ICC publishes in-house guide on effective management of arbitration

Practitioners and arbitral institutions alike are constantly looking for ways to smooth and improve the arbitral process. One of the latest contribution to this effort is a June 2014 guide from the International Chamber of Commerce (ICC) entitled "Effective Management of Arbitration: A Guide for In-House Counsel and Other Party Representatives" (the Guide).

The ICC's intentions

According to the ICC, the purpose of the Guide is to:

"provide in-house counsel and other party representatives, such as managers and government officials, with a practical toolkit for making decisions on how to conduct an arbitration in a time- and cost-effective manner, having regard to the complexity and value of the dispute."

The ICC states that although the Guide was conceived with the ICC Rules of Arbitration (the Rules) in mind, most of the Guide can be applied to arbitrations (whether big or small) conducted under other institutional rules.

The 65-page Guide is focused on time and cost issues in the management of arbitrations, rather than strategic considerations, which tend to be case- specific. It is split into three sections, which we consider in detail below.

Settlement Considerations

The Guide accepts that settlement is a complex issue, and sets out briefly the potential issues that parties should bear in mind.

The Guide gives examples of methods and procedures available to reach settlement, such as mediation, neutral evaluation and mini-trials[1]1, as well as case management techniques such as bifurcation of jurisdiction, liability or quantum.

Case Management Conference (CMC)

CMCs are meetings between the tribunal and parties at which practical issues in the arbitration will be resolved, such as documents to be submitted, the timetable to be followed, and whether an oral hearing is required.

The Guide explores the purpose of CMCs, as well as Article 22(1) of the Rules, which requires tribunals and parties to make every effort to conduct the arbitration in an expeditious and cost effective manner.

The Guide emphasises that although Article 22(1) refers to expeditious and cost effective proceedings, speed and low cost are not ends in themselves. The complexity and value of a dispute can have significant impact on the procedure that would be appropriate and cost-effective in resolving the dispute.

Topic Sheets

The Guide contains a number of "Topic Sheets" to assist parties, counsel and tribunals to make appropriate choices for the conduct of the arbitration. The topics covered in the Guide are: 

1. Request for Arbitration
2. Answer and Counterclaims
3. Multiparty Arbitration
4. Early Determination of Issues
5. Rounds of Written Submissions
6. Document Production
7. Need for Fact Witnesses
8. Fact Witness Statements
9. Expert Witnesses (pre-hearing issues)
10. Hearing on the Merits (including witness issues)
11. Post-Hearing Briefs

Each Topic Sheet is divided further into the headings set out below. We take "Document Production" as an example, given that this topic is often a source of significant concern for companies involved in international arbitration.

• "Presentation"

This section explains the relevant ICC Rule (if any) for the procedural step in question.

The Guide notes that there are no specific rules governing document production, although Article 19 of the Rules allows parties to agree on procedures to be applied, and empowers tribunals to decide in the absence of agreement between the parties.

The Guide concludes that the Rules allow parties and the tribunal significant freedom in choosing the scope and conduct of document production, provided that the parties are treated fairly and impartially, and each party has a reasonable opportunity to present its case.

The Presentation section also sets out the key "Issue" relevant for that particular procedural step. For Document Production, this is "Is document production desirable, and if so, how much document production should there be?"

•  "Options"

This section explains some of the possible approaches parties might take. For Document Production, the options considered are:

1. no document production;
2. production limited to specific documents or narrow categories of documents, which are relevant and material to deciding an issue in the arbitration; and
3. broad document production as used in some common law jurisdictions.

• "Pros and Cons"

This section considers the impacts of utility, time and cost of each step considered in a Topic Sheet. For Document Production, the Guide notes that it can be a very expensive and time-consuming process, where the length of time and costs required tends to increase in line with the scope of the exercise. On the other hand, the Guide notes that where essential documents required by one party are in the possession of the other party, document production can be essential.

• "Cost/Benefit Analysis" and "Questions to Ask"

As the headings suggest, these sections help parties consider how to conduct a cost/benefits analysis for each step in the arbitration. In short, before embarking on a particular step, everyone involved should consider whether the time and cost involved in conducting a particular procedural step in a certain way would be worthwhile, and what sort of questions should be considered to make that assessment. For Document Production these questions include the following:

1.  Are any requests for document production genuinely useful or necessary for a party to make its case or can the party rely effectively on the documents in its possession?
2. What extent of document production is genuinely useful and necessary?
3. When should document production occur?
4. What is the estimated cost of searching for and producing documents, as well as the cost of reviewing and analysing documents that have been produced?
5. Is the benefit of document production worth the cost, and if so, why?

• "Other Points to Consider"

The last section sets out other considerations that can impact the time and cost of the arbitration. For Document Production, these considerations include whether and how to deal with document production in the contractual arbitration clause, whether document production should occur more than once, whether it should occur before or after written submissions, and a reminder to take translation costs into account when making cost estimates.

For further information, please contact Peter Godwin, Partner, Chris Hunt, Senior Associate, Elaine Wong, Senior Associate,Yosuke Homma, Associate, or your usual Herbert Smith Freehills contact.

[1] See Herbert Smith Freehills ADR Practical Guides (available in English only) for further information on ADR. The new ICDR mediation and arbitration rules – what's new and different (Tokyo dispute avoidance newsletter No. 135, January 2014); ICC's new mediation rules designed for international business (Tokyo dispute avoidance newsletter No. 141, July 2014) may also be of interest.