Worldwide: Would A Summary Procedure Improve The Arbitral Process?

Last Updated: 3 March 2017
Article by Peter Hirst

With high cost and inefficiency top of the list of party concerns about the arbitral process, institutions, arbitrators, practitioners and indeed legislators are keen to find ways to address those concerns. One proposed solution is the availability of a summary procedure to 'cut through' elements of the arbitration process saving both time and money. This is of particular interest where, for example, arbitration involves an element of debt recovery or where sham defences may be used tactically to prolong an unmeritorious dispute.

Summary procedures in litigation

Summary procedure, namely summary judgment, is a key part of the litigation process, and, as such has a proven track record of working as a dispute resolution tool. In the English Courts, under the Civil Procedure Rules (CPR 24), summary judgment is available where:

  • the court considers the claimant has no real prospect of succeeding on, or the defendant has no real prospect of successfully defending, the claim or issue; and
  • there is no other compelling reason why the case or issue should be dealt with at trial.

Summary judgment can be granted on part of a claim and will only be granted in the 'clearest case' or in a 'plain and obvious case' (S v Gloucestershire CC, Esprit v Fashion Gossip). The court's decision will usually be made on the basis of witness and other evidence provided with the application and defence to the application. While a hearing will often take place, applications for summary judgment should be so 'clear cut' that the formalities of running a full case to trial are unnecessary. There is a body of case law for parties to rely on when making or defending such an application.

So, could arbitration follow the court's lead and use a summary procedure to resolve all or part of a dispute?

SCC summary procedure

The Stockholm Chamber of Commerce's (SCC) revised arbitration rules (in force 1 January 2017) introduce a summary procedure.

Under Article 39, a party may request that the tribunal decide one or more issues of fact or law by way of summary procedure without necessarily undertaking every procedural step that might otherwise be adopted for the arbitration. The request may for example include that:

  • an allegation of fact or law material to the outcome of the case is manifestly unsustainable;
  • even if the facts alleged by the other party are assumed to be true, no award could be rendered in favour of that party under the applicable law; and
  • any issue of fact or law material to the outcome of the case is, for any other reason, suitable to determination by way of summary procedure.

This is clearly and understandably given the nature of arbitration, less prescriptive that the provisions of the Civil Procedure Rules and gives scope to the arbitrators to act in the interests of the efficient and expeditious resolution of the dispute.

One aspect that will be interesting to watch (though this may be difficult due to awards not being published) is the interpretation of the new rule by arbitrators. In particular, the influence of their background on their approach to where the summary procedure is appropriate. It would not be unreasonable to think that, for example, an English QC would rely on their previous experience of the test for summary judgment whereas an arbitrator from another jurisdiction would have a different yet equally legitimate approach.

The SCC is not the first institution to take this step. In its rule revision in 2016 the Singapore International Arbitration Centre (SIAC) also introduced a procedure for the summary disposal of claims (Article 29) where the claim is manifestly without legal merit or manifestly outside the jurisdiction of the tribunal. It is not known whether this rule has been well-used by parties or tribunals.

Existing powers

Arguably, and potentially controversially, the power to adopt a summary procedure to decide a matter in an expeditious manner is already available to tribunals in their case management powers. For example, the ICC Rules provide that the tribunal and the parties shall make every effort to conduct the arbitration in an expeditious and cost-effective manner, having regard to the complexity and value of the dispute (Article 22). Further, in respect of curtailing procedures: 'the tribunal shall proceed within as short a time as possible to establish the facts of the case by all appropriate means'. Therefore, though not specifically stated, the tribunal arguably has the power to determine the dispute in the most expeditious way possible, including in summary form.

This all said, tribunals are understandably keen to provide an award which is not challenged. To adopt a summary procedure without explicit authority to do so could open the award up to a challenge and thereby undermine the finality of the process. This can also be seen in tribunals' reluctance to order a trial of preliminary issues (arguably another procedure which could be used to streamline the arbitral process) where the parties don't agree. Much has been written recently about 'due process paranoia' and tribunal's failure to make robust procedural decisions – without a specific summary procedure such as that in the forthcoming SCC rules making such a ruling seems more understandable caution than paranoia.

Arbitration Act 1996 reform

With the Arbitration Act 1996 potentially facing reform, is a summary procedure likely to be introduced?

With the SIAC rule being relatively new and the SCC rules not yet in force (the new rule therefore untested) this is a difficult question to answer at this stage. If successful, it is likely that other institutions will adopt a similar rule over the coming years which would then enable the process to be 'tested' before being introduced into legislation (such testing of course most likely including being tested by courts on appeal). The question then would be whether the legislature leans towards a prescribed list of when a summary decision should be made like that in the CPR, or, a more 'suggested situations' approach with the Act containing example grounds for a summary application, more akin to the SCC rules. The answer may lie in the middle and with the benefit of learning from SIAC, the SCC and any other institutions that follow in their footsteps.

Saving time and bringing down costs are key drivers behind reform but a 'race to the bottom' must not be entered into. The reliability and reputation of arbitration as a dispute resolution mechanism must be upheld. Having experienced 'quick fire' 90 day arbitration it is clear that truncated, direct proceedings can work without compromising the integrity of the process. We watch with interest the SCC's new time and cost-saving procedure to see whether it can uphold and indeed enhance this important dispute resolution tool.

Would A Summary Procedure Improve The Arbitral Process?

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