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“FAST-TRACK ARBITRATION: A NOVEL SOLUTION TO INTERNATIONAL ARBITRAL DELAY”

Updated: Feb 12

Author: Umra Rehmani, B.A.,LL.B(Hons.) From Faculty of Law, Aligarh Muslim University.

Co-author: Zoya Khan, B.A.,LL.B(Hons.) From Faculty of Law, Aligarh Muslim University.


Abstract

Almost all the activities have been halted by the noble coronavirus yet the legal arena has not failed to play its significant role as a peace maker. Alternate Dispute Resolution, in particular, Fast-Track Arbitration, is said to be one of the speedy resorts for settling down the disputes between the parties by getting the arbitral awards within months rather than years. Basically, fast track arbitration is not a distinct system of arbitration. But it is actually a general characterization for an accelerated arbitral procedure. It actually enables the parties to resolve their disputes mutually and with ease at their homes digitally. It is also well-known for its cost efficiency, quick disposal of disputes and rendering of international arbitral awards by avoiding unnecessary proceedings to be followed in the Courts.

Thus, Fast Track Arbitration is not just fast but it is actually efficaciously fast. The parties can opt it either before or at the time of the appointment of arbitral tribunal. Hence, the Parties looking for an efficient and speedy resolution of their disputes can definitely resort to Fast Track Arbitration. Though, the Parties cannot knock the doors of the Court to mandatory impose the process of Fast Track Arbitration upon them. This article outlines a brief as to why Fast-Track Arbitration should be encouraged world-wide? This paper uses qualitative approach to describe and discuss efficiency of Fast-Track Arbitration, also known as Expedited Arbitration.

Keywords: Arbitrator, Arbitral award, Cost-efficient, Dispute, Fast-track arbitration.

INTRODUCTION

The ever-increasing complex ties between firms, investors, and states have resulted from the rise and globalisation of cross-border investment and trade. Though such partnerships may ultimately fail and the parties must evaluate the best methods for resolving any issues that may emerge. Arbitration became the normal procedure for resolving disagreements in many circumstances. Hence, commercial arbitration is a private form of binding dispute resolution before an unprejudiced bench that arises from the parties’ agreement but is regulated and executed by the state. Transnational commercial arbitration has not yet lived up to its eventuality as a medium of dispute resolution. Theoretically, Arbitration is a more expeditious means of resolving disputes than litigation in a judicial forum.

Though, internationally it is characterized by procedural delays. Thus, several solutions have been proposed to expedite transnational commercial arbitration, including an arbitral court of appeal, a one-time arbitrator system with obligatory primary meetings. Recently, fast-track international arbitration has come to rescue from the problem of arbitral delay.

The American Review of International Arbitration has also applied fast-track solution. Fast Track arbitration may be demarcated as a complete arbitration technique compressed into a shorter length for a quicker decision of the dispute. Parties may additionally opt this technique or not. After opting for it, an emergency provision is supplied for in maximum country wide arbitration acts and arbitration guidelines.

Fast-track arbitration shows a silver lightning as a mode of expediting international arbitral procedure. However, if it is to make fast-track arbitration a feasible volition alternative to conventional transnational arbitration, it must be institutionalized. It is therefore proposed that international arbitration institutions adopt optional fast-track arbitration rules to supplement their current rules of arbitration.


  1. FAST TRACK ARBITRATION: AN INSIGHT

Foremost, it is significant to note that fast track arbitration is not a separate system of arbitration but relatively a general depiction for an accelerated and augmented arbitral procedure. Arbitral proceedings with very rigorous deadlines are usually referred to as fast-track arbitration. Expedited Arbitration is an operative mode of resolution which cannot be delayed due to any reason whatsoever. Being a part of normal arbitration, a sole Arbitral Tribunal is established upon the consent and accord of parties in it, having restricted procedures to be followed to accelerate the procedure of dispute resolution. Through Fast Track Arbitration, a swift and operative award is pronounced by the Arbitral Tribunal thus, cutting down the costs and adjournments allied with a regular arbitration. Fast track arbitration would be distinguished from emergency arbitration, that is also a compressed procedure permitting a party to apply for urgent interim or conservatory procedures that cannot anticipate the constitution of an arbitral tribunal. Such strategies, are opposite to an award issued below a fast-track arbitration, does now no longer have a res judicata effect.


