Is there scope for the wider application of fast-track arbitrations in the resolution of international

425 Pages·2013·5.57 MB·English

by  Fatih Serbest

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Is there scope for the wider application of fast-track arbitrations in the resolution of
international commercial disputes?
Serbest, Fatih
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King's College London
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Title:
Is there scope for the wider application of fast-track arbitrations in the resolution of international

commercial disputes?
A uthor: Faith Serbest
The copyright of this thesis rests with the author and no quotation from it or
information derived from it may be published without proper acknowledgement.
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IS THERE SCOPE FOR THE WIDER APPLICATION OF FAST-TRACK
ARBITRATIONS IN THE RESOLUTION OF INTERNATIONAL
COMMERCIAL DISPUTES?
Thesis submitted to the Dickson Poon School of Law, King's College London,
for the degree of Doctor of Philosophy in Law Research by Fatih Serbest
27 June 2013
ABSTRACT
Arbitration has long been the preferred method of resolving commercial
disputes as, at its best, it is both cheaper and quicker than litigation. But by
the 1980s many international commercial arbitration cases were proving so
slow and expensive that its advantages were being questioned. At this time
several approaches were tried to make arbitration faster and cheaper. ‘Fast-
track arbitration’ was one of these new approaches. In the last 25 years fast-
track arbitration has become “institutionalized”, as an increasing number of
institutions have enacted specific sets of expedited rules. Despite this trend,
there is still uncertainty over whether fast-track procedures can become a
viable alternative to conventional international arbitration. With more than 25
years of practical application of FTA to look at, it is time to ask the question
which forms the title of this thesis: Is there a scope for the wider application of
fast-track arbitrations in the resolution of international commercial disputes?
In order to find an answer, this thesis looks at the development of regular
arbitration and why it changed from a swift and economic method of solving
disputes into the cumbersome and unpopular method of the 1980s. We will
then consider the various attempts that were made to improve the situation,
culminating in the development of international fast-track commercial
arbitration (IFTCA) that we see today. Having examined the defining features
of IFTCA, the thesis will be in a position to weigh the evidence on whether
there is a scope for the wider application of fast-track procedures.
2
ACKNOWLEDGEMENTS

I would like to take this opportunity to thank a number of people who have
provided their unreserved support during the course of my PhD study. This
thesis would not have been completed if there were not the guidance and
encouragement of my primary supervisor, Professor Phillip Capper. He
offered a huge amount of time and knowledge from which I have really
benefited greatly. My gratitude for his supervision is beyond words.

I would also like to thank Mrs Louise Barrington my original supervisor in the
early stage of my work, who inspired me profoundly with regard to the
research topic. I further wish to express my gratitude to Professor Eva
Lomnicka for her guidance, support and encouragement. Many thanks are
also due to my two examiners, Professor Julian DM Lew and Professor John
Murray, who gave constructive and valuable comments during the viva voce.

My emotional gratitude goes to my beloved wife, Ayse Serbest. Throughout all
these years she has always been by my side, not just physically, but also
spiritually. She is the only person who understands what I have been through
and shares everything with me. I am really proud of her. I would also like to
thank “Anneme, Babama ve Kardeşime”: my family for their love and
continuous support.

Special thanks go to Mr Peter A. Reynolds for proofreading the draft of my
thesis. Thanks are also due to the staff, particularly Dr Cian Murphy, Mrs Lee
Annette and Lindsey McBrayne at the Dickson Poon Law School, King’s
College London for their kind assistance. Without such support I could not
have concentrated one hundred percent on finishing this thesis.

