Introduction
“I venture to begin by suggesting that this new age of arbitration is in fact its golden age. Those among us who practice it are extraordinarily privileged to be able to do so at this time. [It is the best time] to embark on a course of collective self-reflection … to plant the seeds of change so that our industry will remain vibrant and continue to play a critical role in the global administration of commercial justice”.1
Arbitration has become the dispute resolution forum of choice in international commerce and trade. The ostensible advantages of international arbitration which have led to the ascension of this private mechanism of dispute resolution revolve around principles of expediency and cost-efficiency. In recent years, empirical studies have sought to test the veracity of these conventional attitudes to international arbitration with mixed results. Even as the international business community and legal practitioners embrace a “golden age of arbitration”,2 concerns are mounting from end-users of arbitration’s unwholesome tendency of resulting in soaring costs and protracted delays.
This is not to suggest that the international arbitration community has stood unmoved by these developments. Just as international arbitration has been influenced by certain dilatory or otherwise “negative” practices from domestic curial cultures, certain “positive” dispute resolution procedures with origins in common or civil law systems have been adapted to facilitate the international arbitration process,3 often developed or advocated by experienced practitioners and renowned scholars. This article outlines a small selection of procedural innovations that are found in arbitration practice alongside their associated effects and implications. Some of these innovations have been more successful, while others remain untested.
At the outset, it should be noted that these procedural innovations cannot be assessed in theoretical isolation. Unfortunately, it is unlikely that any procedural development would ever be immune to the ingenuity (or the insistence) of parties and their learned counsel. The potential benefit of such procedural tools is influenced by the players to the arbitration, including the arbitrators who are tasked to maintain control over proceedings and who are often under the obligation to ensure the “expeditious and economical” determination of the dispute.4 The procedural innovations discussed in this paper are as follows: the Scott Schedule, the Redfern Schedule, the Reed Retreat, the Sachs Protocol, and the Kaplan Opening.
Selected Procedural Innovations
Scott Schedule
The Scott Schedule provides a convenient framework for the identification of the issues in dispute. The claimant supplements its statement of claim with a tabular representation of its position on the various issues at hand, with a column depicting the relevant evidence in support thereof. The respondent then replies to each issue with a statement of admission or denial and the reasons underpinning its position. The Scott Schedule reduces the time and cost involved in the hearing and decision-making phases of a trial, by making clear which issues are already agreed upon, thereby drawing into focus the most pertinent issues.
It is intended that the issues are presented in a clear and concise manner by way of a table, which eliminates the need for repeated referral to a multitude of pleadings. This facilitates the parties’ identification of issues in which the costs of adjudication outweigh the difference in their respective positions. This may then assist the parties in carving out areas of agreement or settlement. The Schedule can be particularly useful in certain types of claims (construction comes to mind) where there are multiple heads of claims for various defects, and it is often more convenient to review the parties’ claims in a tabular form.5
However, in using the Schedule, care must be taken by the Tribunal to avoid excessive exchanges of rebuttals and surrebuttals between the parties. Attempts to overload the Schedule with irrelevant and unnecessary information will undermine the brevity that is essential to the efficacy of a convenient reference tool. In order to prevent such inefficiencies, the parties may agree to (or the tribunal may order) page limits to ensure the Schedule remains concise.
Redfern Schedule
The discovery process in international arbitration has the potential of evolving into a quagmire of epic proportions, ensnaring counsel and arbitrators alike. The problem of endless party-to-party exchanges manifests itself in spiralling costs and painstaking work by the tribunal in unravelling complexities. This issue is particularly pertinent in international arbitration where counsel may hail from differing legal systems in which divergent approaches to the discovery process are taken. There exists extensive commentary on the discovery process in international arbitration and how it may be standardised and streamlined. The International Bar Association has taken great strides in this regard by developing and maintaining its Rules on the Taking Evidence in International Arbitration (“IBA Evidence Rules”).
In the same vein, the Redfern Schedule is a collaborative document which seeks to facilitate the discovery process. Similar in operation to the Scott’s Schedule, the Redfern Schedule is a tabular document logging requests for disclosure of documents in a convenient manner by setting out: (i) a description of the document being requested; (ii) the requesting party’s justification for the request; (iii) the opposing party’s reasons for refusing the request, if any; and (iv) the tribunal’s decision on the request.6 A prudent tribunal may be inclined to implement strict limits – as with the Scott Schedule, the Redfern Schedule is vulnerable to the pitfalls of information overload.
