Fortior's Arbitration Guide - Lecture 3 - Common Procedure in Arbitration
This lecture explains the standard procedural steps in international arbitration.
In my prior lecture, I have discussed how Arbitral Tribunals are appointed. One the Tribunal is appointed, the parties will have to agree, or the Tribunal will have to establish the onward procedure of arbitration. The purpose of this lecture is to equip you with the basic necessary knowledge to participate in the meaningful discussion about the procedure with the Tribunal or your opponent. Our Arbitration Guide has a template order for directions, which you can use as a basis for your discussion.
The basic steps listed in the order are:
Exchange of written submissions
Preparation of hearing bundles
Organizing hearing logistics
In this lecture, I will say a few words about each of these procedural steps, but they are covered in greater details in my other lectures.
The first step after the appointment of the Tribunal is usually the exchange of the written submissions. I discuss the various submissions and their content in my next lecture. This lecture only deals with the procedure for filing them. If you are working under the institutional rules, the rules will normally specify which written submissions are to be filed and when. Article 15 of LCIA Rules provides that the Claimants must file the statement of case within 28 days of the formation of the Tribunal. In the statement of case the Claimant sets out the relevant facts, the relief it seeks and the legal arguments upon which it relies. Within 28 days of receipt of the statement of case, the respondent must file of the statement of defence. In the defence, the respondent basically addresses the assertions advanced in the statement of case, sets out its own view of the facts, legal arguments and basically explains why the claimant’s claim should not succeed. Within 28 days of receiving the statement of defence, the claimant may file the statement of reply. In the reply, the Claimant addresses the new arguments raised in the defense. The Claimant is not obliged to file a reply and need not do so if he believes that the statement of case covers all relevant issues. Depending on the complexity of the arbitration, the Tribunal may either extend or shorten the time limit specified in Article 15 of LCIA Rules, pursuing Article 22 of LCIA Rules.
Written Submissions In Ad Hoc Arbitration
In Ad Hoc Arbitration, that is arbitrations that are not managed by any institution, such as LCIA. It is for the parties to agree or for the Tribunals to decide on the procedure for the exchange of written submissions. Tribunals will normally adopt the procedure, which is similar to those specified in LCIA Rules. Adjusting the time limit might be necessary, depending on the complexity of arbitration.
Disclosure is a process whereby each party to the arbitration proceedings is called upon to disclose documents relevant to its case and the case of its opponent. Parties are obliged to disclose all relevant documents and not just the documents that support their cases. I discuss the various disclosure mechanisms such as Redfern Schedule, Standard Disclosure and Specific Disclosure in my 6th lecture. Where parties choose Redfern schedule as their disclosure mechanism, request for disclosure are normally due within 2 to 4 weeks of the final written submission. Objections are than normally due within 2 weeks of the request and the reply are due within 2 weeks of the objection. Once the Tribunal rules upon the parties’ request for disclosure, parties are usually given a period of time between 2 and 4 weeks to conduct the relevant searches and to disclose documents to their opponents.
Once the parties disclosed the relevant documents to each other, they will normally need to exchange witness statements. I discuss the witness statement in my 6th lecture. Witness statements are documents, where the parties’ witnesses set out their recollection of relevant facts and events. There may be an arbitration without witnesses, particularly where the amount of stake is low, or the factual position is clear from the documents submitted by the parties. Where there is witness evidence, each party will normally have to produce witness statements from its employees, consultants, business partners or other people familiar with the facts. An order for directions will normally set the deadline by which party has to identify the witnesses on who’s evidences it seeks to rely. It will also set a deadline by which the parties have to exchange the witness statements from those witnesses.
It is common for the parties to agree that each witness statement be accompanying by the documents upon which the witnesses rely. If those documents are not in the language of the arbitration, then they will be translated to that language. Once the main statements are exchanged, the parties will normally have an opportunity to file the reply witness statement. Reply witness statements should be limited to commenting upon main the witness statement and they are normally due within 2 to 3 weeks of the main statements.
I discuss expert evidence in my 6th lecture. In essence, where the Tribunal requires the assistance of someone with specific knowledge, education or experience to make sense of the facts, it will make an order for expert evidence. The Tribunal may appoint a witness itself, then the parties will have to come with joint instructions to the experts or the Tribunal will prepare instructions itself, having consulted the parties. Alternatively, the Tribunal may order that each party instruct and produce evidence from its own experts. Then the Tribunal will set the procedure for the exchange of expert reports, which will normally be similar to the exchange of witness statements.
