The field of international arbitration is dynamic by nature. Its hallmarks of flexibility and party autonomy allow it to develop and adapt in response to the needs of its users. Recent times have seen an increased focus on drivers of change such as diversity, technology, environmental considerations and information security. The COVID-19 pandemic has also presented challenges to the way in which the international arbitration community interacts.
The 2021 International Arbitration Survey, titled 'Adapting arbitration to a changing world,' explores how international arbitration has adapted to these changing demands and circumstances. The survey investigates trends in user preferences and perceptions, and identifies opportunities for international arbitration to adapt more and better. This edition saw the widest-ever pool of respondents, with 1218 questionnaire responses received and 198 interviews conducted. Views were sought from a diverse pool of participants in the international arbitration sphere, including in-house counsel from both public and private sectors, arbitrators, private practitioners, representatives of arbitral institutions and trade associations, academics, experts and third-party funders.
White & Case is proud once again to have partnered with the School of International Arbitration. The School has produced a study which provides valuable insights into how international arbitration has adapted, and what more needs to be done by and for its diverse stakeholders. I am confident that this survey will be welcomed by the international arbitration community.
We thank Norah Gallagher and Dr Maria Fanou (White & Case Postdoctoral Research Fellow in International Arbitration) for their exceptional work, and all those who generously contributed their time and knowledge to this study.
Abby Cohen Smutny
Global Head of International Arbitration Practice Group
White & Case
It is with a sense of relief that I present the 2021 International Arbitration Survey on 'Adapting arbitration to a changing world'. In fact, that is exactly what happened just after we started work on the draft questionnaire in early 2020—the world changed due to COVID-19. We could not have known at that time quite how big an impact the pandemic would have globally. In such uncertain times, we had to postpone the launch of the survey for several months. We had no way to assess how long we should wait to start and how it might impact on the survey results.
The strength of the survey is entirely based on the level of participation by the arbitration community. It was an anxious time to see whether COVID-19 would adversely impact the numbers. I was truly grateful for the support of the international arbitration community as the largest number of people ever completed the survey—more than 1,200. Dr Fanou also interviewed almost 200 candidates from 29 countries to provide nuance and context for some of the findings. We thank all of the respondents for making this survey so comprehensive—a true success despite the pandemic.
This is the 12th empirical survey conducted by the School of International Arbitration at Queen Mary University of London and the fifth in partnership with White & Case LLP. The results reflect an interesting snapshot of change in arbitral practice during a time of global upheaval. The arbitration community had to adapt quickly, and some of these changes will remain after the pandemic recedes. Virtual hearings and increased reliance on technology are clear examples of changes that will persist. It has been a challenging yet rewarding process, but we are pleased with the interesting results.
This survey may also prompt further discussion on future changes to arbitral practice and procedural rules.
Norah Gallagher
Deputy Director, School of International Arbitration, Centre for Commercial Law Studies,
Queen Mary University of London
Current choices and future adaptations
Diversity on arbitral tribunals: What's the prognosis?
Use of technology: The virtual reality
Sustainability and information security: Opportunities and challenges
International arbitration is the preferred method of resolving cross-border disputes, with London, Singapore, Hong Kong, Paris and Geneva topping the list as the most preferred seats for arbitration. ICC, SIAC, HKIAC, LCIA and CIETAC were named as the top five arbitral institutions.
Undoubtedly, progress has been made in terms of gender diversity on arbitral tribunals over the past three years. But despite the increased focus on diversity issues and initiatives, respondents clearly feel that this has not as yet translated into actual or sufficient positive change.
While technology in the practice of international arbitration has become increasingly commonplace, particularly when it boosts efficiency, the adoption of AI still lags behind other forms of IT. It is also seen as the factor most expected to influence the future evolution of international arbitration.
There has been increased focus on the environmental impact of international arbitration in recent years. Reducing the environmental impact of international arbitration is a serious objective but how 'green' are arbitration users willing to go in practice?
The School of International Arbitration of Queen Mary University of London would like to thank White & Case LLP for its financial support and substantive assistance, in particular Mona Wright and Clare Connellan, both in London, who coordinated the project on behalf of White & Case and provided invaluable input. We are also grateful for the guidance of Sheena Sarkar (Paris), Jonathan Brierley (London), Fiona Candy (Paris), Melody Chan (Hong Kong), Jorge Mattamouros (Houston), Alexandre Mazuranic (Geneva), Damien Nyer (New York), Petr Polasek (Washington, DC), Aditya Singh (Singapore), and the White & Case Business Development and Creative Services teams in London, Paris, and Moscow.
