The Initial Discussion with the Parties: How Should It Be Done? Which Topics Must Be or May Be Addressed? - Chapter 2 - The Arbitrator's Initiative: When, Why, and How Should It Be Used? - ASA Special Series No. 45
I must admit that when I was first presented with the topic, I was worried that it would, inevitably, be boring. Thinking of my own practice as an arbitrator and what I had seen as counsel, it seemed to me that there is today a more or less established practice as to how arbitrators shape the proceedings. I trust that not only I but a lot of my arbitration colleagues have a set of sample documents under the various institutional rules ready. Nothing speaks against following the standard procedure in a number of cases. But it should not make us blind and lazy when we detect circumstances that request the arbitrator’s initiative to come up with a tailor-made solution.
It is precisely this realization that prompted me to approach the topic from a very practical angle and to first present the standard procedure that I have seen used in order to initiate discussions with the parties and then to describe a few tools that have proven useful in allowing for a more tailor-made structuring.
2. LEGES ARBITRI AND ARBITRATION RULES FOR THE ARBITRAL TRIBUNAL’S POWER TO SHAPE PROCEEDINGS
2.1. The Principle of Party Autonomy
Most national arbitration laws recognize the principle of party autonomy regarding the arbitral procedure, with the result that an agreement between the parties is binding upon the arbitrators. In practice, however, it is rare for the parties to have expressly settled in their arbitration agreement on detailed procedural rules. Consequently, as one leading commentator points out, the arbitrators’ discretion to determine the procedural rules “is one of the foundational elements of the international arbitral process.”
In the absence of any agreement between the parties, the arbitral tribunal may derive its authority to shape the arbitral procedure from two separate legal bases. Numerous national leges arbitri provide that, failing an agreement by the parties, the arbitrators are free to shape the structure and conduct of the arbitral proceedings. For instance, article 182(2) of the Swiss Private International Law Act (the PILA) provides that “[i]f the parties have not determined the procedure, the arbitral tribunal shall determine it to the extent necessary, either directly or by reference to a statute or to rules of arbitration.”
On the other hand, where the parties have referred to a set of pre-existing or institutional arbitration rules and to the extent that such rules provide for the arbitrators’ authority to determine the procedure, the parties may be considered as having impliedly empowered the arbitrators to do so. For instance, article 15(1) of the Swiss Rules provides that the arbitral tribunal “may conduct the arbitration in such manner as it considers appropriate.” Most other leading institutional rules take a very similar approach and, thus, vest the arbitral tribunal with broad authority to shape the arbitral procedure. Although most rules also set forth specific powers of the arbitral tribunal, such as, e.g., the power to set up an arbitration timetable or to decide whether to hold hearings, the arbitrators are generally authorized to fill any gap in the procedural framework provided by the parties’ agreements, the institutional rules and|/or the lex arbitri.