Even if an application for summary procedures has a real prospect of

success, what are the issues you need to consider when weighing the

benefits to be gained from a successful application for summary procedures

on the one hand and the uncertainties of time, cost and effort associated

with doing so on the other?

 

1. What do your contract and chosen rules say?

 

Whether or not arbitrators have the power to grant summary procedures in

a particular case depends on what the parties have agreed, at least in the

first instance.

In some (unusual) cases, parties may have included specific provisions in

the arbitration agreement itself. Notably, the arbitration clause in Travis Coal

Restructured Holdings LLC v Essar Global Fund Ltd [2014] EWHC 2510

(Comm) (which was found to authorise summary procedures) provided:

 

"The arbitrators shall have the discretion to hear and determine at

any stage of the arbitration any issue asserted by any party to be

dispositive of any claim or counterclaim, in whole or part…".

 

This sort of express language is, however, the exception rather than the

rule. Absent this degree of specificity in the arbitration clause, the question

shifts to the arbitral rules the parties have selected. A few sets of rules deal

with this issue explicitly, notably the Stockholm Chamber of Commerce

Rules (Article 39(1)), the ICSID Arbitration Rules (Rule 41(5)) and the

Singapore International Arbitration Centre Rules (Rule 29.1). There are

some differences in wording and approach. The SCC Rules give tribunals

the specific power to decide issues summarily and without taking every

procedural step that would otherwise have been undertaken, whereas the

ICSID and SIAC Rules allow a party to apply for the early dismissal of a

claim (or, under the SIAC Rules, a defence) on the basis that it is manifestly

without legal merit, or alternatively (under the SIAC Rules) that it is

manifestly outside the jurisdiction of the tribunal.

 

Other rules, while not addressing summary procedures explicitly, extend

broad case management powers to arbitrators, which may be sufficient

authority for a tribunal to order summary procedures. These include the ICC

Rules (Article 22.2), the LCIA Rules (Article 14), the UNCITRAL Arbitration

Rules (Article 17) and the ICDR Rules (Article 20.3). In the absence of

express provisions, however, there is room for significant debate as to what

procedures a tribunal can, and should, order.

 

In short, ask yourself: Is there any relevant language in the parties'

arbitration agreement? Which rules apply and what do they provide?

The more explicitly that summary procedures are authorised, the safer the

 

2. Where the rules are unclear, what will persuade a court to uphold an

award granted following a summary procedure?

 

There is little English case law on this point and Travis Coal is the high

water mark to date. The case concerned an ICC arbitration seated in New

York. Summary judgment was granted by the tribunal and the unsuccessful

party applied to a New York court to vacate the award, alleging failure of

due process. At the same time, the successful party sought to enforce the

award in England. Mr Justice Blair in the English Commercial Court

observed that summary judgment does not "necessarily amount to a denial

of due process" (paragraph 44), that the arbitration was conducted "in an

expeditious and cost-effective manner", that "each party [had] a fair

opportunity to present its case" and that "the procedure fell within [the

arbitration clause]" (paragraph 50). Therefore he concluded that, on the

facts of this case, the tribunal had not exceeded its powers. However, he

did not enter into the broader debate on the availability of summary

procedures in international arbitration.

In the case of Global International Reinsurance Co Ltd v TIG Insurance

Company 640 F. Supp. 2d 519 (2009), a New York court was asked to

vacate an arbitration award following a grant of partial summary judgment.

The parties' arbitration agreement provided that "[t]he arbitrator shall be

relieved of all judicial formality and shall not be bound by the strict rules of

law". Following a dispositive motion, the arbitrator received written

submissions and heard two days of oral argument from the parties. The

arbitrator granted summary judgment without discovery or an evidentiary

hearing and the losing party objected. The New York court refused to vacate

the award, ruling that the arbitration agreement had been explicit in relieving

the arbitrator from the strict rules of law and that the arbitrator had acted

within his powers: "the losing party got all that it bargained for when it

elected arbitration" (paragraph 1).

 

Both these cases indicate that where the rules are unclear, there are two

important areas you need to explore:

 

• The nature of the application

 

What is the tribunal being asked to determine on a summary basis? Is it a

limited issue or substantially the whole dispute? How straightforward is the

underlying subject of the application? Some matters might be easier for a

tribunal to determine summarily than others.

 

• The proposed procedure

 

What is the proposed procedure for dealing with the issue and is it

appropriate in the circumstances of the case? There is a spectrum of

potential procedures that can be ordered. In Travis Coal, the procedure

adopted was described by the judge as a "hybrid procedure" - it included an

oral hearing and limited cross-examination of witnesses.

 

Original Source: Hogan Lovells, Asia Talking Point: Construction and Engineering. December 2017

BACK TO NEWS INDEX