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In-house Access Insight & Commentary for In-House Counsel Worldwide

Financial Incentive for Arbitrators to Make Timely Decisions

Posted in Litigation Shorts

Guest blogger: Theresa A. Coetzee is vice president & assistant general counsel at Marriott International, Inc. She is also a publication chair of the ACC Litigation Committee. She can be reached at theresa.coetzee@marriott.com.

In January, I wrote a blog post about resolutions, highlighting US Supreme Court Chief Justice John Roberts Jr.’s request that we heed the intent of the December 2015 amendments to the Federal Rules of Civil Procedure to “engineer a change in our legal culture.” It appears, however, that US litigation isn’t the only dispute resolution process looking to improve in 2016. On January 5, 2016 the International Chamber of Commerce (ICC) International Court of Arbitration announced new policies to foster transparency and efficiency in ICC arbitration. Both policies were unanimously adopted and announced at the Bureau of the Court at its session on December 17, 2015.

As of January 1Coetzee, Theresa 1st, once a tribunal of arbitrators is constituted for a particular matter, the Court will publish online the names of the arbitrators, their nationality and whether their appointment was made by the Court or by the parties. The tribunal chairperson will also be indicated. Only by mutual agreement, may the parties opt out of this limited disclosure. The parties also have the option to request that the Court publish additional information about a particular case. That said, the names of the parties and counsel will remain private.

A party’s selection of arbitrator is a critical, strategic decision in international arbitration. Presumably, this new policy will allow parties to know which arbitrators on the ICC panel are actively handling cases. Going forward, it will be interesting to see whether parties choose to include this disclosure, disclose more about their cases or maintain privacy. Decision to opt out of disclosures will be case sensitive. But, disclosures should make gathering intelligence on potential arbitrators easier.

The second policy announced is fantastic news in my mind. The cost and time associated with international arbitration is always a consideration for in-house counsel. And, while international arbitration has many benefits, timely decisions are not always one of them.

Consequently, the ICC announced that it will reduce the fees paid to arbitral tribunals that fail to submit a draft award within three months of the last substantive hearing or the last substantive post-hearing submission (two months in the case of a sole arbitrator). These reductions will not, however, be rigidly enforced. The Court will look at the complexity and circumstance of the case in making reduction decisions. And, importantly, expeditious decision drafting can be rewarded with an increase in arbitrator fees.