Once the parties exchanged all the documents in the arbitration, there is statements of case, disclosure, witness statements and expert reports, they have to prepare hearing bundles. The hearing bundle is the collection of all the important documents produced in arbitration, in the logical order.
The hearing bundle will normally include:
Request for arbitration and Response
Written submissions with annexes
Witness statements with annexes
Relevant documents produced during the disclosure
Correspondence exchange during the arbitration
The purpose of the hearing bundles is to enable the Tribunal and the parties to easily find and refer to the relevant documents at the final hearing. Parties will normally agree, or the Tribunal will set the date by which the parties have to come with an agreed bundle index. Parties then have to make arrangements to produce bundles with accordance to that index. Bundles have to be paginated to facilitate referencing. They may be produced either electronically or in hard copy, but most Tribunals request a hard copy bundles in order to be able to mark them up. It is common for parties to agree that bundles be produced in A5 format to make transportation easier. A sample hearing bundle is available as part of our arbitration guide.
Skeleton Arguments are the written submission which the parties have to exchange shortly prior to the final hearing. Their purpose is to give the Tribunal the overview of the party’s positions and the issues which the Tribunal will have to decide. In the course of the proceedings, the party’s positions usually evolve, so that some arguments may no longer be relevant, and others may be more relevant than before. Skeleton arguments are submissions where this should be made clear, so that Tribunal’s preparation time and the time of the final hearing may be used as efficiently as possible. You can find a sample skeleton argument as part of our arbitration guide.
Parties have to agree on hearing logistics, so that everything goes smoothly at the final hearing. It is important to set the duration of the hearing and the date, as early as possible on the arbitration. For example, after the exchange of the written submissions. If this is left to the last minute, the Tribunal and the parties may take a long time to find mutually convenient hearing dates or the hearing facilities might be unavailable. Once the hearing dates are set the Claimant should approach hearing facilities to make reservations. It is important to ensure that the hearing facility is of the sufficient size, to accommodate all of the participants in the hearing, including the party’s representatives, the Tribunal, the interpreters, witnesses, transcribers and any other participants.
The Tribunal and the parties will normally require breakout rooms where they can consult during hearing breaks. Depending on the amount and issues at stake, the parties may also require professional transcribers who will keep an accurate record of the hearing. It is normal for the Claimant and the Respondent to bear the costs of the hearing venue in equal shares. However, the Claimant will be best advised to agree on this with the respondent in advance, to avoid the situation where the Claimant has to pay the entirety of the costs from its own pocket.
I discuss final hearings in my 7th lecture. They normally proceed in the following way:
Claimant’s opening submissions
Respondent’s opening submissions
Cross-examination of witnesses
Cross-examination of experts
Claimant’s closing submissions
Respondent’s closing submissions
Post-hearing submissions are documents where parties seek to draw out the relevant parts of the evidence heard at the final hearing and summarize their positions based on that evidence. Some Tribunals require post-hearing submissions and others do not. Often, Tribunals decide whether or not to have the post-hearing submissions at the end of the final hearing. Where the Tribunal is clear in its assessment of the evidences and the parties have a sufficient time to explore their legal arguments with the Tribunal, post-hearing submissions might be unnecessary. On the other hand, where hearings last over several days and the legal arguments are complex, some Tribunals may prefer to have one last summary of the parties’ submissions in their post-hearing briefs prior to rendering their final award.
I discuss cost statements in my 7th lecture. A statement of costs is the document which details all the costs incurred by parties in the arbitration proceedings, including legal fees, fees of the Tribunal and any arbitral institutions, the costs of obtaining expert reports, the costs of producing hearing bundles, the costs of the hearing venue and so forth. A sample cost statement is available as part of our Arbitration Guide. Parties may agree to file or simply file that cost statements shortly prior to the final hearing. Alternatively, parties may agree that only the winning party file a cost statement and only once the Tribunal determines who the winning party is. This concludes my lecture on standard directions in international arbitration.
If you require more information, please download our Arbitration Guide at www.fortiorlaw.com. Our Arbitration Guide provides more information as to how to commence the arbitration proceedings and it contains template notice of arbitration and the template response to the notice. Alternatively, get in touch with one of our lawyers at email@example.com.