UNCITRAL Publishes Expedited Arbitration Rules

Share:

This article first appeared on Arbitration Notes by Herbert Smith Freehills, here.

In December 2020, we reported that the Working Group II of the United Nations Commission on International Trade Law’s (UNCITRAL) had prepared draft expedited arbitration provisions for the UNCITRAL Arbitration Rules.

UNCITRAL adopted the expedited arbitration provisions (the EAPs) in July 2021. The EAPs entered into force on 19 September 2021. The full text is available here.

UNCITRAL has also published a detailed draft explanatory note to the EAPs (the Explanatory Note). The note is expected to be finalised in the coming weeks (available here).

Expedited arbitration procedures have become increasingly popular and many leading arbitral institutions have now established relevant. The International Chamber of Commerce, for example, introduced their expedited arbitration rules in response to a significant proportion of their caseload involving disputed sums below US$5 million in 2016 (as we reported here). As the UNCITRAL Arbitration Rules (UARs) are widely used in ad hoc arbitrations, the EAPs will facilitate the adoption of expedited procedures for ad hoc arbitrations.

We set out below a summary of the key provisions of the EAPs.

The EAPs apply by agreement only – Article 1

Parties must agree to refer their dispute to the EAPs. If a party unilaterally requests for an arbitration to be expedited under the EAPs without the other party’s consent, the EAPs will not apply to the dispute. Unlike most other institutional expedited arbitration rules, there is no threshold in terms of value of the claim below which the EAPs will automatically apply barring special circumstances.

Disapplication of the EAPs – Article 2

Parties may agree at any time that the EAPs will no longer apply to their dispute. However, where one party wishes to withdraw from the EAPs unilaterally, the requesting party must apply to the tribunal, who may only determine that the EAPs no longer apply if there are “exceptional circumstances” (which are not defined in the EAPs).

Conduct of the parties and the arbitral tribunal – Article 3

Parties and the arbitral tribunal shall act or conduct the proceedings (as applicable) expeditiously. The tribunal is expressly given the discretion to use any technological means it considers appropriate to conduct the proceedings, including to communicate with the parties and to hold consultations and hearings remotely.

PCA is the default designating or appointing authority – Article 6

The EAPs simplify and shorten the procedure in Articles 8-10 of the UARs for the designation of an appointing authority. If the parties do not agree on the choice of appointing authority or if 15 days lapse after the receipt by all parties of a proposal of an appointing authority, any party can request the Secretary-General of the Permanent Court of Arbitration (PCA) to designate the appointing authority or to serve as one.

Sole arbitrator by default – Article 7

A sole arbitrator should be appointed for the EAPs. However, if the parties agree on appointing more than one arbitrator, the relevant provisions of the UARs will apply for the purposes of arbitrator appointment only.

Hearings are optional – Article 11

The tribunal has the discretion to decide that there will be no hearing(s), in line with other institutional expedited arbitration procedures.

Timeframes and discretion of the arbitral tribunal – Articles 10 and 16

As with many other expedited procedures, the EAPs specify a time period for the conclusion of the arbitration.

• The default position is that the award has to be made within six months from the date of the constitution of the tribunal.
• The tribunal may extend this time limit by a total of a further three months (i.e., a total of nine months from constitution of tribunal) if the tribunal considers that there are exceptional circumstances.
• If the tribunal is of the view that there is a risk of not meeting the extended time limit, it can propose a final extension to which the parties must agree before it is adopted. The Explanatory Notes indicate the tribunal may suggest at the same time that if there is no agreement to this final extension, any party can request the disapplication of the EAPs. If the tribunal agrees, it can then conduct the arbitration in accordance with the UARs.

Investment arbitration

The Explanatory Note states that the suitability of the EARs for investment arbitration is a question left to the disputing parties.  As the EAPs form an appendix to the UARs, the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (Transparency Rules) would apply to an investor-State dispute referred to arbitration under the EAPs, just as they would apply to any relevant dispute under the UARs.  However, parties may still agree separately that the Transparency Rules do not apply to the arbitration.

Comment

The new EAPs represent a flexible and customisable option for parties intending to conduct their ad hoc arbitration proceedings on an expedited track. The primacy of party autonomy, which is a hallmark of the UARs, is also reflected in the EAPs. The EAPs can only apply by express consent of the parties, and there are no circumstances in which they would apply by default.

With regards to timeframes, it is noteworthy that the EAPs take a pragmatic view that extensions may be needed but the default position limits the timeframes for extensions before a party may request for the EAPs to be disapplied (in which case the UARs would apply).

Finally, the structure of the EAPs as an appendix to the UARs allows for further flexibility, as by agreement the parties can customise or adjust some elements of their expedited arbitration by drawing from the UAPs (such as, for example, in relation to the appointment of arbitrators).