings where there is no institution administering the proceedings.
The key issues and discussions points during the Working Group deliberations are summarized below:
- Implied consent (opt-out) or express consent (opt-in). One of the key threshold issues – perhaps the threshold issue – is whether parties will have to expressly “opt-in” or consent to the application of Expedited Provisions, or whether the Expedited Provisions, like the expedited rules of some arbitral institutions, will automatically apply to disputes satisfying certain pre-established criteria − including, for example, specified financial thresholds (and provided that the underlying arbitration agreement post-dated the date the Expedited Provisions come into force). Delegates acknowledged that this pivotal decision may have a substantial follow-on impact for the direction of the remainder of the Provisions. For example, if it is clear that parties are knowingly adopting these modifications in the interest of efficiency, it will likely be possible for the drafters to deviate further from the existing rules governing non-expedited arbitration. Two understandings come into play here: first, arbitration is a creature of consent; second, parties to an expedited arbitration are necessarily afforded less due process. Contemplating these two concerns led to significant consensus among delegates that arbitral parties should be required to expressly consent to the adoption of Expedited Provisions, rather than having it presumed that they have consented through the doctrine of implied consent.
- Logistical complications. The deliberations further highlighted the logistical complications arising from the need to determine the applicability of the Expedited Provisions. Not least of these is who determines whether criteria for applicability are being satisfied in the absence of an arbitral institution administering the dispute as well as the interconnectedness of all the matters contemplated by the Provisions. Delegates raised questions about an array of issues emanating from this concern. Amongst other issues, delegates raised issues concerning the constitution of a tribunal— given, for example, that the Expedited Provisions would likely require the appointment of a sole arbitrator, whereas if not applicable, the arbitral agreement might otherwise require a tribunal composed of three arbitrators. This issue alone has potential to create substantial challenges in initiating proceedings in disputes where there is question as to the applicability of the Expedited Provisions. An important takeaway was that any final Expedited Provisions should provide an appropriate level of guidance with respect to this issue.
- Opt-out, take two. Notwithstanding the consensus above, in further discussion, delegates explored whether the Expedited Provisions should permit a party to unilaterally opt-out of the Expedited Provisions, despite any prior agreement to have those Provisions apply. While certain delegates expressed a view that the ability to opt-out would permit a sensible modification in the event of “unforeseeable” or “exceptional” circumstances, others expressed concerns that permitting one party to avoid an arbitration agreement would frustrate central goals of arbitration, such as finality and certainty. The Secretariat was thus asked to further consider when a party could make such an application, on what basis a party could do so, and to which body a party would submit such application, including what would transpire in the event that a tribunal had not yet been constituted and no institution had been designated in the parties’ agreement to resolve such disputes.
- Pleadings: Another area of focus was on the pleadings to be submitted by the parties and the timing for doing so. In particular, delegates discussed whether the Notice of Arbitration should serve as a Statement of Claim and whether a claimant would be required to include all evidence on which it intended to rely with that pleading. Delegates again asked whether, and when, there would or could be a decision regarding the applicability of Expedited Provisions, including the possibility that a respondent might be required to respond only to the issue of applicability (and the appropriate constitution of tribunal), but could be allowed further time to file its responsive pleading.
- Default arbitrator appointment. Delegates also discussed the issue of default arbitral appointments − more specifically, whether UNCITRAL Rules should begin to look to other institutions beyond the PCA to fulfill that role when parties’ agreements have failed to specify an institution for appointment. Various observers suggested it may be time to widen the pool to other institutions who might be better able to offer parties the benefit of localized experience.
- Making the award − how fast is too fast? Many delegates agreed there is a need for tribunals to issue awards rapidly and within a fixed time frame following their constitutions. At the same time, however, delegates acknowledged some of the unique challenges that exist in ad hoc Among the ad hoc arbitration challenges mentioned: whether it would be possible for arbitrators to abide by clear timelines, or whether there is a need to build in flexibility, allowing limited numbers of extensions, for limited types of reasons. Again, the Working Group had differing views on how prescriptive the Expedited Provisions should be in terms of setting forth the specific reasons or rationales which might justify an extension.
It was an honor to represent ArbitralWomen at the February 2020 UNCITRAL Working Group II Session.
Submitted by Kiera Gans, ArbitralWomen Member and Of Counsel at DLA Piper.