Fast track arbitration is a kind of ad hoc arbitration. Numerous significant international arbitration institutions propose explicit rules for fast-track arbitration such as American Arbitration Association, the Arbitration Institute of the Stockholm Chamber of Commerce & the German Institute of Arbitration. Fast track arbitration may also take place under the rules of institutions which lack exact regulations for accelerated procedures, or have only undeveloped and basic provisions in this regard. The utmost well-known fast track arbitration cases to date were directed under the rules issued by the International Chamber of Commerce. Even though Article 32 of the ICC Rules commonly offers for expedited procedures by conceding the parties the chance to shorten various time limits set out in these rules, the ICC Rules do not comprehend supplementary exhaustive procedures in this regard. Moreover, parties may move themselves onto a “fast track” by postulating particular time limits for each phase of an ad-hoc proceeding, or by stipulating a deadline for any award, either in the arbitration clause or in a later agreement.


  1. VARIOUS FACETS OF A FAST-TRACK ARBITRATION

Fast track arbitration is made up of a defined set of pieces, it comprises a variety of expedited methods. However, there are a number of procedural options that, when used in various combinations, create recognised parts of fast-track arbitrations.

  1. It is primarily governed by strict time-limit policies that must be followed by both the arbitrators and the parties. This simply means expediting the arbitral process and resolving the dispute in the shortest period possible.

  2. Any activity that aids in the determination of the issue as quickly as possible is accepted under fast-track arbitration. It does not include a fixed collection of elements or procedures to be followed as per ordinary arbitral proceedings.

  3. Fast Track Arbitration Procedures frequently do not require oral hearings and rely solely on written submissions.

  4. The parties may choose a single arbitrator, and the submissions must be written in significant part by the parties themselves.

  5. It defends the cost, speed, and time without violating any laws, and it frequently prevents procedures such as witness interviews.


Strict time restrictions are the most important aspect of a fast-track arbitration. These deadlines apply to both the parties and the arbitrators. Parties are typically held to tight deadlines for their respective arbitrator’s recommendation, as well as their filings and preparation for the oral hearing. Meanwhile, the arbitrator’s most significant constraint is a deadline for issuing the award. The minimization of procedural steps is another important feature of a fast-track arbitration. As a result, the most stringent limits on expedited proceedings include constraints on the number of written submissions as well as hearing limitations. Furthermore, without modern communication tools, a fast-track arbitration is unlikely. Communication by email, fax, phone, and video conferences, as well as any other relevant ways of minimising superfluous formality, is a vital aspect in the fast-track arbitration hearings’ significantly reduced duration.


  1. FUNDAMENTALS OF FAST TRACK-ARBITRATION:

Apart from the two most essential aspects of arbitration, speed and cost effectiveness, there are a number of elements of arbitration, as well as fast-track arbitration, that make it a viable option to state jurisdiction. Those fundamentals include;

  1. Independence of the parties

  2. Equity of treatment

  3. Impartiality and Independence of an Arbitrator and

  4. Enforcement of arbitral awards


  • Independence of the parties:

This Arbitration provides the flexibility to the parties in choosing the framework for resolving their dispute based on the facts of the case. The parties are free to choose arbitration as a method of conflict resolution and to create the rules that govern it–from the location of the arbitration and the applicable (substantive and procedural) law to the number of arbitrators and the specifics of the proceedings. It is also a matter of party autonomy whether or not to commit to fast-track arbitration.


Arbitrators may only disregard the parties' choice of substantive and procedural law relevant to the arbitration in only restricted and highly exceptional circumstances. In international arbitration, the arbitrator's decision is guided by the application of transnational principles of private international law, and there is a growing trend toward applying substantive transnational law principles directly to the merits of a case in order to designate the applicable rules of law. The arbitrator's ability to pick the appropriate legislation is essentially limited only by international public policy principles. Under the jura novit curia rule, the judge or arbitrator is expected to actively explore the appropriate foreign law while determining the relevant norms of law in most civil law jurisdictions. Furthermore, foreign law is viewed as a question of fact in common law jurisdictions.

