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Efficiency vs. Due Process Paranoia

Efficiency vs. Due Process Paranoia

What can arbitrators, institutions and users do to increase the efficiency of arbitral proceedings? How tough can arbitrators be in rejecting extensions or denying applications for further submissions for the sake of efficiency? How fast can it get, and is there a “too fast” – a point at which efficiency comes at the cost of the parties’ due process rights?

These questions were among the topics of discussion at January 19 event on expedited arbitration and due process paranoia, hosted by the Swedish Arbitration Association. On the panel were Swedish Supreme Court Justice Lars Edlund, ICC Deputy Counsel Hjördís Birna Hjartardóttir, Eva Kalnina from Lévy Kaufmann-Kohler in Geneva, and SCC Legal Counsel Anja Ipp. A lively discussion centered on how to achieve the balance between efficiency and expediency one the one hand, and party autonomy and due process on the other.

The panellists agreed that awards very rarely are set aside or denied enforcement because the tribunal had violated the parties’ due process rights—meaning the right to an equal and reasonable opportunity to present one’s case. Courts in most jurisdictions typically defer to arbitrators’ discretion when reviewing procedural decisions. Yet it is generally recognized that arbitrators are hesitant to say no when parties make procedural requests that counteract efficiency. This “due process paranoia” leads arbitrators to grant parties’ additional time, accepting belated introduction of new claims or defences, or holding unnecessarily long hearings—even where doing so is against the principle of efficiency enshrined in the arbitral rules. For more on this topic, see this article in Arbitration International.

The 2017 amendments to the SCC Expedited Rules were in large part motivated by user demands to make the expedited arbitral procedure more efficient. The main revisions are summarized here. Since the revised rules went into force, the duration of expedited proceedings has significantly decreased. In 2018, 56% of awards in expedited cases were rendered within 3 months, and 97% within 6 months (preliminary statistics).

Revised SCC model arbitration clause for continued use with the ISDA 2002 Master Agreement

Revised SCC model arbitration clause for continued use with the ISDA 2002 Master Agreement

The revised SCC-ISDA model clause, facilitating the use of arbitration as a recommendable dispute resolution alternative by banks and financial institutions, is included in the updated 2018 ISDA Arbitration Guide. This guide supersedes the earlier (2013) version.

The original clause was drafted in co-operation with the Swedish law firms Gernandt & Danielsson and Mannheimer Swartling and the revised clause has been reviewed by the trade organization the International Swaps and Derivatives Association (ISDA).

The updated SCC-ISDA model arbitration clause is available for use with the ISDA 2002 Master Agreement; a widely used form of master contract for over-the-counter derivatives transactions.

 

See 2018 ISDA Arbitration Guide

SCC in Moscow: Arbitration in Stockholm – an Update on the Swedish Arbitration Reform

SCC in Moscow: Arbitration in Stockholm – an Update on the Swedish Arbitration Reform

On 13 February 2019, the Embassy of Sweden in Moscow and the SCC welcomes to a seminar about arbitration in Stockholm.

 In November 2018, the Swedish legislature passed a revised Arbitration Act, intended to make arbitration in Sweden yet more efficient. During the seminar, Swedish and Russian experts will introduce the audience to the legal and practical aspects of arbitration, and present the important legislative changes that will enter into effect on 1 March 2019.

The seminar is a must-attend event for Russian legal practitioners and corporate counsel who want to learn more about the Swedish arbitration landscape.

Date:           13 February 2019
Time:           14.30-17.00, reception hosted by the Ambassador follows
Venue:        Mosfilmovskaja 60, Moscow, Embassy of Sweden in the Russian Federation
Language:   English (without translation)


The seminar is free of charge. Attendance by confirmation only.
For additional information and registration please contact Ms. Ekaterina Alexeeva, ekaterina.alexeeva@gov.se

Read invitation here

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