The full report of the “GAR- LCIA roundtable: Time for a Reset?” was published in late 2024.
This report is noteworthy for two reasons. Firstly, it delivers a comprehensive and refreshing assessment by renowned arbitrators and users of the problems in international arbitration. Secondly, it contains 12 recommendations aimed at tackling the growing length and cost of arbitration, including precise measures that are likely to have an immediate impact on document production (such as not ordering production of documents sought to establish a fact for which the other side bears the burden of proof).
Notably, many of the participants regularly sit as arbitrators. It is therefore reasonable to assume that their recommendations are likely to appear in parties’ submissions and influence tribunals’ decisions.
The identified problems
The roundtable was not a review of the many advantages of arbitration, such as party autonomy, arbitrators with industry expertise, confidentiality, and enforceability of awards. It also made no excuses for the criticisms of arbitration, beyond sensibly noting that the growing “complexification” of disputes, whereby evidence has become more voluminous and technically complex, does contribute to the difficulties. Instead, the discussion focused on identifying the growing concerns with arbitration, outlined below.
1. Case Management Deficiencies
One of the most pressing issues discussed was the passivity of arbitral tribunals in case management. Many arbitrators adopt a reactive rather than proactive approach, allowing excessive document production requests, long pleadings, and procedural formalities that closely resemble litigation. Delays and frequent extensions often result in procedural timetables being extended beyond one or two years before a hearing takes place.
2. Overcomplication of Pleadings, Witness Statements, and Expert Reports
It has become common for pleadings to be hundreds of pages long, filled with repetitive arguments and unnecessary detail. Witness statements, which were intended to provide direct factual accounts, now resemble lawyer-drafted submissions. Similarly, expert reports have become overly technical and lengthy, often failing to focus on key issues. This shift benefits well-resourced parties who can afford protracted proceedings, often at the expense of efficiency.
3. Inefficient Hearings and Procedural Formalism
Hearings have increasingly started to resemble courtroom litigation, with prolonged cross-examinations, rigid procedural formalities, and excessive reliance on written submissions. Post-hearing briefs, once intended to be concise summaries, have become lengthy, redundant documents replacing oral closings.
4. Runaway Costs
The escalating legal fees, arbitrator expenses and expert fees is now making arbitration as costly – if not more expensive – than litigation. Some participants also noted that third-party funding, while providing access to arbitration for some parties, has introduced additional complexities and potential conflicts of interest.
Who is to blame and who will address the problems?
The participants recognised that these issues are not new or newly identified. Indeed, they have been discussed for years but there appears to have been little improvement. Discussing the reasons for this, the roundtable considered two fundamental questions: (1) who is responsible for the perceived complications and inefficiencies – parties, counsel, or arbitrators? And (2) who among those groups is best placed to address the problems?
• Parties: parties often have different interpretations of success in arbitration. For example, delay tactics often serve the interests of one party – a respondent facing an unfavourable outcome may seek to prolong proceedings to reach bankruptcy before an award is made.
• Counsel: unsurprisingly, lawyers frequently align with their clients’ interests. They may also financially benefit from lengthy pleadings and protracted proceedings and have less time pressure from prolonged timetables.
Furthermore, without an indication from the tribunal about which issues they may find most important, counsel tend to adopt a “kitchen sink” approach in submissions. In-house counsel may hesitate to challenge this approach, fearing they could later be questioned by their board if the outcome of the case is not favourable.
• Arbitrators: a corollary of party-anatomy is that arbitrators do not have the prescriptive powers of judges. Tribunals’ proposals as to how to limit submissions and streamline procedures can often get vetoed by the parties and counsel.
Moreover, arbitrators are often reluctant to actively engage in case management due to “due process paranoia”, being reluctant to order strict time limits and being reluctant to impose any penalty for non-compliance.
With the abovementioned divergent incentives in mind, most participants agreed that it is primarily the tribunal’s responsibility to engage in proactive case management and get rid of “tribunal autopilot”. As one participant noted, “if arbitrators engage early and frame the issues, good advocates will adjust, and everything will click into place.”