We would further like to thank our external Focus Group for their generous and valued feedback on the questionnaire and methodology, including (in alphabetical order): Dr Mohamed S Abdel Wahab (CRCICA, Zulficar Partners), Olivier André (Freshfields, formerly CPR), Diana Bayzakova (TIAC), Domenico di Pietro (BCLP), Artem Doudko (Osborne Clarke), Geraldine Fischer (ICSID), Eric Franco (Engie Peru), Manuel Gonçalves (MG Advogados), Professor Silvina González Napolitano (Faculty of Law, University of Buenos Aires), Joe Liu (HKIAC), Mark Luz (Global Affairs Canada), Annette Magnusson (Climate Change Counsel, formerly SCC), Luis M. Martinez (ICDR-AAA), Kevin Nash (SIAC), Dr Emilia Onyema (SOAS), Maria Irene Perruccio (Webuild Group SpA), Professor Peter Sester (CAM CCBC), Olasupo Shasore SAN (Lagos Court of Arbitration), Tulio Toledo (PCA), and Dr Jacomjin van Haersolte-van Hof (LCIA).
We are also grateful for the assistance of several organisations and individuals who helped promote the questionnaire, in particular: Kluwer Arbitration, Transnational Dispute Management/OGEMID, Global Arbitration Review, Thomson Reuters, LexisNexis, Professor Stavros Brekoulakis, Dr Rémy Gerbay and Professor Loukas Mistelis.
Most importantly, we would like to thank all stakeholders (private practitioners, arbitrators, in-house counsel, academics, third-party funders, government officials and other respondents) who generously gave their time in completing the questionnaire and/or being interviewed.
International arbitration is a complex and evolving field of law, and the need for deeply knowledgeable legal counsel is paramount.
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International arbitration is the preferred method of resolving cross-border disputes, with London, Singapore, Hong Kong, Paris and Geneva topping the list as the most preferred seats for arbitration. ICC, SIAC, HKIAC, LCIA and CIETAC were named as the top five arbitral institutions.
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We asked respondents what their preferred method of resolving cross-border disputes would be post COVID-19. Respondents were asked to choose one of five options: 'international arbitration together with ADR', 'cross-border litigation together with ADR', 'international arbitration' as a standalone option, 'ADR only', and 'cross-border litigation' as a standalone option. We clarified that ADR would include, for example, adjudication, dispute boards, expert determination, mediation and negotiation, but exclude litigation and arbitration.
54%
London and, for the first time, Singapore, were the most preferred seats with scores of 54%
In previous surveys by Queen Mary University of London, arbitration, as either a standalone option or in conjunction with ADR, was consistently selected as the preferred dispute resolution mechanism for cross-border disputes.1 This preference was confirmed again in this survey. In particular, an overwhelming majority of the respondent group (90%) showed a clear preference for arbitration as their preferred method of resolving cross-border disputes, either as a standalone method (31%) or in conjunction with ADR (59%). Only an aggregate of 4% is equally split between 'ADR only' and 'cross-border litigation' as standalone options, while 6% indicated a preference for 'cross-border litigation together with ADR'.
This year's findings once again reveal a noticeable increase over recent years in the overall popularity of arbitration used in conjunction with ADR: 59% of respondents expressed their preference for this combination, as opposed to 49% in 2018 and only 34% in 2015.2
While the ‘global powerhouse’ seats continue to be popular, there are many regional seats which are growing in reputation and popularity
These results reflect an ongoing trend, as confirmed in interviews. Although the question expressly referred to the post-COVID-19 landscape, interviewees explained that their answers were not influenced by the pandemic. The factors that influenced their choices remained largely the same. This is why they expected to continue to use the same dispute resolution options as they were using pre-pandemic. As an immediate consequence of the pandemic, respondents referred to an initial feeling of being 'numb'—effectively, a 'procedural paralysis'. Only a few private practitioners observed that their clients were now exploring settlements more willingly than previously.
Generally, interviewees noted that recourse to ADR was in the hope that a swifter and more cost-efficient resolution could be found before resorting to arbitration. In many cases, there is a contractual mandate to use ADR, typically through multi-tiered escalation clauses. Even when there is no contractual requirement to do so, interviewees confirmed a willingness to explore suitable alternatives to resolve disputes. This explains opting for 'arbitration together with ADR' for the purposes of this question as opposed to arbitration as a stand-alone option.
