Ten Drastic Proposals for Saving Time and Costs in Arbitral Proceedings

Abstract

Some twenty years ago, time efficiency and cost saving were applauded ad nauseam as being the main advantages of arbitral proceedings.1 In the following years, arbitration has been a tremendously successful ‘product’ for solving disputes, in particular on an international level.2 However, the tide has turned in the meantime, and the inappropriate duration and the magnitude of costs incurred have been identified as the future tombstones of international arbitration.3 And it is true: mid-sized arbitrations are rarely concluded within two years, a significant number of them last four years or longer.4 Costs have definitely exploded: it is not rare that more than 10 % of the amount in dispute is ultimately paid to the arbitrators, the attorneys and the arbitral institutions.5 Against this background, small arbitrations have become almost unaffordable. This article is based on a presumption: it is the parties themselves and their attorneys who are responsible for this deplorable development, namely that arbitrations have become lengthy and expensive; not responsible are the arbitral institutions, the arbitration rules or the arbitrators.6 In arbitration conferences all over the world companies join in the lament about the length and costs of arbitral proceedings, but in almost any given specific case the same parties and their external and in-house counsels are unwilling to accept rules which would accelerate the proceedings. They insist on two full rounds of submissions, a document production phase and witness statements, followed by a multi-day hearing and post–hearing briefs, sometimes in two additional ‘rounds’. When asked whether a deviation from this standard procedure would not be advisable to save time and costs the typical answer is: ‘In principle, we agree with innovative measures to accelerate the proceedings … but not in this case’ The reason for this reluctance is evident: too overwhelming …