REUTERS | Mohamed Nureldin Abdallah

Arbitration statistics: and the winner is…

It’s statistics season again. Over the last few months, the arbitral institutions have been adding up and releasing their annual stats for 2016, generally accompanied by a flourish in the form of a glowing press release. What can we learn from these? Are there any trends or developments worth noting?

Well, there are no huge surprises, unexpected swings or unforeseen trends. The big winners in terms of market growth appear to be the International Chamber of Commerce (ICC) and the Singapore International Arbitration Centre (SIAC). The ICC reported a record year for new arbitrations: 966 new cases (up from 801 in 2015 – a significant jump) with 3,099 parties (2,283 in 2015). It also reported a record number of pending cases in 2017, suggesting that this upward trend is likely to continue. Similarly, SIAC’s success story continues, with the institution reporting 343 references (up from 271 in 2015).

Most other institutions reported slightly increased or stable figures. The London Court of International Arbitration (LCIA) reported a “robust” caseload: 303 references, slightly down on 2015 but nevertheless consistent with a general upward trend over the last five years. The Stockholm Chamber of Commerce (SCC) reported a modest uptick on 2015’s figures. The International Centre for Settlement of Investment Disputes (ICSID) was slightly down on 2015 with 52 as opposed to 48 references. The Hong Kong International Arbitration Centre (HKIAC) reported 262 new arbitrations (slightly down on the 271 reported in 2015).

Of course, all these stats are confined to institutional arbitrations and are likely to be dwarfed by the numbers of ad hoc arbitrations. For example, in 2016 the London Maritime Arbitration Association (LMAA) reported 1,720 references in 2016 (slightly down on 2015 and 2014 but nevertheless a significant number of cases and higher than any major institution). As has been discussed elsewhere, ad hoc arbitration generally, and maritime/LMAA arbitration in particular, is routinely ignored in general discussion of international arbitration in London, despite the thriving maritime arbitration industry. Perhaps this will gradually change with the LCIA identifying shipping and commodities as a trending industry sector in 2016.

Stepping back, the general picture is one of the continued popularity of arbitration as a dispute resolution mechanism. Institutional statistics covering the last 10 years indicate a general upward trend, with some annual variations, and some institutions establishing themselves over time as market leaders. Focusing on London in particular, there is no sign, as yet, that Brexit has deterred parties from arbitrating in London, though, of course, one would expect that any Brexit effect – either positive or negative – might take a while to filter through. There has been some anecdotal suggestion that commercial parties are thinking twice about providing for English law in their contracts, but as yet there is no evidence that parties are turning away from London arbitration (indeed, the opposite may be the case). This was noted by the Lord Chief Justice, Lord Thomas, in his recent speech in Beijing. Interestingly, he also indicated that around a quarter of the English Commercial Court’s business consisted of arbitration claims: a powerful illustration of how well embedded arbitration has become in dispute resolution under English law.

What else do the stats reveal? Some institutions report the number of awards made during each year. Although the year of award will in most cases not correspond with the year of commencement of arbitration, it is nevertheless possible to take a broad brush view of the number of arbitrations that are settled or abandoned. For example, the LMAA stats show that 535 awards were made in 2016. As against over 1,700 references commenced, this suggests that a substantial number of arbitrations are settling before an award is made. The amounts in dispute tend to vary enormously. The SCC stats indicate that around a third of claims were between EUR 100,000 and 500,000, and around three quarters were less than EUR 5 million. By contrast, the LCIA reported generally larger sums in issue: just under one third of claims were between US $1-5 million, and almost a fifth were claims for US $50 million or more.

The institutional stats also suggest that relatively little use is being made, in practice, of the emergency arbitrator provisions. Only one (unsuccessful) application was made to the LCIA in 2016. Perhaps this is unsurprising against the background of the flexible and robust interim supportive remedies, such as freezing injunctions, available from the English courts. Similarly, two (successful) applications were made to HKIAC. By contrast, there were 13 emergency arbitration proceedings in SCC arbitration (where emergency arbitrators are long-established) in 2016.

The stats shed some light (though probably not enough) on gender diversity in appointments. Women constituted 16% of SCC appointments and 20% of LCIA appointments. In each case, the appointment of a woman was more likely to have been made by the institution than the parties: in LCIA arbitrations, only 4% of party appointments were women. It will be interesting to see whether the Equal Representation in Arbitration Pledge, launched in 2016, will have any material effect on these figures. One imagines that the increased transparency in terms of reporting stats (with corresponding pressure on other institutions to do the same) is likely to improve diversity in appointments.

Overall, the stats reveal arbitration as a healthy and well–established, though always evolving, dispute resolution mechanism. However, as Vince Lombardi, the legendary NFL coach once opined – while statistics are interesting, they are all in the past. While arbitration will no doubt continue to be the dispute resolution mechanism of choice for many commercial parties, it will be interesting to see the picture painted by future statisticians.

20 Essex Street Karen Maxwell

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