Hong Kong, Paris and Singapore were amongst the top-five preferred seats in all regions
In addition, in certain types of disputes, there are established practices of recourse to other means of dispute resolution; for instance, interviewees with experience in disputes in the construction industry reported positively on the use of disputes boards in that sector. They explained that dispute adjudication and dispute review boards are commonly used in construction projects. In some cases, the contract provides for dispute boards in the form of standing bodies assigned to monitor the projects. Several interviewees noted that, in many instances, they have found dispute boards to be a good, efficient and often cheaper dispute resolution option that helped their clients avoid lengthy and time-consuming arbitrations. Standing dispute boards were also reported to be a useful means of dispute prevention. However, the main concern noted was that the decisions of dispute boards are not generally enforceable. This means that if a decision is not mutually accepted, the parties 'will be back to square one', facing potentially duplicative and costly arbitration proceedings for the same dispute.
To see the change in responses between 2018 and 2021, watch the animation below:
Choice of arbitral seat is a key issue for users of international arbitration. We sought to identify the seats that are most preferred by respondents or their organisations, allowing them to list up to five seats in free-text boxes. Reflecting the global nature of international arbitration, respondents cited more than 90 different seats from a range of jurisdictions around the world.
90+
More than 90 different seats were mentioned in response to the question on seat preference
Notwithstanding the number of choices available to international arbitration users, the top-five preferred seats should not come as a surprise when looking at the results from our previous surveys.3
There has, however, been interesting movement within the top-five rankings. While London once again stands at the top of the charts, for the first time it shares this position with Singapore—each was included in the top-five picks of 54% of the respondents. The rise in popularity of key Asian arbitral hubs demonstrated by Singapore's success is mirrored by Hong Kong, which takes third place (50%). Paris comes in fourth (chosen by 35% of respondents) followed by Geneva in fifth place (13% of respondents).4
Reviewing the findings of our 2015, 2018 and current surveys, it seems that these cities have cemented a dominant position as seats of choice. This is perhaps to be expected given that each of them has a longstanding and recognised reputation as a 'safe seat' for international arbitration.5 Indeed, based on the previous surveys, it was expected that they would continue to be popular. This has been borne out in these latest findings.
There is a growing wish for seats to also have the judicial and/or political facility to adapt quickly to changing user needs, such as the ability to implement technological advances to maintain procedural efficiency and effectiveness
London's continued presence at the top of the table suggests that, as was predicted by the majority of the respondents in our 2018 survey,6 its popularity as a seat has not been significantly impacted (at least so far) by the UK's withdrawal from the European Union. London retains its reputation amongst users as a reliable seat of choice.
What is more striking, however, is the significant percentage gains made by Singapore (54%) and Hong Kong (50%), as compared to our previous surveys. Singapore was the third most frequently chosen seat in 2018, selected by 39% of respondents, and it came in fourth in 2015, chosen by 19% of respondents. Hong Kong took fourth place in 2018, chosen by 28% of respondents, and it was third in 2015, as a seat of choice for 22% of respondents. Interviewees confirmed that these seats are considered safe, obvious choices of established quality. Interestingly, some interviewees mentioned the presence of well-established arbitration institutions, such as SIAC in Singapore, as an additional factor they consider when choosing the seat.7 The growth in popularity of seats in this region year-on-year8 may reflect an increasing willingness by parties with commercial interests linked to that locale to also resolve disputes 'locally'. It will be interesting to see whether large-scale commercial projects, such as the Belt and Road Initiative, will continue to impact this in the future.
The increases enjoyed by these seats may also correlate with a relative reduction in the percentage of respondents who included traditionally dominant European seats, such as London, Paris and Geneva, in their answers. London was selected by 64% of respondents in 2018, making it the most selected that year, but it dropped to 54% in this edition of the survey. Paris fell even further, from its second place showing in 2018, with 53% of respondents including it in their selections, to fourth place this year, as a seat of choice for 35% of respondents. Geneva also retained its position in previous surveys as the fifth most popular seat, but with a dip in the percentage of respondents who included it in their answers—from 26% in 2018 to 13% now.
Interviewees valued the procedural flexibility offered by ad hoc arbitration, which they felt enhanced party autonomy compared to institutional arbitration
Similarly, while the other seats rounding out the top seven in both 2015 and 2018 continue to be seen as safe choices by respondents— namely, New York and Stockholm —seats in other regions have gained in popularity. Beijing joins New York as joint sixth most popular seat, with each chosen by 12% of respondents. Shanghai comes in eighth (8%), with Stockholm dropping from the seventh place it held in previous surveys to ninth place (6%). The top ten is rounded out by Dubai, chosen by 5% of respondents.
Other cities that were each listed by 4% to 2% of respondents included: Zurich; Vienna; Washington, DC; Miami; Shenzhen; São Paolo; Frankfurt; and The Hague.