3
TABLE OF CONTENTS
ABSTRACT
  2

ACKNOWLEDGEMENTS
  3

TABLE
 OF
 CONTENTS
  4

ABBREVIATIONS
  6

INTRODUCTION
  23

1
  SPEED
 AND
 ECONOMY
 DURING
 THE
 DEVELOPMENT
 OF
 INTERNATIONAL

COMMERCIAL
 ARBITRATION
  29

1.1
  SPEED
 AND
 ECONOMY
 AS
 A
 TRADITIONAL
 FEATURE
  29

1.2
  SPEED
 AND
 ECONOMY
 AS
 AN
 AXIOM
  33

1.3
  SPEED
 AND
 ECONOMY
 ARE
 INTERNATIONALLY
 CODIFIED
  34

1.3.1
  ENFORCEMENT
 OF
 ARBITRATION
 AGREEMENTS
  40

1.3.2
  ENFORCEMENT
 OF
 ARBITRAL
 AWARDS
  44

1.4
  HARMONISATION
 OF
 ICA
  48

1.4.1
  PARTY
 AUTONOMY
  51

1.4.2
  LIMITED
 COURT
 INTERVENTION
  52

1.4.3
  THE
 GROWTH
 OF
 INSTITUTIONS
  52

1.4.4
  HAS
 HARMONIZATION
 GONE
 TOO
 FAR?
  55

1.5
  CONCLUDING
 REMARKS
  56

2
  CONCERNS
 FOR
 EXCESSIVE
 COST
 AND
 DELAY
 IN
 ICA
  57

2.1
  EXCESSIVE
 LENGTH
 OF
 ARBITRATION
  60

2.2
  EXCESSIVE
 COST
 OF
 ARBITRATION
  62

2.3
  THE
 REASONS
 FOR
 EXCESSIVE
 COST
 AND
 DELAY
 IN
 ICA
  70

2.3.1
  PROVIDING
 FOR
 UNKNOWN
 CIRCUMSTANCES
  71

2.3.2
  DELAYING
 TACTICS
  72

2.3.3
  DIFFERENCES
 IN
 CULTURAL
 AND
 LEGAL
 BACKGROUNDS
  75

2.3.4
  AMERICANIZATION
 OF
 INTERNATIONAL
 COMMERCIAL
 ARBITRATION
  79

2.3.5
  SPECIALISTS
 ARBITRATION
 LAWYERS
 COULD
 NOT
 REDUCE
 EXCESSIVE
 COST
 AND
 DELAY
 IN
 ICA

  80

2.3.6
  REPRESENTATION
 BY
 INEXPERIENCED
 LAWYERS
  83

2.3.7
  E-­‐DOCUMENT
 PRODUCTION
  84

2.4
  SLOWNESS
 AND
 EXPENSE
 MAY
 BE
 ACCEPTABLE
 TO
 PARTIES
 IN
 SOME
 TYPE
 OF

INTERNATIONAL
 COMMERCIAL
 DISPUTES
  85

2.5
  WHAT
 MAKES
 ICA
 SLOW
 AND
 EXPENSIVE?
  87

2.6
  CONCLUDING
 REMARKS
  90

3
  AVOIDING
 COST
 AND
 DELAY
  94

3.1
  PARTY
 AUTONOMY
 ENABLES
 SPEED
 AND
 ECONOMY
  94

3.2
  ARBITRATORS
 ARE
 UNIQUELY
 PLACED
 TO
 CHANGE
 THE
 PACE
 OF
 AN
 ARBITRATION
  97

3.3
  STATUTORY
 PROVISIONS
 FOR
 TIME
 AND
 COST
 CONTROL
  100

3.4
  INSTITUTIONAL
 ADAPTATION
 TO
 SPEED
 AND
 ECONOMY
  102

3.5
  GUIDELINES
 ON
 COUNSEL
 CONDUCT
  110

3.6
  CONCLUDING
 REMARKS
  113

4
  FAST-­‐TRACK
 ARBITRATION
 AS
 A
 PARADIGM
  114

4
4.1
  DEFINITION
 OF
 FAST-­‐TRACK
 ARBITRATION
  114

4.2
  THE
 DEVELOPMENT
 OF
 INSTITUTIONAL
 FTA
 RULES
  116

4.2.1
  EARLY
 SUGGESTIONS
 FOR
 IMPROVING
 THE
 SPEED
 OF
 ARBITRATION
  116

4.2.2
  THE
 MODERN
 CONCEPT
 OF
 FTA
  119

4.3
  DUE
 PROCESS
 AND
 FAST-­‐TRACK
 PROCEDURES
  124

4.3.1
  IMPARTIALITY
 AND
 INDEPENDENCE
 OF
 ARBITRATORS
  126

4.3.2
  RIGHT
 TO
 BE
 HEARD
  128

4.3.3
  EQUAL
 TREATMENT
  131

4.4
  ESTABLISHING
 A
 FAST-­‐TRACK
 ARBITRATION
  133

4.4.1
  PRE-­‐DISPUTE
 FTA
 CLAUSES
 AND
 FAST-­‐TRACK
 METHODS
  134

4.4.2
  GENERAL
 DRAFTING
 CONSIDERATIONS
 FOR
 FTA
 CLAUSES
  150

