91视频

Experienced dispute resolution lawyers know that companies have concerns about participating in international arbitration, which has a reputation for being expensive and time consuming. These concerns are understandable given the effort and time arbitral proceedings may take, as well as the legal and other costs involved.

However, the authors are confident that companies can use international arbitration cost-effectively, and can do so even if the amount in dispute may not be especially large.

This article discusses potential ways to reduce the cost and length of international arbitral proceedings, as well as factors that may encourage companies to consider how arbitration can be conducted more efficiently, and less expensively, than they would have imagined.

Expedited procedures cut arbitration time

First, where possible, use the expedited (or fast-track) procedures that most major international arbitration institutional rules offer. As the name suggests, expedited procedures are meant to enable faster and less costly arbitral proceedings than regular arbitration. Depending on the rules, expedited procedures apply if parties agree to use them, or sometimes by default, if the amount in dispute falls below a certain monetary threshold when the arbitration has commenced or the contract containing the arbitration agreement has been signed.

While regular arbitration often takes at least 12 to 18 months before a final arbitral award is issued, expedited procedure rules require the award to be made more quickly, typically not more than six months from the date the tribunal is constituted and receives the case file, or shortly afterwards.

To reduce time and cost, a sole arbitrator, rather than a three-member tribunal, usually presides over an expedited arbitration. The sole arbitrator has discretion to establish significant time and cost-saving limits for the expedited process, including to exclude document production, restrict the number and length of written submissions, and witness evidence. A sole arbitrator may decide the case based only on the documents that the parties have submitted, with no oral hearing.

Streamlining evidence, virtual hearings, procedure

Second, if an arbitral proceeding does involve document requests and witness statements, confine such requests and statements only to what is essential. Document requests and production, along with witness interviews and examination at an oral hearing, are among the most expensive and time-consuming aspects of international arbitration, so streamlining these tasks is key to enhancing cost-effectiveness.

Third, where appropriate, conduct meetings and oral hearings with the arbitrator and opposing counsel virtually, rather than in person. Preparation for and participation in such meetings and hearings unavoidably entails expense, but not having to travel can result in important cost and time efficiencies.

Fourth, avoid unnecessary procedural steps that add substantial time and cost. For example, where an arbitration involves issues relating to jurisdiction as well as liability, the question may arise as to whether the arbitral proceeding should be bifurcated, that is, divided into a first phase addressing the jurisdiction, and a second phase addressing liability.

Resist inefficient bifurcation, cut costs

If, however, the factual issues concerning jurisdiction significantly overlap with the liability issues and involve much the same documentary evidence, bifurcation would likely be procedurally inefficient (unnecessarily time consuming and costly) and should be resisted.

It is also important to keep other considerations in mind in connection with arbitration costs.

First, international arbitration rules often provide that arbitrators may decide that all or part of the lawyers’ fees and other arbitration expenses are to be borne by losing parties. In cases where losing parties act badly during the arbitration – for example, delaying or disrupting the process – arbitrators may decide that 100% of lawyers’ fees and costs are to be borne by the losing parties.

Second, in recent years an increasing number of smaller international dispute resolution firms have emerged that may be able to deliver high-quality services at more flexible and reasonable billing rates than larger law firms typically offer.

Finally, the best way to reduce the costs of international arbitration is to avoid participating in arbitration where possible.

In this regard, if a company finds itself in a cross-border dispute with a counterparty, it might consider the alternative path of resolving the matter by international mediation.

International mediation is essentially a negotiation between two disputing companies facilitated by a mediator, and is much less costly and time consuming than international arbitration, although if mediation fails the companies may still need to pursue arbitration.

Kengo Nishigaki is a representative partner and Joel Greer is a counsel (foreign registered lawyer) at GI&T Law Office in Tokyo

GI&T Law Office
23F Marunouchi
Kitaguchi Building,
1-6-5 Marunouchi, Chiyoda-ku,
Tokyo 100-0005, Japan

Contact details:
T: +81 3 6206 3283
E: kengo.nishigaki@giandt-law.com
E: joel.greer@giandt-law.com