Notwithstanding the IBA Evidence Rules and the increasing popularity of the Redfern Schedule, the discovery process often continues to prove itself a vexing process for all involved. Lengthy rebuttals and surebuttals obfuscate central issues in contention and may lead to satellite disputes. Costly and time-consuming “rabbit holes”, these distractions draw the parties further away from full and final resolution of their dispute. Increasingly, practitioners have drawn from civil law practices in attempting to curtail the time and effort spent on the discovery process. One suggestion in this direction may be to limit discovery requests to specific documents, as opposed to broad categories or types of documents. An even more extreme version might simply be to disallow requests for documents all together. Under such a proposal, instead of the parties engaging in a protracted exchange on why certain documents should be produced or not, the party receiving such a request is free to decline its production, where it would then be open to the tribunal to make the inference it deems fit.
Reed Retreat
The Reed Retreat is essentially a gathering of the tribunal members before the commencement of the hearing to discuss the impending hearing and consolidate the issues it would like the parties to address. The Reed Retreat has been described as a “prod to the conscience of the arbitrator”,7 which would encourage individual tribunal members to digest the pleadings of the parties independently in anticipation of having a meaningful dialogue with the rest of the tribunal. Additionally, it is intended that the Retreat would facilitate the decision-making process by allowing the tribunal members to discuss and formulate targeted directions for the parties. The potential advantage of implementing the Retreat is speedier proceedings with counsel guided by concise directions by the Tribunal, in turn resulting in significant cost-savings.
Sachs Protocol
A problem prevalent in technically complex disputes is the difficulty adjudicators face in discerning the credibility of evidence rendered by partisan experts. The Sachs Protocol8 involves an innovative composite system whereby each party to the arbitration proposes a shortlist of a given number of suitably qualified experts. The tribunal then chooses one (or more) expert from each list and the final selection will constitute the “expert team”, which reports to the Tribunal directly (as opposed to either party). The expert team is expected to prepare a joint report to facilitate the tribunal’s decision-making, in relation to which the parties may propose amendments for the tribunal’s consideration. Additionally, the Protocol envisages at least one session for the both parties’ counsel to address and query the expert team in the presence of the tribunal.
Kaplan Opening
The Kaplan Opening9 is intended to be a hearing after the first round of written submissions and witness statements, but prior to the main hearing itself. It is an opportunity for counsel to briefly introduce their respective positions to the tribunal. The parties may even be required, or may otherwise wish to serve the tribunal with skeletal arguments in advance. The main advantage of the Opening is said to be the convenience and efficiency it adds to the tribunal’s decision-making. The tribunal gains a better understanding of the case sooner, which facilitates its preparation. The tribunal also enjoys the opportunity to engage in constructive dialogue with the parties at an earlier stage, which ties in with the aspirations of the Reed Retreat. Furthermore, counsel’s physical presence before the tribunal earlier in the arbitration process may foster a collegial atmosphere which would facilitate rational and reasonable exchanges between opposing counsel.
However, the implementation of the Opening may also lead to certain downstream difficulties. Pre-hearing discussions may cause the tribunal to make important decisions regarding the case fairly early and without the benefit of evidence which would have otherwise surfaced in the course of the hearing. Disgruntled parties may harness such occurrences as grounds of resisting the enforcement of the ensuing award. Further, the Opening may also lead to protracted arguments over inter alia, which issues are to be prioritised in the subsequent hearing, thereby increasing the potential for satellite disputes and escalating costs.
Future Possibilities
Apart from the methods discussed above, the authors have also observed an increasing trend in parties attempting to narrow the scope of arbitrations by carving out preliminary issues, whether on jurisdiction or on the merits. In particular, the authors have found that pre-hearing meetings or correspondence between parties and the tribunal, specifically to consider whether any arguments or issues may be segregated and ventilated by way of a preliminary hearing are highly useful. It may be possible in some cases that parties could agree to a statement of facts based on which those preliminary issues might be determined, in circumstances where the underlying facts may not be in dispute. This would eliminate or circumscribe the need for cross-examination and make it possible for more issues to be determined on a preliminary basis. It should be added, however, that the utility of this exercise can be undermined where parties have entrenched positions. Nevertheless, parties and tribunals may perhaps consider including a phase in the procedural timetable where such discussions can take place, and this may even form part of the tribunal’s “Procedural Order 1.”