Furthermore, in arbitral processes where the parties anticipate the arbitrator to actively research the law, the parties or the appointing body may be well advised to select an arbitrator with a thorough understanding of the applicable national law. The relevant contents of the applicable law are more likely to be determined in fast-track arbitration based on the submissions of the parties alleging a claim under a specific national law.


In fast-track arbitrations, the rules guiding the proceedings can be established in an arbitration agreement or arbitration clause, or the parties can agree to a set of institutional norms at any point before the arbitration begins. In the absence of enforceable guidance from the parties or applicable institutional standards, the arbitrator has the right–and the obligation–to determine the arbitration rules as he or she sees appropriate. International arbitration institutions have been a helpful source of guidance for arbitrators when it comes to accepting evidence in this regard. While international arbitral tribunals are generally free to admit evidence at their discretion, they must adhere to basic principles of fairness in order for the resulting award to be enforceable.


The decision to use fast-track arbitration will not necessarily be without repercussions in terms of the procedural norms, and hence may have a significant impact on the fact-finding process. Limitations may, however, apply not only to hearings, but also to the categories of evidence accepted in fast-track arbitrations. Also, in fast-track processes, there may be circumstances where the arbitrator directly or tacitly decreases the amount of proof required, or otherwise lessens the plaintiff's burden of proof (by taking into account the limits indicated above).


  • Equity of Treatment:

While fast track arbitration has procedural limits, these limitations must not detract from the parties' equal treatment. It would be a mistake to presume that the parties who consented to fast-track arbitration also agreed to have their procedural rights limited. The notion of giving each party a reasonable amount of time to make their case is both basic and obligatory. As a result, under the fast-track arbitration, due process and procedural fairness are two features of equitable treatment.


The extent to which due process rights are observed in a fast-track arbitration is largely determined by the facts of the case. For example, the parties' pleadings should be made available to their opponents early enough to allow them to respond; arbitrator orders regarding future procedures or deadline extensions in favour of one party should be communicated promptly; and the parties should be given an equal opportunity to comment on proffered evidence. Of course, the parties' choice of an accelerated dispute resolution procedure must be taken into account when determining what constitutes "adequate time" in a fast-track arbitration.


The time constraints established in accelerated processes also diminish the amount of time the arbitrator has to make a decision. However, because of the unique nature of accelerated procedures, it is not commonplace to forego the necessity of a reasoned award in order to save even more time. When it comes to procedural fairness, it is sometimes characterised in subjective terms and reflects a party's position in a certain case. In most fast-track cases, however, it will not be unreasonable to refuse multiple days of hearings, a large number of witnesses, or extensive arguments in order to save time and money. Nonetheless, it is critical to guarantee that each party has enough time to react properly to its opponent's evidentiary presentations. Even in circumstances when fast-track arbitration is a feasible means of dispute settlement, a state court's support for the implementation of such an award requires adherence to a minimal degree of due process.

  • Arbitrator’s independence

An impartiality as well as independence arbitrator is the core element of the fast-track arbitration. The achievement of the aim of such arbitration proceedings will depend on the arbitrator’s ability to make the assessment of the parties through an unbiased and systematic procedure. At first, the parties should mutually appoint an independent arbitrator for avoiding the difficulty in appointing an alternative arbitrator in case of arbitrariness due to the available time restrictions.

  • Enforceability

The decisions made in fast-track proceeding is only valuable when its enforceability is ensured. The expeditious disposal of a dispute offers several benefits to the parties. Thus, arbitrators in fast-track arbitration must bind themselves by the above-mentioned fundamentals to ensure that the award rendered can be easily enforced. But the failure to comply with these fundamentals may cause an arbitral award to be set aside under the applicable national law or may otherwise constitute a ground for the refusal of award enforcement.


