Originally from Between East and West: Essays in Honour of Ulf Franke

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I. INTRODUCTION

In recent years, users of arbitration frequently complain that arbitral proceedings have become increasingly lengthy and time-consuming, causing the costs of proceedings to increase.1 In particular, the number of briefs exchanged, the number and length of oral hearings, discovery proceedings and extensive taking of evidence, are factors that significantly influence the time and cost factor in arbitration proceedings.2 Arbitrators and the parties’ legal representatives often have difficulties in structuring and conducting the proceedings efficiently observing the principle that length and costs should be in balance with the requirements of the specific dispute without negating the procedural rights of the parties to present their case. In many cases the parties for this reason become frustrated in the course of the proceedings and settle the dispute only to avoid an overflow of costs and a further loss of time.

This development has become a point of major concern and criticism. In particular, companies acting internationally and that have traditionally chosen arbitration as their preferred mechanism of dispute resolution3 meanwhile consider the duration and costs of arbitral proceedings as a disadvantage and seek alternatives which meet their needs for fast, efficient, and cost-saving dispute resolution services. In the light of the current economic crisis these needs show more strikingly than ever as many parties are not able to survive long-lasting arbitral proceedings.

The ICC Commission on Arbitration dealt with users’ expectations in its Report “Techniques for Controlling Time and Costs in Arbitration”4 and recommended various instruments for organizing arbitral proceedings in order to control their duration and costs. In particular, the Report encouraged arbitration users to consider fast-track arbitration proceedings. The Report also pointed out that in practice it is difficult to predict the nature of a dispute and accordingly the suitability of fast-track arbitration at the time of concluding the arbitration clause.