To see the change in responses between 2018 and 2021, watch the animation below:
76%
The UNCITRAL Arbitration Rules were amongst the most frequently used ad hoc regimes by 76% of respondents
We analysed the results for respondents practising or operating in various regions,9 which revealed a number of fluctuations. London, for example, topped the charts for all regions in our 2018 survey; although it continues to enjoy first place for most regions this time, it was not selected as the most preferred seat for respondents in Asia-Pacific and did not feature at all in the top picks for the Caribbean/Latin America. In Asia-Pacific, both Singapore and Hong Kong surpassed London by a significant margin (more than 20%). Hong Kong, Paris and Singapore were all ranked in the top-five most preferred seats in all regions.
A number of other popular seats reached the top five in several regional subgroups; for example, Geneva was the fourth most preferred seat in Europe, Africa and the Middle East, and fifth in the Caribbean/Latin America.
50+
More than 50 arbitral institutions across the globe were mentioned by respondents
Several seats outside the global top ten did make it to the top ten in the regions in which they are located. In Africa, this was the case with Cairo (12%) and Nairobi (6%); in Asia-Pacific, Shenzhen (4%); in the Caribbean/Latin America, São Paolo (21%), Miami (15%) and Lima (6%). Madrid (5%) also made the top ten for the Caribbean/Latin America. Although it seems that the 'global powerhouse' seats will continue to be popular, there are many regional seats which are growing in reputation and popularity.
More than 90 different seats were mentioned in response to the previous question on seat preference. This shows that although the most popular seats enjoyed the lion's share of the votes, there is still significant scope for seats outside the top ranks to attract users. We asked respondents to indicate what adaptations would make seats more attractive other than those they say they preferred. Respondents could choose up to three options from a list of suggestions, with a free-text 'other' option.
The general reputation of the institution and the respondent's previous experience of that institution are the principal drivers behind choice of arbitral institution
'Greater support for arbitration by local courts and judiciary' was the most selected adaptation (56%), closely followed by 'increased neutrality and impartiality of the local legal system' (54%) and 'better track record in enforcing agreements to arbitrate and arbitral awards' (47%). The other choices ranked as follows: 'ability to enforce decisions of emergency arbitrators or interim measures ordered by arbitral tribunals' (39%), 'ability for local courts to deal remotely with arbitration-related matters' (28%), 'allowing awards to be signed electronically' (14%), 'political stability of the jurisdiction' (9%) and 'third-party funding (non-recourse) permissible in the jurisdiction' (8%).
These adaptations reflect what were already identified as the systemic legal traits of a seat considered to be most important to users.10 This follows a well-trodden path of reasons identified by the respondents in our 2018 survey as the most important when choosing arbitral seats.11 These criteria are seen as long-term markers of quality that determine user preference. They include unhindered access to arbitration promoted by local courts, neutrality and impartiality of the local judiciary, and an enforcement track record.
Once those features are identified in given seats, there may be other factors taken into account by respondents which influence their choice of one seat over another. In particular, there seems to be a growing wish for seats to also have the judicial and/or political facility to adapt quickly to changing user needs, such as the ability to implement technological advances to maintain procedural efficiency and effectiveness (for example, local courts being able to deal remotely with arbitration-related matters). The latter, coupled with the possibility of awards being signed electronically, are issues that were given relatively little attention pre-pandemic. Presumably, in light of recent experience, users are placing more importance on them now.
Administrative/logistical support for virtual hearings is the most important adaptation that would make other arbitral institutions more attractive
We asked respondents which ad hoc procedural regimes they had used most frequently in the past five years. We included a list of choices and a free-text box choice ('other'), allowing respondents to select up to three options. Pre-set choices included: 'bespoke regimes agreed by the parties', 'CPR Non-Administered Arbitration Rules', 'Grain and Feed Trade Association Arbitration Rules',12 'London Maritime Arbitrators' Association (LMAA) Terms', 'national arbitration laws', 'The Construction Industry Model Arbitration Rules', and 'UNCITRAL Arbitration Rules'.
32%
of in-house counsel would like administrative/logistical support for virtual hearings
The UNCITRAL Arbitration Rules, chosen by three-quarters (76%) of respondents, were a clear winner. They were followed by 'national arbitration laws' (28%), 'bespoke regimes agreed by the parties' (26%) and the LMAA Terms (13%). Several interviewees credited the success of the UNCITRAL Arbitration Rules to these rules being carefully designed and widely tested. Others remarked on their prevalence and level of global recognition. This may be because the UNCITRAL Arbitration Rules are used across all sectors in both commercial and investment treaty arbitration.
