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).

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