4.4.3
  FTA
 SUBMISSION
 AGREEMENT
 (POST
 DISPUTE,
 PRE-­‐TRIBUNAL)
  159

4.4.4
  SUPPLEMENTARY
 (POST-­‐TRIBUNAL)
 AGREEMENT
  163

4.4.5
  CHOICE
 BETWEEN
 AD-­‐HOC
 AND
 INSTITUTIONAL
 FTA
  165

4.4.6
  INSTITUTIONAL
 FTA
 PROCEDURES
 -­‐
 VARIETY
 OF
 APPROACHES
  168

4.4.7
  THE
 SEAT
 OF
 FAST-­‐TRACK
 ARBITRATION
  180

4.5
  PROCEDURAL
 ELEMENTS
 OF
 FTA
  192

4.5.1
  COMMENCING
 FAST-­‐TRACK
 ARBITRATION
  192

4.5.2
  CONSTITUTION
 OF
 THE
 ARBITRAL
 TRIBUNAL
  200

4.5.3
  ORGANISING
 THE
 FAST-­‐TRACK
 PROCEEDINGS
  217

4.5.4
  WRITTEN
 SUBMISSIONS
  225

4.5.5
  GATHERING
 OF
 EVIDENCE
  236

4.5.6
  PRE-­‐HEARING
 CONFERENCE
  249

4.5.7
  CONDUCTING
 THE
 HEARING
  250

4.5.8
  POST-­‐HEARING
 MATTERS
  260

4.6
  CONCLUDING
 REMARKS
  263

5
  IS
 THERE
 SCOPE
 FOR
 THE
 WIDER
 APPLICATION
 OF
 FTA
 IN
 INTERNATIONAL

COMMERCIAL
 DISPUTE
 RESOLUTION?
  266

5.1
  THE
 CURRENT
 LEVEL
 OF
 USE
 OF
 FTA
  266

5.2
  RISKS
 ASSOCIATED
 WITH
 FTA
 WHEN
 COMPARED
 WITH
 RA
  279

5.2.1
  FEAR
 OF
 COMPROMISING
 DUE
 PROCESS
  280

5.2.2
  THE
 IMPACT
 OF
 MANDATORY
 PROCEDURAL
 REQUIREMENTS
 ON
 FTA
  287

5.2.3
  INTERNATIONAL
 ENFORCEABILITY
 OF
 FTA
 AWARDS
 UNDER
 THE
 NYC
  292

5.3
  DEVELOPING
 WIDER
 SCOPE
 FOR
 FTA
 –
 PROCEDURAL
 ISSUES
  318

5.3.1
  DRAFTING
 CLEAR
 CLAUSES
  318

5.3.2
  INCREASING
 THE
 NUMBER
 OF
 COMPETENT
 AND
 AVAILABLE
 FTA
 PARTICIPANTS
  324

5.3.1
  REDUCING
 THE
 TIME
 AND
 COST
 OF
 PRODUCING
 THE
 AWARD
  336

5.3.2
  CASES
 RESISTANT
 TO
 THE
 APPLICATION
 OF
 FTA
  339

5.3.3
  DISPUTE
 IDEALLY
 SUITED
 TO
 FTA
  341

5.4
  CONCLUDING
 REMARKS
  342

5.5
  RECOMMENDATIONS
 TO
 INCREASE
 SCOPE
 OF
 FTA
  346

6
  CONCLUSION
  352

6.1
  CHAPTER
 CONCLUSIONS
  352

6.2
  ANALYTICAL
 CONCLUSION
  357

APPENDIXES
  359

BIBLIOGRAPHY
  361

5
ABBREVIATIONS

Institutions, Organisations and Rules
AAA American Arbitration Association
AAA Rules AAA Commercial Arbitration Rules of 2009
AAA/ICDR Rules AAA/ICDR International Arbitration Rules of 2009
ACICA Australian Centre for International Commercial
Arbitration
ACICA Rules ACICA Arbitration Rules of 2011
ACICA FTA Rules ACICA Expedited Arbitration Rules of 2011
ABA American Bar Association
AIA Italian Arbitration Association
ASA Association Suisse de l’Arbitrage (Swiss Arbitration
Association)
ASEAN Association of Southeast Asian Nations
BCC Basel Chamber of Commerce
BCC Rules Basel Chamber of Commerce Arbitration Rules of
1995
CAM Camera Arbitrale Milano (Chamber of Arbitration of
Milan)
CAM Rules CAM Arbitration Rules of 2010
CAMARA The Court of Arbitration of Madrid Official Chamber
of Commerce and Industry of Madrid
