Expedited arbitration, autonomy and due process (part two)

This is the second part of a two-part blog post that considers the key features of expedited arbitration and what balance they achieve between efficiency, autonomy and due process. Part one addressed appointment of arbitrators and the arbitral procedure. Part two looks at hearings in expedited arbitrations.

Hearings add significantly to the duration and cost of an arbitration. Standard international arbitration rules normally entitle any party to request a hearing. The UNCITRAL Rules 2013 are typical in providing that:

“If at an appropriate stage of the proceedings any party so requests, the arbitral tribunal shall hold hearings for the presentation of evidence by witnesses […] or for oral argument” (Article 17.3.)

Article 26.1 of the ICC Rules 2021 similarly requires that “a hearing shall be held if any of the parties so requests”.

Provisions for expedited arbitration modulate the parties’ right to a hearing, potentially limiting a prominent aspect of a party’s due process right to an opportunity to present its case. Article 5.2(c) of the SIAC Rules 2016, for instance, provides that “the tribunal may, in consultation with the parties, decide if the dispute is to be decided on the basis of documentary evidence only, or if a hearing is required for the examination of any witness and expert witness as well as for any oral argument”.

Article 5 of Appendix VI to the ICC Rules 2021, which applies to expedited cases, takes a similar approach in providing that the tribunal may, after consulting the parties, “decide the dispute solely on the basis of documents submitted by the parties, with no hearing”.

Article 33.1 of the Stockholm Chamber of Commerce (SCC) Expedited Rules provides a framework to dispense with a hearing: “a hearing shall be held only at the request of a party and if the arbitrator considers the reasons for the request to be compelling”.

The UNCITRAL Expedited Arbitration Rules take a different approach, providing in article 11:

“The arbitral tribunal may, after inviting the parties to express their views and in the absence of a request to hold hearings, decide that hearings shall not be held.”

Article 11 falls to be read in light of the arbitral tribunal’s control over the content of the hearing under article 15(3):

“The arbitral tribunal may decide which witnesses, including expert witnesses, shall testify to the arbitral tribunal if hearings are held.”

Article 14.6(v) of the LCIA Rules 2020 includes a power of the tribunal to “dispense with a hearing, subject always to article 19”.  Article 19.1 provides that “any party has the right to a hearing before the arbitral tribunal”. An LCIA arbitral tribunal therefore could only dispense with a hearing if the parties agree, although as with other arbitration rules, a tribunal has the power to refuse or limit the testimony of witnesses (article 20.4) and thus control the content of the hearing.

Provisions relating to dispensing with a hearing fall to be viewed in light of due process requirements, the breach of which may lead to an award being set aside by the courts of the seat (for example under UNCITRAL Model Law, if a party was “unable to present his case” (article 34(2)(a)(ii)), or recognition and enforcement being refused on the same basis by an enforcing court under article V(1)(b) of the New York Convention).

The Singapore Court of Appeal in CBS v CBP recently found that an arbitral tribunal’s refusal to hold a hearing on the request of a party was a breach of natural justice. The court attached weight to the fact that the applicable arbitration rules required the tribunal to hold a hearing at a party’s request and also emphasised that case management powers did not override rules of natural justice (paragraphs 53 to 57 and 61). While arbitral tribunals have on occasion declined to hear witness evidence in the absence of a party agreement, this situation is likely to be a rarity (for an example, see Dalmia Dairy Industries Ltd v National Bank of Pakistan, involving an ICC arbitration which notably turned exclusively on legal issues). It remains to be seen how arbitrators will approach provisions that give them discretion to dispense with a hearing in expedited proceedings, and also how reviewing and enforcing courts will view them. As a practical matter, arbitrators may be inclined to play safe, and with the recent growth of virtual hearings, there is greater scope to comply with a request for a hearing while maintaining an expedited schedule.

Balancing due process with efficiency has long been enshrined in international arbitration. The English Arbitration Act 1996 incorporates parallel general duties of the arbitral tribunal to “act fairly and impartially as between the parties giving each party a reasonable opportunity of putting his case” while “avoiding unnecessary delay or expense” (section 33(1)(a)-(b)). Similarly, articles 22.1 and 22.4 of the ICC Rules 2021 respectively provide that the arbitral tribunal shall “make every effort to conduct the arbitration in an expeditious and cost-effective manner having regard to the complexity and value of the dispute” and “shall act fairly and impartially and ensure that each party has a reasonable opportunity to present its case”. As seen, expedited arbitration rules aim to shift how an arbitral tribunal balances those interests to meet the exigencies of economy and urgency in particular cases. Allowing similar considerations of efficiency to trump such deep-rooted aspects of arbitration as a party’s right to select arbitrators or a right to a hearing is a more marked shift and is likely to attract greater scrutiny.

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