The 12 recommendations
The 12 recommendations focus on streamlining procedures at the early stage, thereby improving case management and efficiency. Practitioners need to keep these recommendations in mind because they may guide tribunals in reaching important case management decisions. They are summarised below.
1. Engaging Decision-Makers Early: Involve parties with decision-making authority in the initial case management conference (“CMC”) to avoid the “disconnect” between a party and their counsel.
2. Empowering Tribunals: Include language in the Terms of Reference or Procedural Order No.1 to empower tribunals to manage cases proactively, with the parties committing not to raise inappropriate due process complaints, and with the approach the tribunal will take in assessing costs explicitly outlined.
3. Identifying Core Issues Early: Direct the parties to identify the principal issues in dispute at the initial CMC, though noting that the issues may evolve as the case progresses.
4. Clarifying Expectations for Witnesses and Experts: Outline what is and is not expected for witness statements at the initial CMC. Similarly for experts, identify the likely areas of expertise required and assess the need for instructions to experts to be crafted.
5. Streamlining Document Production: Give firm directions on document production, with a view to reducing excessive document requests and preventing unnecessary delays and costs. These directions include:
a) There is no right to general discovery of documents in international arbitration;
b) The tribunal will be guided firmly by the intent and purpose of the IBA Rules;
c) The tribunal will deny non-compliant requests, not rewrite them on its own initiative;
d) Document production schedules are to be limited to default maximum number of pages or requests (including sub-requests), with the opportunity for a party to apply for more if it can establish why that is necessary;
e) The tribunal will not order the production of documents sought to establish a fact for which the other side bears the burden of proof; and
f) Interim costs award will be issued if the tribunal’s directions are obviously disregarded.
6. Utilising Electronic Document Management: Establish a common electronic document management platform to be available from the outset of the case through issuance of the award.
7. Imposing Page Limits: Impose reasonable page limits for submissions, witness statements and expert reports.
8. Conducting Case Reviews: Have case review conferences as appropriate and necessary to monitor progress and address emerging issues.
9. Fixing timetable and committing to it: Seek to fix hearings within a year from the initial CMC, and commit to issue awards within say three months post-hearing or from the last post-hearing submissions.
10. Disciplining Unnecessary Applications: Issue interim costs awards to penalise unnecessary applications to discourage delay tactics.
11. Preparing Pre-Hearing Reading List: Require a chronological, hyperlinked “reading list” of most important documents relied upon before hearings, to facilitate tribunal preparation.
12. Using Decision Trees or Roadmaps for Closing Submissions: Direct the parties to present oral closings or post-hearing submissions by way of decision trees or roadmap to help tribunals draft awards in a more efficient way.
Do these recommendations go far enough?
Arbitration is a complex ecosystem where users with disparate interests, different cultures and diverging expectations agree to come together to resolve international disputes. Preserving users’ trust and confidence in the process is vital to the viability and growth of arbitration. Radical changes – such as caps on parties’ legal spend and immutable timelines or other absolute limits – are therefore unlikely to be well received. Instead, criticisms of arbitrations need to be addressed, but without damaging the key advantages of arbitration (such as flexibility). This is a delicate balancing act.
Accordingly, the recommendations are a positive step toward addressing some of the most pressing concerns with arbitration, particularly by enhancing tribunals’ case management initiatives. For example, the recommendations encourage tribunals to consider limits (for example, on page limits), but preserve flexibility via the “reasonableness” assessment.
Additionally, the recommendations may focus the disclosure process (this often being a significant driver of costs and delay), emphasising that there is no general discovery of documents. Moreover, the recommendations specifically note that requests for documents should be limited to those required by a party to discharge its own burden of proof, and not request documents for which the other side bears the burden of proof. Furthermore, the recommendations encourage tribunals to issue interim costs award (rather than deal with costs at the end of the arbitration) if a party disregards the tribunal’s directions and to penalise delay tactics.
The recommendations do not rewrite the rules of arbitration but offer a welcome opportunity for users and tribunals to search for improvements to the process.
Mikhail Vishnyakov, Partner, and Hazel He, Associate, at Cooke, Young & Keidan.
