Frustration over delays in issuing arbitral awards

A report published earlier this year by the International Chamber of Commerce (the ICC) Commission on Arbitration and ADR, and a subsequent study by the School of International Arbitration at Queen Mary University of London (QMUL) in partnership with Pinsent Masons, highlighted this issue and considered how efficiency could be improved.

Maximising the efficiency of arbitration proceedings is a central theme in both the report and the study, and there is scope to improve efficiency across the whole process, from the selection of the arbitral tribunal, in the conduct of the arbitration itself – including in how the tribunal manages issues and claims, evidence, and submissions and hearings – and, as we explore here, in the issuance of the arbitral award.

Ultimately, unless the parties can reach a settlement, the legal result of the parties' investments of time and money in the proceedings will come down to the arbitral tribunal putting fingers to keyboards and drafting the arbitral award.

Although success or failure for a party critically turns on the dispositive section of that arbitral award, success can be bolstered, and failure mitigated, to some degree by the efficient conduct of the proceedings, and parties sometimes need to pursue enforcement proceedings too for the awards to be fully realised.

Parties are therefore justifiably eager for the award to be issued. To promote the expedient issuance of the arbitral award, some procedural rules – like the ICC Rules of Arbitration (2017) – impose a timeline for the arbitral tribunal to render its final award, with some room for flexibility, while others remain silent on this point, such as The Rules on the Efficient Conduct of Proceedings in International Arbitration, known as the 'Prague Rules'. 

However, difficulties are regularly encountered in practice with issuing an arbitral award within any prescribed timelines, especially in the case of arbitrations in the construction industry. In its report, the ICC Commission notes that, as a practical matter in most construction industry arbitrations, it is difficult or perhaps impossible to devise a timetable that would even come close to enabling the arbitral tribunal to render its award within six months from the terms of reference, as prescribed under the ICC Rules of Arbitration (2017). The report goes further and provides the ICC Commission's view that, for disputes of average or above-average complexity, this prescribed six month timeline is "clearly insufficient".

While the report contains recommendations to assist arbitral tribunals in drawing up a procedural timetable for the arbitration, there is understandably little guidance to be offered to expedite the issuance of the arbitral award itself, apart of course from the report's plentiful recommendations for making the arbitral proceedings more efficient overall.

Given the significance of the arbitral award and the lacuna which would seem to exist between the parties' expectations, based in part on the timelines prescribed by some procedural rules, and the realities of practice, it is no wonder that participants in arbitration would highlight the timing for issuance of the arbitral award in the conversation around efficiencies. For them, there appears to be preference for a shorter timeline for the issuance of an arbitral award. One of the recurring issues mentioned by participants who were interviewed for the QMUL study on the topic of effective case management was delay in issuing the final award.

Efficiencies within the arbitral tribunal

As to participants' views on how the arbitral tribunal can impact efficiency in the context of issuance of the arbitral award, the number one characteristic of an efficient international construction arbitrator selected by respondents to the QMUL survey was issuing an award within a reasonable period of time. The survey also revealed that a significant number of respondents consider it important for arbitrators to commit early on to a schedule for the evidential hearing and issuance of the arbitral award.

When asked how efficiency within the arbitral tribunal for international construction disputes could be improved, one of the suggestions which emerged from interviews conducted by QMUL with survey respondents was the division of tasks between the tribunal, such as splitting up the drafting of the award. The extent to which this suggestion may be realistically, and still efficiently, carried out in practice would likely depend on a number of factors, with different results from case to case, however.

Efficiencies within the arbitral institution

In cases where international construction arbitrations are being administered by arbitral institutions, participants appear to be of the view that efficiency can be improved on the institution's side as well.

QMUL survey respondents were asked to identify what they perceived to be the characteristics of an efficient institution administering international construction arbitrations. Several of the most popular characteristics selected relate to the timing for the issuance of the arbitral award, including the setting of time limits for the arbitral tribunal to submit an award after the final procedural step, a quick review of the arbitral award and the refusal of any arbitral tribunal requests for an extension of time for the submission of its award, unless there are real and convincing reasons for doing so.