Interviewees valued the procedural flexibility offered by ad hoc arbitration, which they felt enhanced party autonomy compared to institutional arbitration. This emphasis on party autonomy throughout the arbitral process was a recurring theme in interviews. A number of interviewees also highlighted the popularity of ad hoc arbitration for resolving disputes in sectors such as the maritime industry and commodity markets. As one interviewee specialising in maritime disputes explained, parties want 'a dispute resolution mechanism that was developed by their sector, for their sector, and conducted by practitioners from their sector'.
We asked respondents to indicate their preferred arbitral institutions, allowing them to specify a maximum of five different entries (in free-text form). This generated a list of more than 50 institutions across the globe—a strong indication that while certain institutions are chosen time and again, users also appreciate a wide degree of choice.
32%
of in-house counsel want commitment by institutions to a more diverse pool of arbitrators
Of all the nominations, the ICC stands out as the most preferred institution (57%), followed by SIAC (49%), HKIAC (44%) and the LCIA (39%). These top-four choices have been the market leaders for well over a decade.13 This year, CIETAC (17%) also made it to the top-five most preferred choices for the first time. The other institutions in the global top ten were: ICSID (11%), SCC (7%), ICDR (6%), PCA (5%) and LMAA14 (5%).
Our 2015 and 2018 surveys highlighted a noticeable growth in the percentage of respondents selecting SIAC.15 This trend was clearly confirmed in this survey, with SIAC taking second place overall. There was also a significant increase in the percentage of respondents selecting HKIAC, which took third place.16
The increases enjoyed by SIAC and HKIAC may correlate with a relative reduction in the percentages of the LCIA and the ICC. The LCIA, although it remains amongst the most popular institutions, dropped to fourth place from second place in 2018. The ICC's overall percentage dropped considerably from 77% in 2018 to 57% today.
Interviews confirmed the principal drivers behind choice of institution include the general reputation of the institution and the respondent's previous experience of that institution.17 However, interviewees revealed that in particular circumstances they would widen the list of institutions they might consider. For example, depending on the potential value of a given dispute, practitioners reported that they would be willing to consider less well-known institutions offering competitive fees. The depth and breadth of the pool of arbitrators that might be recommended by an institution was also a factor highlighted by interviewees, as discussed further at pp.11 – 12 below. Some interviewees also mentioned that their perception of the quality and consistency of institutional staff and counsel teams can influence their opinion when considering institutions. While none of these considerations in and of themselves displace the general factors of reputation and recognition of an institution, they suggest that there are multiple distinguishing features which influence the choice of one institution over another.
To see the change in responses between 2018 and 2021, watch the animation below:
An analysis of the subgroups based on the regions where respondents principally practise or operate revealed that the top-three preferred institutions globally also rank highly across most of these regions. The ICC ranks first in all regions except for Asia-Pacific, where it is outranked by the SIAC, which in its turn is also ranked among the first-five choices in all regions. The LCIA ranks second in all regions except for Asia-Pacific.
The use of less widely known institutions or even new entrants to the market can be an effective means of encouraging greater diversity, particularly when those institutions can suggest a different pool of arbitrators
More regionally based variations can be noticed outside the top-five ranks. ICSID and the PCA both enjoyed a consistent showing, appearing in the top-ten rankings of all subgroups. Several other institutions made it to the top ten either in all subgroups (e.g., the SCC) or in almost all subgroups (e.g., the LMAA18). There were also a number of institutions that did not make the top-ten list globally, but that were ranked amongst the top-ten most preferred institutions in the regions in which they were based. These include, for example, VIAC and DIS in Europe, JAMS and the AAA/ICDR in North America, DIAC in the Middle East and the Lagos Court of Arbitration in Africa.19
We asked respondents to indicate what adaptations would make other arbitral institutions or sets of arbitration rules more attractive. A list of indicative choices was offered, together with a free-text 'other' option, from which respondents could choose up to three options. Some of the suggested adaptations related to provisions in arbitral rules (whether used in administered or non-administered arbitrations). Other suggested adaptations concerned the service offered by arbitral institutions and appointing or administering authorities.
60%
of arbitrators and
51%
of in-house counsel favour limiting the length of written submissions
Noticeably, but perhaps unsurprisingly given the pandemic, the top-ranked choice (38%) was 'administrative/logistical support for virtual hearings'. It was followed by 'commitment to a more diverse pool of arbitrators' (32%) and 'transparency of administrative processes and decisions, such as selection of and challenges to arbitrators' (29%). Other options chosen by 25% to 20% of respondents included: 'provision of expedited procedures', 'more tailored procedures for complex and multi-party arbitrations', 'provision for arbitrators to order both virtual and in-person hearings', 'cost sanctions for delay by arbitrators', 'rules giving extensive case management powers to arbitrators including robust sanctions in relation to the behaviour of parties and counsel', and 'provision of secure electronic filing and document-sharing platforms'.