CAMARA Rules CAMARA Arbitration Rules of 2008
CAMCA Commercial Arbitration and Mediation Centre for
the Americas
CAS Court of Arbitration for Sport
CAS-Code Court of Arbitration for Sport Code
CAS Rules Court of Arbitration for Sport Rules
CCA College of Commercial Arbitrators
6
CCIG Chamber of Commerce and Industry of Geneva
CCIG Rules Chamber of Commerce and Industry of Geneva
Arbitration Rules (1992)
CCPIT China Council for the Promotion of International
Trade
CEDR Centre for Effective Dispute Resolution
CEDR Rules CEDR Rules for the Facilitation of Settlement in
International Arbitration (2009)
CEPANI Belgian Centre for Arbitration and Mediation
CEPANI Rules Arbitration Rules of the Belgian Centre for
Arbitration and Mediation
CIArb Chartered Institute of Arbitrators
CIDRA Chicago International Dispute Resolution
Association
CIDRA Rules CIDRA Arbitration Rules of 2005
CIETAC China International Economic and Trade
Arbitration Commission
CIETAC Rules CIETAC Arbitration Rules of 2012
CIMAR Construction Industry Model Arbitration Rules
CMI Comité Maritime International
CPR Institute for Center for Public Resources Institute
for Dispute Resolution
CPR Rules Global Rules for Accelerated Commercial
Arbitration of 2009
CRCICA Cairo Regional Centre For International
Commercial Arbitration
CRT Claims Resolution Tribunal for Dormant Accounts
in Switzerland
CTF Coffee Trade Federation
DAC Departmental Advisory Committee on Arbitration
Law
7
DIS Deutsche Institution für Schiedsgerichtsbarkeit
(German Institute of Arbitration)
DIS Rules DIS Arbitration Rules (1998)
DIS SREP DIS Supplementary Rules for Expedited
Proceedings (2008)
EC European Community
ECA European Court of Arbitration
ECA Rules ECA Pre‐Arbitral Referee Rules of 1997
ECAFE United Nations Economic Commission for Asia and
the Far East
ECOSOC United Nations Economic and Social Council
EEC European Economic Community
EU European Union
FAA Federal Arbitration Act of United States of America
(1926)
FALCA Fast and Low Cost Arbitration (LMAA)
FCC Finland Chamber of Commerce
FCC Rules FCC Arbitration Rules of 2004
FCC FTA Rules FCC Expedited Arbitration Rules of 2004
Fed.R. Civ. Proc. Federal Rules of Civil Procedure of United States
FIDIC International Federation of Consulting Engineers
FOSFA Federation of Oils, Seeds and Fats Association
FTA Fast-track Arbitration
FTAC Foreign Trade Arbitration Commission
GAFTA Grain and Feed Trade Association
GATT General Agreement on Tariffs and Trade
HKIAC Hong Kong International Arbitration Centre
HKIAC Rules HKIAC Arbitration Rules of 2008
IACAC Inter-American Commercial Arbitration
Commission
IBA International Bar Association
8