The need for speed: Is fast track arbitration suitable for your dispute?

16 December 2013

Used correctly, fast track arbitration is an efficient and effective way of resolving disputes. It is not, however, suitable for every kind of dispute and parties seeking to use fast track arbitration should consider the practical realities.

Fast track arbitration goes some way to addressing concerns that traditional arbitration has become too much like litigation and can no longer deliver on its promise to provide fast and cost effective dispute resolution.  These concerns are particularly relevant in the context of commercial projects.

Fast track arbitration is not a distinct kind of arbitration.  Rather, it is simply a meaner, leaner version of traditional arbitration.  In contrast to traditional arbitration, procedures in fast track arbitration are expedited with the aim of accelerating the delivery of the award.  Ordinarily, this is achieved by limiting the timeframes for procedural steps, narrowing disclosure and confining submissions to writing.

Most major international arbitral institutions have updated their respective rules with a view to making them more efficient and commercially competitive.  For example, ACICA’s 2011 Expedited Arbitration Rules and the ICC’s update to its rules in January 2012 were done with the express purpose of providing a faster more efficient arbitration experience.

There are, however, a number of practical realities that parties should consider before adopting fast track procedures.  For example:

  • Will the parties be ready and able to meet the strict time limits required by fast track arbitration? If, for example, the dispute is too complex for fast track arbitration a failure to meet timeframes or an inability to consider all the issues in the time allowed may severely prejudice the proper resolution of the dispute.
  • Can the parties commit the resources (in-house legal counsel, experts and factual witnesses) necessary to make their fast track arbitration a success? The dispute may require a concentrated effort of resources from multiple areas across the business, e.g. management, experts and legal. Convening the Board repeatedly to make decisions on issues commercially material to the arbitration can often be challenging and frustrating for all involved. Similarly, experts often need to be retained on an almost full-time basis to meet all the demands fast track arbitration requires. This may not be realistic for experts who are in high demand.
  • Are the parties willing to cooperate (eg. on procedural matters and rules of evidence) in order to resolve the dispute in a short timeframe? In certain types of projects, it will often be in the interest of one of the parties to stall proceedings if a dispute arises.
  • What are the consequences if the arbitration cannot be finished within the agreed timeframe? If the time for the award lapses, the arbitration will be frustrated and the parties will be forced to litigate the matter in court. Not only will this result in increased costs and delay, but the parties will also be forced to settle their dispute in a forum the parties had originally sought to avoid.

While the idea of fast track arbitration can be attractive, it can give rise to its own set of problems. The practical realities of fast track arbitration warrant proper consideration. In many cases a ‘four-eyes review’ in addition to buy-in across the business is advisable so that the need for speed does not result in a prang.

The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.

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