The enforcement of a fast-track arbitral award is generally governed by the Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It is commonly known as the New York Convention 1958. The grounds for refusal of a fast-track arbitral award are provided in Article V of the New York Convention. While Section 1(b) deals with the violation of due process rights, and section 2(b) deals with the public policy issues.


Under International law, the violations of procedural rights as grounds for refusing to recognize and enforce an arbitral award is not generally pleaded before the state courts. The recognition and enforcement of an arbitral award which may be denied at the request of the party against whom it is invoked if the party claiming it was unable to prove his case. Further, Article V, Section 1(b) of the New York Convention provides that the identified violation had a direct influence on the outcome of the arbitral proceedings.


The following procedural defects are considered as grounds for violation of procedural rights by the state courts:

  1. failure to inform a party of the opposing party’s arguments

  2. failure to present substantial document by one party that are submitted to the arbitrator by the other party, and

  3. the subsequent denial of the opportunity given to comment thereupon

  4. the subsequent denial of the opportunity to comment on expert written reports or oral statements.


The State courts don’t consider limitation of the deadline for submissions made by the arbitrator as a ground of violation of procedural rights. The arbitrator can direct that a decision was to be made by a certain date and based on the documents made available up until that date basing an award on certain select arguments rather than all arguments set forth by a party during the proceedings. The enforceability of an arbitral award becomes a bit difficult due to the implicit time limits. Thus, the utmost care is to be given in ensuring that all submissions by one party in the proceedings are presented to the other party.


2. ARBITRAL AWARDS AGAINST THE PUBLIC POLICY

The State Courts may refuse the enforcement of arbitral award if such recognition and enforcement of the award would be contrary to the public policy of that country. The recognition and enforcement of an arbitral award can also be refused if it is given in violation of a legal norm which constitutes the public policy of the State. It can also be rejected by the State Courts if the arbitral award intolerably contradicts the general principles of justice and equity. However, Article V, Section 2(b) of the New York Convention is rarely being invoked by state courts as a ground for refusal of enforcement.


The consideration of a procedural defect to be against the public policy, necessarily need not to be backed by the legal confirmation. Such recognition and enforcement of the arbitral award must also be intolerable for the domestic legal system itself. Thus, the State Courts consider international arbitral awards to be contrary to public policy of the state for the reasons stated above given under Article V, Section 1(b) of the New York Convention. When the parties had no equal opportunity to comment on an expert report during the arbitration proceedings, it can be treated as a ground of procedural defect against the public policy. Further, rendering of comparatively less reasonable arbitral award by a State Court is not a sufficient ground to refuse recognition and enforcement of an arbitral award in the state where the enforcement was sought did not set out the requirement of a reasoned award.Though, the parties to arbitration should generally claim for a reasonable arbitral award as a prerequisite for enforcement of it by the State Courts.


3. UTILITY OF FAST-TRACK ARBITRATION

Fast-track arbitration is well-known for ensuring a super-quick resolution of the dispute between the parties. As a result, receiving an award within weeks or three to six months of the start of the proceedings is far faster than a typical or traditional arbitration process. Though the above-mentioned merit can only be accomplished via better collaboration between the parties. With their disciplined efforts of systematic written pleadings, both the parties and the arbitrators can make the arbitration more effective and time-efficient.


An issue concerning the arbitral the paint of Formula One racing vehicles came up before the arbitral tribunal in one of the most prominent cases of Formula One racing under the ICC Rules. In this case, both parties cooperated fully in the arbitration procedure. The parties did, in fact, exchange submissions at seven-day intervals. Thus, the arbitral tribunal also formulated its arbitral award within 48 hours of the hearing.


The concentration of material questions and evidence is another significant benefit of fast-track arbitration. As a result, exchanging lengthy briefs, holding protracted pleadings, or emphasising lengthy arguments is strongly discouraged. As a result, both the arbitrators and the parties must use their minds wisely in order to craft sharp arguments for the hearing. However, in a well-organized fast track arbitration case, there may be little opportunities for delay. However, the time restriction might be extended by the parties themselves if they agree. As a result, fast track arbitration leads to a quick and agreeable conclusion. Though it is unlikely to work in every contentious arbitration case.


