This article has been written by Shubham Jadia, a student of Indore Institute of Law

Introduction 

INTRODUCTION 

Knowledge  of  history  makes  one  very  cautious  about  proclaiming  a revolution  in  international  commercial  dispute  resolution.  The  difficulty and  the  efficiency  (both  in  time  and  money)  of  resolving  international commercial  disputes  have been  persistent  and  universal. Numerous  new  ideas  have  been  suggested, and  yet no  effective solution  has been  found. However,  with  the  impact  made  internationally  by  fast-track  arbitration over the last two  decades,  it  is  greatly tempting to think that something in the  nature  of a revolution  might  be  taking place.  Without  a doubt,  some-thing quite significant is happening.

The  Historical  Development  of  Fast-Track  Arbitration  in  the  Asia-Pacific Region 

In  the  resolution  of  international commercial  disputes everyone  agrees that courts simply  aren’t  an  option  because parties cannot take a judgement from one national court to foreign one and expects  to have it easily enforced, whereas an  international  arbitration award  is immediately  recognized  as  an enforceable  binding  decision. So international  arbitration  has  become  more or less a monopoly in the resolution of international commercial disputes.

Most will be  familiar  with the way that international commercial  arbitration  developed  as a  reaction  to the excessive  cost  and  delay associated with litigation. The principal reasons for the increase in popularity were the globalization of trade in  the  20th  century and the fact  that  arbitral  awards could be easily and efficiently enforced under the NYC. Being in essence a private enterprise counterpart to the court system, the NYC was initially met with  suspicion  by  the  courts,  which  refused  to  enforce  arbitration  agreements, viewing them as  ousters  of  the  court’s  jurisdiction and as such void for public policy reasons. However, this suspicion dissipated, and national arbitration  laws  were  introduced  governing  and  supporting  arbitration.8 International and regional arbitration organizations have also flourished that resulted  in  institutional  arbitration  culture  both  domestically  and  internationally  for  the resolution  commercial  disputes.

However,  initially  this  establishment  came an  increasing  tendency  to mimic court procedure,  so  that international commercial arbitration ceased to be perceived as a cheaper,  more  efficient  alternative  to  litigation. Whilst accepting the significant position of international commercial  arbitration, it soon  fell  behind  the  pace of  the fast-moving  world  of  international com-merce in at least two respects: speed and cost-efficiency.

Fast-track  arbitrations  was one  of  those revisions,  which  started  with the implementation  of  expedited  procedures under  CITEAC  Rules  in 1994 and  followed  by  other  Asia-pacific  arbitration  centers.13 It is commonly known as  fast-track  procedure,  expedited  arbitration, lean management  or accelerated proceedings. In China, this kind of proceedings called Summary Procedures under CIETAC Arbitration Rules.

Fast-track Procedures and the quest for efficient dispute resolution process 

Fast-track Arbitration is a method of binding dispute resolution distinct from litigation and mediation and a sub-system of ordinary arbitration. The process is accelerated with the swift establishment of the sole arbitral tribunal, shorter time limits and procedural limitations to ensure speed and cost-efficiency  in  resolving  international  commercial  disputes.

Fast-track  procedures  are  relatively recent developments  in  the  ongoing quest by commercial parties for  faster,  cheaper  and  more  efficient  dispute  resolution  process.  This  is because resolving disputes using ordinary arbitration procedures have not proven to be efficient as parties expects.

The Scope of Application for Fast-Track Arbitration Rules 

There  are  two  different  approaches  for  the  applicability  of  fast-track procedures: 

1) Opt –out and 

2) Opt – in. 

This division is a direct result of the arbitration centers’ effort  to  develop  and incorporate fast-track  procedures in the arbitration clause. Arbitral institutions have devoted significant pre-contract planning and established dispute-filtering methods tailored to ad-dress disputes by type and size.

Opt-out Approach 

Opt-out approach is  a  product  of  Swiss Chambers  Arbitration  institutions who  has  first  introduced the automatic  application  of  fast-track arbitration  below certain  monetary  threshold.  The  CIETAC  incorporated and modified these rules in 1994.20 Initially the monetary threshold was law but the  2012  CIETAC Rules  has increased  it  from RMB500,000  (Approx.  USD 80,000) to RMB2,000,000  (Approx.  USD 320,000).

Opt-in Approach 

Opt-in  approach  to  fast-track  procedures  necessitates  explicit  agreement to fast-track arbitration either in their arbitration clause when signing the substantial contract or in the submission agreement when initiating fast-track  arbitration.  There  is  no  monetary threshold in respect of the sum in dispute  for  an  automatic  application  of  such  rules.  Almost  all  arbitration rules accept parties’ agreement when they opt for fast-track procedures.

Fast-Track Arbitration Rules 

Following is a list of fast-track arbitration rules that have been adopted by arbitration institutions. One interesting feature of these rules is that the degree  of  independence over  ordinary  arbitration rules  divides  them into three  different  types. 

Therefore,  in  addition  to  opt-in  and  opt-out  approaches, fast-track arbitration rules broadly  fall  into  the  following categories: 

1) Stand Alone Fast Track Arbitration Rules (Separate) 

2) Semi Separate Fast Track Arbitration Rules (Quasi-Separate) 

3) Implicit Fast Track Arbitration Rules (Non-Separate).