Consistent with the aim of disposing of key issues earlier on in the process, the possibility of applying for summary judgment or to strike out parts or the entirety of a claim or defence should be given serious thought as well. Such applications (or determinations) are still relatively rare in international arbitrations because of lingering concerns as to whether a tribunal has the power to rule on a summary basis alongside fears that the affected party may subsequently challenge the award on the basis that it was not given an opportunity to be heard. There is some indication, however, that such concerns may soon be put to rest.10
Some Concluding Thoughts
“The citation of a plethora of illustrative authorities, apart from being time and cost-consuming, presents the danger of so blinding the court with case law that it has difficulty in seeing the wood of legal principle for the trees”.11
Ultimately, the credibility of international arbitration lies in the hands of its practitioners, which counts in its global ranks, amongst others, English barristers and solicitors, continental European avocats and American lawyers, each with their own traditions borne of unique legal lineages. As such, advocacy in international arbitration is conducted in an environment which may be wholly alien to an advocate’s primary training and experience. While advocates have largely retained a predilection for the familiar, it is heartening to observe counsel and arbitrators increasingly adaptive to circumstances in order to ensure the efficiency of international arbitration and its sustainability as a competitive method of dispute resolution.
While the procedural innovations described in this article are inspired by best practices across legal systems, they remain vulnerable to the self-serving (but ultimately counter-productive) strategies and dilatory tactics by parties and counsel. An example is the proclivity of counsel to include every authority and argument no matter how insignificant or trivial, which bears the potential of degrading the utility of the various procedural innovations discussed in this article. In this regard, the words of Lord Diplock in Lambert v Lewis echo through the ages, an evergreen reminder that advocacy is essentially the art of persuasion; and in order to persuade, one has to be succinct.
This article may be cited as follows: Paul Tan and Samuel Seow, “An Overview of Procedural Innovations in International Commercial Arbitration”, International Arbitration Asia (9 December 2014) (http://www.internationalarbitrationasia.com/v2/articles/singapore/international-commercial-arbitration).
* The authors are grateful for the research assistance of Mr Luke Lee and Ms Peiyin Yap, currently reading law at Manchester University and Bristol University respectively. This article was based on a talk delivered by the authors in Bangkok, Thailand, at the 10th Colloquium of the Thai Arbitration Institute on 21 August 2014. A version of this article was published on the Singapore Law Gazette (November 2014).
1 Sundaresh Menon, “International Arbitration: The Coming of a New Age for Asia (and Elsewhere)” (Speech delivered at the opening plenary session International Arbitration Committee, 10 June 2012), 1-2.
2 Ibid.
3 See Leon Trakman, “‘Legal Traditions’ and International Commercial Arbitration” (2007) American Review of International Arbitration; UNSW Law Research Paper.
4 For example see r 16.1 of the SIAC Rules.
5 Richard Manly, “The Use of Scott Schedules in Technology, Engineering and Construction Litigation” (2011) 27 Building and Construction Law Journal 151.
6 See Nigel Blackaby and Constantine Partasides, Redfern and Hunter on International Arbitration (5th edition, Oxford University Press, 2009) [6.113] – [6.116].
7 Charles N. Brower, Michael Pulos and Charles B. Rosenberg, “So is there anything really wrong with international arbitration as we know it?”, found on Global Arbitration Review.
8 “Protocol on Expert Teaming: A New Approach to Expert Evidence”, Arbitration Advocacy in Changing Times, ICCA Congress Series No 15, 135 (Kluwer, 2011).
9 Neil Kaplan, “If it Ain’t Broke, Don’t Change It” (2014) 80 Arbitration 172.
10 Travis Coal Restructured Holdings LLC v Essar Global Fund Limited, [2014] EWHC 2510.
11 Lambert v Lewis [1982] 1 AC 274 (Lord Diplock).
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