Canada: Expanding Options For Efficiency: UNCITRAL's Expedited Arbitration Rules

Over last few years, several arbitration institutions have adopted expedited rules or procedures that provide parties with an option for more streamlined proceedings and a shorter timeline for certain disputes, usually those under a specific dollar value. The United Nations Commission on International Trade Law (UNCITRAL), creator of the UNCITRAL Arbitration Rules, has now followed suit.

In 2018, in response to increasing concerns over costs and delay in international arbitration, UNCITRAL launched a Working Group to consider measures to improve the efficiency of arbitral proceedings. The result is the Expedited Arbitration Rules, which were adopted by UNCITRAL on July 16, 2021, and are set to take effect on September 19, 2021.¹ The Expedited Rules, accompanied by the Working Group's draft Explanatory Note (to be finalized in the fall of 2021) seek to balance the need for streamlined and cost-effective dispute resolution on the one hand, with the importance of procedural fairness, due process, and fair treatment on the other.² Once in effect, the Expedited Rules will substantially broaden the options for parties looking for rules to assist in ad hoc arbitrations (those not administered by an institution).

The following is a high-level overview of some key aspects of the UNCITRAL Expedited Rules.

Application of the Expedited Rules

The Expedited Rules are not a stand-alone document. They must be read in conjunction with the UNCITRAL Arbitration Rules. Indeed, Article 1 of the Expedited Rules provides that where parties agree to the Expedited Rules, the dispute "shall be settled in accordance with the UNCITRAL Arbitration Rules as modified by [the] Expedited Rules and subject to such modification as the parties may agree." Conveniently, a footnote to Article 1 of the Expedited Rules identifies the Articles in the UNCITRAL Arbitration Rules that do not apply to proceedings governed by the Expedited Rules (subject, of course, to party agreement otherwise).

Unlike many other expedited arbitral procedures, the Expedited Rules contain no monetary threshold for their application. Instead, they apply to any dispute "[w]here [the] parties have agreed"³ to their application. This provides flexibility for parties to agree to "opt-in" once a dispute has arisen or to consider whether, if negotiating an arbitration agreement as part of another agreement or transaction, it might be possible to specify at that point certain disputes that ought to proceed in a streamlined manner.

Key differences in the Expedited Rules

One of the first differences in the Expedited Rules is a compressed timeline for initial steps in the proceeding. Unless altered by agreement, a claimant is to send its statement of claim with its notice of arbitration.⁴ A respondent then has 15 days to provide its response and 15 days from constitution of the tribunal to provide its statement of defence. While this is potentially a shorter time period for a defence than the more open "time determined by the tribunal" in the UNCITRAL Arbitration Rules, there is of course nothing to prevent a respondent from requesting more time from the tribunal if such is needed and the parties do not agree on a new date.

As is common in other expedited procedures, the Expedited Rules default to a sole arbitrator. To facilitate the tribunal's prompt constitution, the claimant must propose an arbitrator and appointing authority in its notice of arbitration.⁵ A respondent must include the comments on the claimant's proposed arbitrator and appointing authority with its response. To facilitate the appointment of the tribunal, if the parties do not agree on the arbitrator or appointing authority then within 15 days of a proposal (and similar to the UNCITRAL Arbitration Rules) either party may request the Secretary-General of the Permanent Court of Arbitration designate the appointing authority or decide that it shall appoint the tribunal.

Reflecting what is seen in other expedited procures, "after inviting the parties to express their views and in the absence of a request to hold hearings" the tribunal has the authority to decide that no hearings shall be held,⁶ along with what evidence will be accepted, and the procedure for delivering evidence.⁷ The Expedited Rules also expressly authorize the tribunal, after hearing from the parties, to "utilize any technological means as it considers appropriate to conduct the proceedings" including to conduct hearings.

Lastly, Article 16 of the Expedited Rules provides that the arbitral award shall be rendered within six months from the tribunal's constitution, unless otherwise agreed by the parties.⁸ In exceptional circumstances, the tribunal may extend this time period to no longer than nine months, unless otherwise agreed by the parties.⁹ It remains to be seen what circumstances may be considered "exceptional," however, the Explanatory Note confirms that the tribunal has complete discretion in determining whether circumstances are exceptional and warrant an extension for the deadline for the final award.¹⁰ Depending on the applicable law, the lapsing of this deadline may result in the proceedings being terminated or the annulment of any subsequent award.¹¹ The Explanatory Notes also comment that it might be possible for a party to request, under Article 2(2) of the Expedited Rules, for the tribunal to find the Expedited Rules no longer apply thereby removing this time limit.¹² Many other expedited rules contain similar timeframes for awards; these are frequently met by parties and arbitrators without issue. While the Explanatory Notes highlight a method for addressing potential issues in this time limit, converting a matter from being under the "Expedited Rules" to the main UNCITAL Arbitration Rules could also bring about unintended consequences for the proceeding; any decision on this would by necessity be dependant upon the unique circumstances of a particular matter.

Takeaways

As with all expedited rules, the UNCITRAL Expedited Rules can greatly assist parties in disputes where a more streamlined procedure is preferable to traditional timeframes. The Expedited Rules also preserve the flexibility seen in the UNCITRAL Arbitration Rules, and provide a much-needed efficient procedure for users of international arbitration that prefer ad hoc proceedings and are familiar with the UNCITRAL Arbitration Rules. However, without a built-in monetary threshold or trigger for their application, it will be up to parties to expressly agree to adopt the Expedited Rules as disputes arise or to include a metric for their potential application in arbitration agreements.

Footnotes

1. Draft UNCITRAL Expedited Arbitration Rules, 54th Sess, UN Doc A/CN.9/1082 (2021) [Expedited Rules].

2. Draft Explanatory Note to the UNCITRAL Expedited Arbitration Rules, 54th Sess, UN Doc A/CN.9/1082/Add.1 (2021), para 1 [Explanatory Note].

3. Expedited Rules, supra, Article 1.

4. Expedited Rules, supra, Article 4(2).

5. Expedited Rules, supra, Article 4(1)(a)-(b).

6. Explanatory Note, supra, Article 11.

7. Explanatory Note, supra, Article 15.

8. Expedited Rules, supra, Article 16(1).

9. Expedited Rules, supra, Article 16(2)-(3).

10. Explanatory Note, supra, para 85.

11. Explanatory Note, supra, para 88.

12. Explanatory Note, supra, paras 17, 88.

For more information, visit our Canadian Securities Litigation blog at www.canadiansecuritieslitigation.com/

About Dentons

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Specific Questions relating to this article should be addressed directly to the author.