Stand Alone Fast Track Arbitration Rules (Separate Rules-Opt-in Approach)

There  are  nine stand-alone  fast-track  arbitration rules  available  in re-solving  international  commercial disputes.  Three  of  these  are  offered  in  the  Asia-pacific  arbitration centers:  

(1)  the Expedited  Rules  of Arbitration  (2010)  of  the  Australian  Centre  for  International  Commercial  Arbitration (“ACICA”)

(2) the Fast  Track  Rules  (2010) of the Kuala Lumpur Regional  Centre for Arbitration  (“KLRCA”)

(3)  Fast  Track  Arbitration Rules of  the  (2007) the Institute of Arbitrators and Mediators Australia (“IAMA”).

Semi-Separate Fast Track Arbitration Rules (Opt out) 

There are  twelve semi-separate or supplementary fast-track arbitration rules expressly insert a chapter, or rules for fast track procedures within the conventional institutional arbitration rules. These are not separate because ordinary arbitration rules remain  applicable  to  proceedings  conducted under these  kinds  of  fast-track procedures.  Also  it  is always  possible  to shift from fast-track procedures to ordinary arbitral procedures when particularities of current disputes make it necessary.

In  the  Asia-pacific  region,  five  arbitration  organizations  offer  semi-separate fast-track rules: 

(1) The Summary Procedures (1994) of the Arbitration  Rules  of  the  China  International  Economic  and  Trade  Arbitration Commission  (“CIETAC”) was  the  first  arbitration  organization  that  offered fast-track arbitration in the region. 

(2) This is followed with the Expedited Procedures of  the  Commercial  Arbitration Rules (1997)  of  The  Japan Commercial Arbitration Association (“JCAA”), 

(3) Article 38 of Administered  Arbitration  Rules  (2008)  of  the  Council  of  the  Hong  Kong  International Arbitration  Centre (“HKIAC”) 

(4) Article  5 of the International  Arbitration  Rules  (2010)  of  the  Singapore  International  Arbitration  Centre (“SIAC”) and  

(5) Articles 38-44 of  the Rules (2011) of  International Arbitration of the Korean Commercial Arbitration Board (“KCAB”).

Implicit Fast Track Arbitration Rules 

Some arbitration institutions imply the possibility fast track arbitration procedures  in  the realm  of their  ordinary  arbitration rules  but  they  don’t expressly offer fast-track arbitration procedures. Article 38 of the 2012 Arbitration  Rules  of  the  International  Chambers  of  Commerce  (“ICC”)  is  the prominent example of this kind. It only provides a mechanism for parties in regular arbitration  to opt for shorter  time limits.

Since fast-track  arbitration  under  the  LCIA and  ICC  require  an  agreement in writing by the parties, the  result  would  be  similar  to  the  adoption by  the  parties  of  expedited  procedure  rules  once  the  dispute  has  arisen.

After a dispute, parties often unable to settle a fast-track dispute resolution process, so  that efficient institutional supervision makes  the difference both in the swift establishment of an arbitral tribunal and in the administration of expedited procedural rules.

Characteristics of Fast-track Procedures Fast-track arbitration rules differ from ordinary arbitration rules in five main  respects;  

(1)  Swift  Appointment of  a  Sole arbitral  Tribunal  

(2)  Time Limits  and  Overall Time  Frame  

(3)  Limitations  on  type of  Procedures  

(4) Submission of evidence, witness testimony and discovery; and 

(5) Fees and Costs 

1. Swift Appointment of a Sole Arbitrator as a Default Rule 

There is much to be said for the number of arbitrators and the length of the  periods  of  time  for  their  appointment.  It  often  takes  four  months  or more to form a three-person tribunal in a substantial case. Indeed, it is not easy to vet arbitrator candidates, particularly in an international commercial case, but it is a procedure that can be expedited.

2. Time Limits and Overall Time of Arbitration 

Fast-track procedures offer some form of shortened time periods in order to decrease the total time of arbitration. The approach taken varies from detailed  limits  on  almost  every  stage of  the  arbitration, to  a  single overall time limit, to mere discretionary shortening of the various time limits of the arbitration or for the creation of the arbitral tribunal.

3. Limitations on types of Procedures 

Although time limits provide goals  for  expedited  arbitration,  most  expedited procedures also restrict the types of procedures available at arbitration  to  ensure  that  these  time  limits  can  be  met,  such  as  by  limiting  the number  of  memorials  and  cross  claims,  providing  more  liberal  rules  for service of process or limiting the availability of oral hearings.

4. Submission of Evidence, Witness Testimony and Discovery 

All  of  the  expedited  rules  provide  some  form  of  procedure  for  ex-change of evidence in advance of the hearing, either by rules specific to the expedited arbitration or by reference to the arbitral tribunal’s authority under the regular arbitration rules  but  there  is  no  broader  discovery.

5. Fees and Costs 

Many fast-track arbitration rules correspond to the Standard Rules as to fees and costs. The fee payable to the arbitrator shall, unless the parties and the  arbitrator  agree  otherwise,  be determined  within a  range  set  out  in a schedule of fees issued by  the arbitration centers. Subject to any agreement between the parties, the tribunal  shall  apportion  the  cost  of  the arbitration and the registration and administration fees between the parties in the light of  all  the  circumstances.

CONCLUSION

Overall, because there is no real statistical evidence to consider, it could be suggested that some of the perception of fast-track arbitration is  the  result of literature promoting its use. Without research to  quantify  fast-track arbitration in  terms  of its  effectiveness,  it is  difficult  to  displace these  attitudes or assess whether they are justified. That  said,  the  recent  popularity  of  institutional  fast-track  arbitration rules indicates a growing concern for efficient dispute resolution. It is possible that fast-track arbitration may play a  bigger role in the resolution of future disputes.

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