Over the last several decades, international arbitration has become the preferred method of resolving international commercial disputes. The success of international arbitration has been based on five cornerstones: procedural neutrality; confidentiality; party autonomy; flexibility of the arbitral process; and the enforceability of arbitral awards. With the continued success of commercial arbitration hinging on its appeal to its users, there have been a number of recent initiatives to increase the efficiency of the arbitral process and respond to the needs and concerns of business.
Growth of International Arbitration
At the opening speech of the ICCA Congress in May 2012, Sundaresh Menon, the Attorney General for Singapore suggested that arbitration was currently enjoying a 'golden age'. The evidence for this new age of arbitration is found in the growth in the popularity of arbitration. The caseloads at arbitral institutions have continued to expand both for investment and commercial arbitrations. The International Centre for the Settlement of Investment Disputes administered 159 cases in 2011, compared to only 63 in 2003. International cases administered by the ICC have also increased over the past several years, from 663 in 2008, to 795 in 2011.
Rising to Challenges
In recent years the arbitral community has launched several initiatives to combat perceived inefficiencies in the arbitral process. In 2010, the IBA published a revised version of its Rules on the Taking of Evidence in International Arbitration. The revised IBA Rules seek to make the evidence-gathering process more efficient while preserving the procedural flexibility that remains one of the core virtues of international arbitration. In 2011, the ICC Commission published its Report on the Production of Electronic Documents in International Arbitration. This Report identifies flexible and effective means of addressing document production issues in international arbitration.
In September of 2011, the ICC also issued its revised rules for international arbitration, in force from 1 January 2012, which introduced updated case management procedures to enable and encourage parties and arbitrators to conduct proceedings in an expeditious and cost-effective manner as well as a new emergency arbitrator procedure. The LCIA is also currently reviewing amendments to its rules, due to be published in 2013.
National legislation also reflects a growing demand to reduce inefficiencies and costs in the arbitral process. Hong Kong’s new Arbitration Ordinance, for example, imposes express duties on arbitral tribunals to adopt procedures appropriate to the particular case and to avoid unnecessary delay or expense (s.46(3) Arbitration Ordinance (Cap 609)).
London has traditionally been a key global centre for the resolution of commercial arbitration disputes. London’s current pre-eminence as an arbitral centre reflects the depth of arbitration expertise in London, through specialised arbitration lawyers and a knowledgeable and generally arbitration-friendly judiciary. Whilst London retains its dominant position as a global centre for commercial arbitration - confirmed by the 2010 Queen Mary Corporate Users Survey which showed that 30% of corporations surveyed favoured London as a seat of arbitration - at a regional level, the traditional dominance of European and North American arbitral centres is being challenged by increased competition from Asia, where there has been a concerted effort to improve the attractiveness of local venues to the arbitration community.
In Singapore, for example, the Maxwell Chambers - a purpose-built facility aimed at making Singapore an attractive venue for arbitration - was officially opened on January 2010. The complex houses modern hearing facilities together with a full suite of supporting services. In addition, a new tax incentive was announced in 2007 to boost international arbitration activities in Singapore. This incentive allows a 50 per cent tax exemption for a law practice’s incremental international arbitration work for cases that culminate in Singapore and is open to all foreign and local law practices, subject to meeting the qualifying criteria.
In the past two years nearly all major Asian arbitral institutions have produced revised versions of their Arbitration Rules: SIAC introduced new Arbitration Rules on 1 July 2010 and was the first institution in Asia to include an Emergency Arbitrator provision; CIETAC revised its Arbitration Rules, in force from 1 May 2012, which saw an update to its provisions on summary procedures; the Korean Commercial Arbitration Board revised its International Rules, in force from 1 September 2011; the Kuala Lumpur Regional Centre for Arbitration revised its Arbitration Rules on 2 July 2012, in accordance with Malaysia’s Arbitration Amendment Act 2011; and the HKIAC is currently reviewing amendments to its rules which are expected to published later in 2012.
The increasing competition between arbitral venues and arbitral institutions for work-share will stimulate those in the arbitration community to consider ways to make international arbitration more responsive to the needs of business.
The next challenge for the arbitral community is to ensure that it gets the balance right. Clearly-worded institutional rules and guidelines should assist parties in navigating their way through the arbitral process, but it is important that parties do not feel overly constrained in the way they choose to conduct their disputes. Party autonomy and the flexibility of the arbitral process are vital to the continued success of international arbitration.