2012 Queen Mary / White & Case International Arbitration Survey

The 2012 Queen Mary /  White & Case International Arbitration Survey has just been released. This 2012 survey entitled “Current and Preferred Practices in the Arbitral Process” is the fourth in a series of surveys conducted by the School of International Arbitration at Queen Mary, University of London.

The survey is also the largest empirical study ever undertaken in the field of international arbitration. Phase 1 (quantitative survey) involved 710 respondents. Respondents were primarily private practitioners (53%), arbitrators (26%), in-house counsel (10%), as well as counsel from arbitral institutions, academics and expert witnesses (together, 11%). Phase 2 (qualitative survey) involved 104 telephone interviews in order to supplement the Phase 1 data as well as to provide greater context to and explain the  findings in Phase 1. Survey respondents reflected an almost equal split between civil law (48%) and common law background (44%).

The survey explores current and preferred practices in arbitration proceedings under several categories and a selection of the headline findings in each category are as follows:

Selection of arbitrators:

  • 76% of respondents preferred a system of unilateral party appointed arbitrators in a panel of 3 arbitrators. As noted by the survey, “[t]his shows that the arbitration community generally disapproves of the recent proposal calling for an end to unilateral party appointments“.
  • A healthy majority (2/3) of respondents have used pre-appointment interviews with arbitrators, and only 12% think such interviews are inappropriate . The chief issue resolves around the appropriate topics that may be properly discussed at such appointments.

 Organising arbitral proceedings / cost control mechanism:

  • Respondents felt that the most effective methods of expediting arbitral proceedings are, in order of importance, (a) identification by the tribunal of the issues to be determined as soon as possible after the tribunal is constituted, (b) appointment of a sole arbitrator and (c) limiting or excluding document production.
  • Fast track arbitration, though “regularly cited” as a cost-control mechanism is not commonly used in practice with over 95% of respondents not having any experience with it.
  • 85% of the respondents find the IBA Rules on the Taking of Evidence in International Arbitration (see our post here) useful. The IBA rules are used in 60% of arbitrations. Of that 60%, the IBA rules are used as guidelines in 53% and are binding in the remaining 7%.

Interim measures and court assistance:

  • Requests for interim measures to arbitral tribunals and requests for interim measures in aid of arbitration proceedings to court are rare. Respectively, 77% and 89% of respondents had experiences with such request in only 1/4 or less of their arbitrations.
  • A slight majority (51%) believe that arbitral tribunals should have the power to order interim measures ex-parte.
  • Slightly over 1/3 (35%) of applications for interim measures are granted by the tribunal. A large majority (62%) are complied with voluntarily. In only 10% of cases, do parties go to court to seek such enforcement.

 Document production:

  • Requests for document production are common in arbitration with 62% of respondents stating that more than half of their arbitrations involved such requests.
  • Such requests are also at least 3 times more common in common law arbitrations than civil law ones.
  • Disclosed documents can be material to the outcome of cases with 59% of respondents stating that documents obtained pursuant to production materially affected the outcome of the arbitration in at least 1/4 of them.

 Fact and expert witnesses:

  • A majority of respondents (59%) believe that the use of witness statements as a substitute for direct examination at the hearing is generally effective.
  • A vast majority consider that cross-examination is always or usually an effective form of testing of fact witnesses (90%) or expert witness evidence (86%).
  • Despite legal ethical issues (mostly in civil law jurisdictions), mock cross examination finds credence amongst both civil and common law lawyers.
  • Expert witnesses are overwhelming appointed by parties (90%) but only 43% of respondents find party appointed expert witnesses more effective as compared to 31% who consider tribunal appointed expert witnesses more effective.

 Pleadings and hearings:

  • There is a very strong preference (79%) for sequential (as opposed to simultaneous) exchange of pleadings which is borne out in practice. 82% of arbitration cases survey involved sequential exchange of pleadings.
  • Most respondents (57%) preferred the imposition of time limits for oral submissions and witness examination. 34% considered that the necessity for time limits depended on the case while only 6% preferred that no time limits be imposed at all.
  • Short hearings are the norm. 3-5 days (53%), followed by 6-10 days (23%), 1-2 days (19%) and 10+ days (5%). Civil law hearings are also generally shorter than common law hearings.

The arbitral award and costs:

  • An overwhelming majority (96%) of respondents considered that cost sanctions ought to be imposed for improper conduct by a party or its counsel.
  • Respondents, who were arbitrators, considered that they only “split the baby” in respect of their case only 5% of time. However, other respondents considered that this happened in around 17% of cases.
  • Costs follow the event in 80% of cases, however, only a tiny minority of respondents  (5%) prefer that the rule that parties bear their own costs regardless of which party won the case.
  • Respondents generally felt that sole arbitrators should render their awards earlier than a 3 member panel.

This survey provides a very helpful insight into the preferences and conduct of arbitrations and will be of assistance to practitioners, users and tribunal members.

 

About Shaun Lee

International Dispute Resolution and Arbitration lawyer. Fellow of the Chartered Institute of Arbitration. Panel of Arbitrators and Panelist for Domain Name Dispute Resolution at the KLRCA.
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