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Dealing with late submissions in arbitration: what lessons from the English courts?

Summary

Arbitration practitioners tend to think that tolerance of late and untimely submissions is a slightly embarrassing quirk of arbitral procedure. There is an assumption that their colleagues who also practice before domestic courts do not flout procedural timetables so readily (for example, by making last minute submissions after the close of a hearing). The truth is quite different; where they see an opportunity to do so, lawyers before the English courts are just as willing to flout timetables as their colleagues before arbitral tribunals. Although the English courts’ approach does not deal with all the problems thrown up by late submissions, arbitration could incorporate certain features of court litigation, including the principles and jurisprudence that have developed around late submissions and amendments. Parties to an arbitration would be well advised to build a framework for considering late submissions into Procedural Order Number 1 in order to create a robust and predictable means by which to deal with them.

Late submissions in arbitration

There is often a lacuna in arbitral procedure and practice which can leave both counsel and arbitrator at a loss: what to do about legal and factual submissions made outside of an agreed procedural timetable (which we refer to here as “late submissions”).

Arbitration practitioners often think that late submissions are more of a feature of arbitration than of court litigation. There is, of course, no way of knowing whether this is true, since the vast majority of arbitrations are private and late submissions in court litigation are not always easy to detect by reading the judgment. To our knowledge, there has not been any systematic attempt to compare the relative prevalence of the phenomenon in each.

Nevertheless, the view that there is likely to be a greater instance of late submissions in arbitrations than in court litigation persists partly because arbitrations in England and Wales (much like in the rest of the world) are high stakes affairs. Their outcome is challengeable only on the narrowest grounds under the English Arbitration Act 1996 (see sections 67-69). The view also persists because arbitration is a flexible procedure; that is, after all, one of its strengths. Having come up with and agreed the timetable for the arbitration themselves (recorded in what is commonly termed the tribunal’s “Procedural Order Number 1”), counsel tend to view the deadlines it prescribes with a greater sense of proprietorship than their colleagues before the courts.

With that in mind, it is perhaps predictable that counsel are often more willing to flout procedural rules of their own making than those imposed by the Civil Procedure Rules (CPR).

Indeed, unscientific observation confirms that late submissions arise frequently in arbitration. We recently acted as counsel to claimants in a commercial arbitration between two sophisticated and experienced parties. The respondents, having been informed that the award would be handed down in a couple of weeks and sensing that it was likely to be favourable to the claimants, quickly lodged a lengthy new written submission, which both made new points and attempted to reopen old ones. We objected that these submissions should be given no attention save that the fact of their having been made at all ought to be reflected in the tribunal’s decision on costs. But the tribunal was faced with a complicated decision. As is frequently the case, it was required to undertake a balancing exercise between the respective due process rights of the parties. That task is made easier when the arbitration proceeds according to the timetable and process agreed by the parties at the outset.

However, when the parties depart from this process, the tribunal effectively enters uncharted territory.

At present, arbitral rules and guidance leave counsel and arbitrators almost entirely unaided in evaluating late submissions and each tribunal has to arrive at its own (potentially conflicting) conclusion as to the test and mechanism appropriate for determining admissibility.

Late submissions in the English courts

In the absence of guidance from arbitral jurisprudence, what might practitioners learn about dealing with late submissions from the English courts? There are three points from which the arbitration community might learn.

The first (which might surprise arbitration practitioners) is that the English courts, including the Supreme Court, often suffer from precisely the same problems that arbitral tribunals do; lawyers flout procedural rules everywhere.

For example, in the 2012 case of Assange v Swedish Prosecution Authority, the Supreme Court faced an unexpected last-minute submission from lead counsel for Mr Assange, in the minutes before judgment was due to be given. The situation arose as a result of the Supreme Court’s recent practice of circulating a draft judgment to the parties (giving them an opportunity to correct minor, typographical errors) before finally handing it down. Assange’s team had therefore had the opportunity to examine the judgment. On 30 May 2012, the day on which the Supreme Court was due to hand it down, Assange’s counsel made unexpected submissions to the effect that she had not been given the opportunity to address the court on one of the key issues which formed the basis of its judgment, and requested the opportunity to do so. After some confusion on the bench, she was granted it.

The second point is that the English CPR, in common with most arbitral rules, do not provide substantive assistance when dealing with late submissions. In many cases involving late submissions before the Supreme Court, the bench has simply used its discretion to determine the appropriate means by which submissions should be considered. The court, in such circumstances, does not frequently refer to any particular rules of procedure when doing so; none exist to guide it.

The third point is that, in the absence of binding procedural rules, English jurisprudence has produced useful authority on the question of how a court should consider late submissions. For example, in the context of late amendments, the High Court in Versloot v HDI Gerling Industrie confirmed that a “heavy onus” lies on a party seeking to make a very late amendment to justify it, and that a “fair balance” must be struck between the prejudice that will be caused by refusing the amendment and the prejudice caused if the amendment is allowed. In that case, the defendants had attempted to file a late “re-re-amended” defence following the presentation of evidence at trial. In rejecting the application to amend, Popplewell J held that the resisting party had “a legitimate expectation that all defences would be advanced at the trial” and that the applicant “would not be granted a second bite of the cherry”. The court also relied on the fact that the new issues raised would have necessitated a further “3-4 day hearing”.

Other cases emphasise the need, when considering late submissions, to be mindful of the “anxieties and legitimate expectations of the other party and the efficient conduct of litigation” even where that party may be financially compensated in any award on costs (Charlesworth v Relay Road).

How parties to an arbitration learn from the English courts?

In the absence of a robust and binding framework within which to assess late submissions, they will always present an unpredictable and inconvenient challenge to the integrity of proceedings. Parties to an arbitration are not, however, in the same boat as parties to a litigation; the former are free to agree whatever procedural rules they think fit. Parties would be well advised to take advantage of this ability and should include a provision which sets out, in clear terms, the framework by which late submissions should be assessed if they are made.

How such a framework should look will of course be down to the parties’ preference. Most are likely to look for a framework which is reasonably restrictive, subjecting late submissions to a rigorous admissibility test. One example of a system that might be adapted to the needs of arbitration lies in the procedure by which parties may apply to reopen appeals which have been the subject of a final determination under Part 52 of the English CPR. That part provides that, in order to do so, parties must first get permission from the courts to make an application to reopen (52.17(4)) and, having done so, then show that:

(a) it is necessary to reopen the appeal in order to avoid real injustice (52.17(1)(a));
(b) the circumstances are exceptional and make it appropriate to reopen the appeal (52.17(1)(b)); and
(c) there is no alternative effective remedy (52.17(1)(c)).

The great utility, from an arbitration perspective, of the wording of Part 52 is that it provides a potential framework for the admission of late submissions outside of an agreed procedural timetable. It also recognises that, in some narrow and exceptional circumstances, the interests of justice would be better served by allowing such submissions to be tested and heard rather than rigidly enforcing the procedural timetable. This is, of course, only one example of how parties might approach the issue if they wished to establish a restrictive test on late submissions. The precise terms of any express provisions on late submissions will naturally depend on the parties’ agreement, but the utility of including such provisions should not be underestimated.

Doughty Street Chambers Three Crowns LLP Mark Wassouf Maanas Jain

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