FAST-TRACK ARBITRATION - Vol. 2 No. 2 Aria 1991
Hans Smit - Stanley H. Fuld Professor of Law and Director of the Parker School of Foreign and Comparative Law, Columbia University.
Originally from American Review of International Arbitration - ARIA
There is a new product on the international arbitration market. It is called fast-track arbitration. Although it was provided for in contracts between international business enterprises, the creative efforts of the ICC International Court of Arbitration in Paris have made it a reality. If left to its own devices, it would most probably have died a natural death. But through the joint efforts of the ICC International Court of Arbitration, the tribunal, and the parties, it was brought into the world alive and kicking. It is likely to have a very promising life.
In the case in which it was born, long-term contracts provided for renegotiation and arbitration within a sixty-day period of certain components of the price of a commodity, composed of various elements. The contract spelled out in adequate detail the steps to be taken in the renegotiating process. The party initiating the process had to serve written notice of its proposals on the other party at least sixty days before the new contract year. The other party had to serve its written response within fifteen days thereafter. If no agreement could be reached within 15 days before the beginning of the new contract year, either party could, within the next ten days, elect arbitration under the ICC Rules. The tribunal had to render its award sixty days after the commencement of the new contract year, which was November 1.
However, no provision was made as to how this arbitration was to be conducted. The only things the contract provided were that the tribunal, composed of three members, was to render its award within 60 days after the beginning of the new contract year and that it could decide only the issues contractually specified for this fast-track treatment. It was left to the ICC International Court of Arbitration and the tribunal to determine whether and how this could be done.
The following is a description of the steps taken to achieve this end and the problems encountered and resolved.
II. THE PROBLEMS FACING THE ICC COURT
The request for arbitration was filed on October 21, only 10 days before the beginning of the new contract year. The award had to be rendered by December 30. This left some seventy days to D-day. However, the opposing party significantly decelerated the pace by taking the full thirty days allotted by article 4(1) of the ICC Rules to file its answer. This brought the case down to forty days.
A further complication then arose; the respondent objected to the arbitrator proposed by the claimant. The moment the non-confirmation request was made, the ICC Secretariat moved with lightning speed. Benefitting from the fact that article 2.7 of the ICC Rules prescribes no fixed time limit for processing a request for non-confirmation, it managed to rule on the request within a very short period. However, since the Secretariat upheld the challenge, the claimant had to propose a new arbitrator. The Court gave it twenty-four hours for this purpose. In the meantime, since the parties had not agreed upon the chairman, the Court had to take the necessary steps to have a chairman appointed. This required going through the National Committee of the neutral country selected, which, of course, also had to act with all possible speed.
By December 20, the tribunal was in place, and the file transmitted to its members. Under the contract, the tribunal had until December 30 to render its award. Furthermore, all of its members, including the chairman and the arbitrator newly selected by the claimant, were still subject to challenge by the parties within 30 days after their appointment in the period between December 18 and 20, 1991. Fortunately, the ICC Court had managed to persuade the parties to give the tribunal a little more breathing space by stipulating January 8 as the date by which the award was to be rendered. All other problems were left for the tribunal to resolve. Among these problems were the fact that the tribunal had been appointed in two separate proceedings, which raised the same issues but which the parties had refused to consolidate, the still open possibility of challenge of the arbitrators, and, most important of all, how the actual arbitration was to be conducted.