In our 2018 survey, when we asked respondents to indicate the four most important reasons why they prefer given institutions, the results showcased a tendency for users to adopt a 'macro-perspective'. This macro-perspective reflects the main factors that respondents to our 2018 survey identified as the ones that most determine their preference for one institution over another, namely the 'general reputation and recognition' of the institution, its 'high level of administration' and users' 'previous experience of the institution'.20 These factors were more important to users than specific aspects of either the administration of cases by the institutions or their respective rules. The first choice for our current survey ('administrative/logistical support for virtual hearings') is clearly an indication of an emerging need of users due to the pandemic. The need for adaptation in response to changing circumstances is further underlined by the fact that there was also a demand for rules to include a 'provision for arbitrators to order both virtual and in-person hearings' (23%).21
'Commitment to a more diverse pool of arbitrators' (32%) ranked second across the whole respondent pool, but was the joint highest ranked choice of the in-house counsel subgroup. This shows the importance of institutions or appointing authorities in providing a more diverse pool of proficient arbitrators.22
Interestingly, several interviewees highlighted that, depending on the nature and the value of the dispute, they might be willing to use less widely known institutions (such as institutions based in jurisdictions that are emerging as arbitration hubs) or even new entrants to the market. They explained that trusting in such institutions can be an effective means of encouraging greater diversity, particularly when those institutions may be in a position to suggest a different pool of arbitrators. This could include arbitrators who may not as yet enjoy high visibility globally, but who have particular experience of a region, applicable law or industry relevant for a given dispute.
31%
of in-house counsel are willing to exclude document production
'Cost sanctions for delay by arbitrators' and 'rules giving extensive case management powers to arbitrators including robust sanctions in relation to the behaviour of parties and counsel' were each selected by 21% of respondents and reflect, as expanded on in interviews, the desire for faster arbitration proceedings and more flexibility. In relation to the ability of arbitrators to sanction parties and their counsel, several respondents felt that arbitrators are still overly cautious when it comes to 'due process paranoia'.23 As one interviewee stressed, this 'timid' approach leaves clients with a negative perception of arbitration. Others referred to instances of arbitrators failing to adequately address 'guerrilla tactics' by opposing counsel and parties. It appears from this that the real concern is not so much a lack of powers provided for in arbitral rules, but a perceived reluctance by arbitrators to exercise those powers.24 On a related note, one interviewee emphasised the role that institutions can play in improving the quality of arbitrator performance, especially in terms of procedural delay. This can be achieved, the respondent opined, by more transparency as to arbitrators' availability and making available data such as the average time taken to render awards.
Other interesting questions concerned the nature and extent of the services that respondents would like administering entities and institutions to offer. On one hand, respondents have called for more active support in the practical conduct of arbitrations, such as 'administrative/logistical support for virtual hearings' and 'provision of secure electronic filing and document sharing platforms'. On the other hand, several interviewees, many of whom practise as full-time arbitrators, expressed their dissatisfaction with the way in which, in their view, some arbitral institutions have become 'too prescriptive'. Interviewees cited by way of example instances where they considered arbitral institutions to have adopted strong views on matters that are not clearly regulated under their rules, an approach which these respondents considered to be counterproductive to the flexibility of the arbitral proceedings.
View the full PDF: What adaptations would make other institutions or rules more attractive to users?
Time and cost are perennially acknowledged as the biggest concerns for arbitration users.25 We asked respondents to assume the role of a party or counsel and consider, in that context, which of a list of different procedural options they would be willing to forgo if this would make their arbitration cheaper or faster. Respondents could select up to three options from the list, in no order of preference.
With a clear margin of more than 20% over other options, the first choice was 'unlimited length of written submissions' (61%). Interviewees agreed that this was the option that they would feel most comfortable foregoing, as they saw it as a 'safe' choice regardless of the type or profile of the dispute at stake. Interviewees further explained that, in their experience, it has become common practice for parties to submit unnecessarily long briefs. Imposition of page limits was thought most appropriate for certain types of submissions, predominantly post-hearing briefs (as discussed further below). Interestingly, some interviewees felt it is not only the parties who should curb their tendencies in this regard, suggesting that page limits should also be set for arbitral awards, particularly in the context of investor-state disputes.