Furthermore, if the fast-track proceedings are properly structured, they may result in increased party autonomy. As a result, the parties have complete control over the course and duration of the proceedings in order to achieve their long-term goals through fast-track arbitration.

However, the reality is that many parties do not choose fast track arbitration as their first option. When a party is too tired or reluctant to study the specific rules or processes in the event of a dispute, they often insert an arbitration clause.

Furthermore, parties can exert more control over the course of fast-track processes. Similarly, the right to be heard or the issue of due process may be influenced by the parties' actions. Interim measures are not required under the fast-track arbitration. This is because the arbitration must be completed quickly, and interim awards are frequently appealed, leading to a web-series number of cases. As a result, a fast-track arbitration ruling is a conclusion in and of itself, requiring no further legal action. Interim awards are likely to provoke a legal challenge, effectively undermining the fast-track process. As a result of the lack of oral hearings, fewer submissions, this method becomes more efficient for both the parties. Fast track arbitration, on the other hand, may not be as cost-effective as it appears if it is not handled with care.


4. EFFICIENCY OF THE FAST-TRACK ARBITRATION DURING THE PANDEMIC

Fast track arbitration, as an alternative dispute resolution method, has changed the dynamics of commercial dispute settlement and is preferred by parties for several reasons, including the flexibility to determine procedures, fixed time restrictions, cost efficiency, and confidentiality, among others. Covid-19 has disrupted typical court procedures, forcing practitioners to seek for other, more efficient methods of resolving disputes. Parties who previously refused to consent to arbitration are increasingly accepting to settle their issues through mediation or arbitration.


Fast track arbitration looks to have higher assimilation skills with technology when compared to traditional litigation, owing to intrinsic party autonomy and freedom in deciding the leading procedures. When this tech-integration capability is considered, it is clear that the adoption and continuous reliance on arbitration as an alternative and effective means of dispute resolution has increased. Covid-19 and the resulting social-distancing measures have compelled disputing parties to implement and conduct arbitration proceedings remotely. Under normal circumstances, in-person hearings establish the general rule; but, because to Covid-19, this is currently not possible. As a result, typical courts and other judicial and quasi-judicial venues are increasingly relying on video-conferencing platforms to resolve ongoing cases. While it is encouraging to see the long-overdue shift toward the use of technology in conflict resolution, there are several problems and issues that continue to stymie this necessary transformation. When compared to pre-Covid-19 times, Covid-19 has increased the regularity of virtual arbitrations. It would also be a practical solution for litigants seeking redress during the COVID – 19 pandemics, when courts are unable to conduct normal hearings and are overburdened by the pending litigation of several cases.


CONCLUSION

Fast Track Arbitration is legally proven to be way efficient resort rather than just fast modern hack of dispute resolution. We live in the techno-world where every second has its value and even one minute wasted is a lost for a business. Thus, Fast Track Arbitration can lead the way through and create a path for technologically-savvy modes of resolving disputes. Fast Track proceeding is the one of the best methods to be opt for speedy disposal of the disputes. It subsequently cut downs the case costs and also, helps in maintaining amicable relations between the parties. Though the future of fast track proceeding greatly depends upon the cooperation of the parties and the arbitrator as well. Though, Fast Track arbitration should be preferred when the quantum of dispute is smaller compared to cost of dispute resolution.


Nowadays, the parties tend to submit voluminous documents with attachments to the arbitrators far in excess of the amount of material they would produce before the court of law. Also, the parties tend to make repeated requests for time extensions in a strategic effort to delay the proceedings. But such efforts are just a throw of an arrow in the dark that paves unnecessary delay for a decision of the case.


Thereby, it is a high time to do away with the Court formalities, physical hearings or unnecessary procedural ceremonies to dispose of no. of ever-pending cases of arbitration. So, fast track proceedings must be encouraged by both the disputed parties and the arbitral tribunal. If the Fast-track proceedings are organised professionally by all participants involved, there cannot be any reason to considered it as a less efficient and fair dispute settlement procedure. Therefore, there is a general and collective urge to encourage the fast-track arbitration throughout the globe in these times of crisis.