Respondents stressed the importance of flexibility as a means to aid efficiency and reduce costs
In a related vein, 21% of the respondents would be willing to do without 'post-hearing briefs'. Interviewees revealed a more nuanced view of post-hearing briefs: some explained that they do find post-hearing briefs useful, especially when an oral closing has not taken place during a hearing, but that they work best where the tribunal provides some guidance as to content and imposes page limits. Indeed, imposing page limits on post-hearing briefs was almost unanimously deemed by interviewees as a means to save time and costs. As several respondents noted, counsel should resist the temptation to restate their entire case again when preparing their post-hearing briefs. It was suggested that post-hearing briefs should not simply function as an executive summary of the party's previous submissions, but should instead contain reflections on what has come out of a hearing and offer a roadmap to the tribunal for writing the award. On a similar theme of streamlining written arguments, respondents also indicated a willingness to relinquish 'more than one round of written submissions' (24%).
'Oral hearings on procedural issues' (38%) was the second most popular option that respondents would be willing to forgo. Respondents pointed out that, as procedural issues can arise frequently throughout an arbitration, parties and tribunals should prudently seek to avoid the additional expense and time commitment that oral hearings on procedural issues entail. Fewer respondents would be willing to forgo 'early case management conferences' (16%). Interviewees explained that, in many instances, early case management conferences are useful for resolving procedural issues early on.
'Document production' (27%) was also a popular option to sacrifice. Many interviewees emphasised that document production can be a very costly and time-consuming process. The time and cost involved is often disproportionate to the benefits that a party might hope to derive from the exercise. Others pointed out that although document production makes sense in some cases, in others, it can be tactically misused. Several interviewees also underlined the different expectations that parties from different legal traditions have when it comes to document production. While it might be expected that counsel from civil law traditions would be more inclined to do without document production, it is interesting that many interviewees from common law backgrounds also expressed a willingness to limit document production.
40%
of arbitrators would forgo oral hearings on procedural issues
A quarter of respondents (25%) included 'in-person hearings' as a feature they would be prepared to forgo. This seems to reflect, to some extent, the increased level of comfort users have acquired with remote hearings in recent times, and particularly as a result of logistical difficulties for in-person hearings resulting from the COVID-19 pandemic.26 However, interviews revealed that respondents were more likely to elect this option for hearings on procedural issues, rather than substantive hearings.27
A slightly less frequently chosen option was 'bifurcation', which less than a quarter of respondents (22%) would elect to eliminate. Interviewees felt that whether bifurcation is a means to enhance efficiency or, conversely, whether it leads to more costs and delays depends significantly on the specific circumstances of the case. As such, they were less inclined to agree to exclude the possibility of bifurcation from the outset.
Only a relatively small percentage of respondents (15%) indicated that they would be willing to do without 'cross-examination'. In interviews, respondents expressed a preference for a more nuanced approach to this—for example, they would be more amenable to forgo cross-examination in cases with less complex factual backgrounds and in relation to 'non-key' witnesses. Some respondents thought that a user's legal culture may influence their view, suggesting that civil lawyers might be more willing to forgo cross-examination in certain circumstances.
'Party-appointed experts' was also chosen by a small percentage (13%). There was a split amongst interviewees performing different roles. Some arbitrators took the view that party-appointed experts are sometimes used as 'hired guns' by parties, which is undesirable. On the other hand, several counsel mentioned the also undesirable risk of a tribunal-appointed expert becoming a de facto fourth arbitrator.
A recurring theme in interviews was the sense that arbitration is becoming increasingly over-formalistic, at the expense of efficiency. Interestingly, this view was articulated by arbitrators themselves; as one arbitrator put it, they have seen the development over the years of what they referred to as 'a kind of arbitration-formality' which, taken too far, can amount to 'depriving the parties of the efficiencies they hoped for when they signed the arbitration clause'. One example of this 'arbitration-formality' that several respondents warned against is an excessive tendency to 'mimic court processes'. Respondents stressed the importance of flexibility as a means to aid efficiency and reduce costs by tailoring procedures to the needs of the dispute in question, rather than adopting rigid or excessively formalistic procedures. As one respondent pithily noted, arbitration should stop 'taking itself so seriously'! Closer monitoring of costs may also encourage greater efficiency—one respondent suggested that institutions should introduce costs budgeting rules to help parties and their funders monitor and plan for their potential costs exposure.
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1 2015 International Arbitration Survey, p.5 and 2018 International Arbitration Survey, p.5-6. In the 2018 survey, 97% of respondents chose arbitration as their preferred method of resolving cross-border disputes, either as a stand-alone method (48%) or in conjunction with ADR (49%).
2 2015 International Arbitration Survey, p.5 (Chart 1); 2018 International Survey, p.5 (Chart 1).
3 2015 International Arbitration Survey, p.12 (Chart 8) and 2018 International Arbitration Survey, p.10 (Chart 7).
4 Zurich was also favoured by 4% of respondents, placing it just outside the top ten, showing Switzerland's continuing popularity as an international arbitration centre.
5 See further the discussion at p.8 below on reasons influencing choice of seat.
6 55% of respondents expected Brexit would have no impact on the use of London as a seat (2018 International Arbitration Survey, p.12 (Chart 9)).
7 Our 2015 survey found that factors of convenience, such as the presence in a seat of well regarded arbitration institutions, can increase the attractiveness of the seat once the quality of its formal legal infrastructure has reached a threshold of established quality (2015 International Arbitration Survey, p.16 (Chart 12)).
8 In addition to Hong Kong and Singapore, seats in Mainland China such as Shanghai, Beijing and Shenzen were also nominated by more respondents in this survey than in our previous surveys.
9 These subgroups of respondents reflect the data collected from users who have stated that they principally practise or operate in a particular region, or in a multitude of regions that includes the particular region in which a subgroup is based.
10 2010 International Arbitration Survey, p.17.
11 2018 International Arbitration Survey, p.11, Chart 8. See also 2015 International Arbitration Survey, p.14 (Chart 10) and 2010 International Arbitration Survey, p.18 (Chart 14).
12 GAFTA was included as an option because although it may administer arbitrations under the GAFTA rules, GAFTA does not hold itself out as an arbitral institution. However, arbitrations under the GAFTA rules could be described as administered non-institutional arbitrations rather than being purely ad hoc in the way non-administered arbitrations may be categorised.
13 2006 International Arbitration Survey, p.12; 2010 International Arbitration Survey, p.23 (Chart 17); 2015 International Arbitration Survey, p.17 (Chart 13); 2018 International Arbitration Survey, p.13 (Chart 12).
14 The LMAA stands for the London Maritime Arbitrators Association. The LMAA Terms were listed in our survey questionnaire as an example of ad hoc arbitration rules that may be chosen by users although, erroneously, an inadvertent typographic error there referred to the LMAA as the London Maritime Arbitration Association. The LMAA does not classify itself as an arbitral institution and was not described as such in our questionnaire. Notwithstanding this, it was nominated by a number of respondents in response to the question asking them to name their preferred arbitral institutions. In order to accurately reflect the answers given to this question by these respondents, and to maintain the integrity of the survey data, we have not excluded the nominations for the LMAA from the data set for this question although it is not an arbitral institution.
15 SIAC was chosen by 21% of respondents in 2015, 36% in 2018 and 49% in this survey (2015 International Arbitration Survey, p.17 (Chart 13); 2018 International Arbitration Survey, p.13 (Chart 12)).
16 HKIAC was chosen by 27% of respondents in 2018 and 44% in this survey (2018 International Arbitration Survey, p.13 (Chart 12)).
17 The same factors were highlighted by respondents in our 2015 International Arbitration Survey (p.19 (Chart 15)) and 2018 International Arbitration Survey (p.13-14 (Chart 13). See further below pp.11-12.
18 See note 14 above regarding the nomination by respondents of the LMAA.
19 Our 2015 and 2018 surveys noted a similar trend whereby interviewees often showed preference for an arbitral institution in the region in which they were based, alongside appreciating widely recognised global institutions such as the ICC (2015 International Arbitration Survey, p.17 and 2018 International Arbitration Survey, p.13).
20 2018 International Arbitration Survey, p.14.
21 See also 2018 International Arbitration Survey, p.37-38 (Chart 40) where respondents voiced an expectation for the future evolution of arbitration to be driven by increased efficiency including through technology.
22 See also the discussion at pp.18-19 below in relation to the role played by both counsel and institutions or appointing authorities in promoting more diverse candidates.
23 The phrase 'due process paranoia' was first coined by a respondent to our 2015 survey (2015 International Arbitration Survey p.10).
24 This view was also expressed by interviewees in our 2015 survey (2015 International Arbitration Survey, p.10).
25 In our 2018 survey, for example, time and cost were named as the worst characteristics of arbitration (2018 International Arbitration Survey, p.8), and the wish for greater efficiency was cited as the main driver for the future evolution of arbitration (2018 International Arbitration Survey, pp.37-38).
26 See also the discussion on virtual hearings at pp.22-23 below.
27 See also the discussion at pp.26-27 below on choice of hearing format in the future.
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