Time limit for forwarding arbitral award to parties extended

The Presidium of the Ukrainian Chamber of Commerce and Industry (UCCI) recently amended Article 52 of the Rules of the International Commercial Arbitration Court (ICAC) at the UCCI. This article governs the procedure for forwarding an arbitral award to the parties to arbitration proceedings.

Background

Article 52(1) of the rules, which were approved by a decision of the Presidium of the UCCI in April 2007,(1) established that after rendering an award the arbitral tribunal had to announce its operative part to the representatives of the parties. Article 52(2) further stated that the ICAC Secretariat would forward the rendered arbitral award to the parties within 15 days of the date of its rendering. The 15-day period could be extended by the ICAC president in exceptional circumstances, but for no more than 10 days.

Pursuant to Article 52(3) of the rules, and depending on the complexity of the case at hand, the arbitral tribunal was given the right to decide that an arbitral award should be forwarded to the parties without the tribunal having to announce its operative part thereof within 20 days.

Changes

At the end of October 2012 the Presidium of the UCCI amended Article 52(2) to allow arbitrators extra time to forward arbitral awards to parties. Articles 52(2) and (3) now read as follows:

“(2) The ICAC Secretariat shall forward the arbitral award to the parties within 20 days from the date of rendering of the award. The ICAC President may, if it considers it necessary owing to exceptional circumstances, extend this term.

(3) In connection with the particular complexity of the case, the Arbitral Tribunal may, after the oral hearing is closed, decide that the arbitral award will be forwarded to the parties without the announcement of the operative part thereof at the arbitral meeting within the period not exceeding 30 days. The ICAC President may, if it considers it necessary owing to exceptional circumstances, extend this term.”

Thus, the UCCI has not only extended the general time limit for forwarding the arbitral award to the parties, it has given the president the right to allow further extension of such limit without imposing boundaries on such extension.

Comment

The ICAC is widely acknowledged for a number of advantages that it has over other arbitration institutions. In particular, arbitration proceedings at the ICAC are relatively short and inexpensive.

With respect to the length of proceedings, statistics reveal that 80% of ICAC cases are resolved within six months, and 16% of cases are resolved within nine months of the date on which the case is accepted for arbitration.(3) This makes the ICAC one of the most efficient arbitral bodies in Europe and the Commonwealth of Independent States.

However, every year the cases submitted to arbitration become increasingly sophisticated in their substance and involve many parties, consolidated claims and other complicating factors. Therefore, the traditional advantages of the ICAC may turn into disadvantages. Indeed, for some time now the ICAC has been criticised for offering overly quick arbitration – that is, arbitration that is unsuitable for:

• complex cases where extra time and effort are needed to consider the details of the case; and
• cases that require extensive witness interrogation and large bundles of written evidence (ie, corporate disputes).

From this point of view, the October 2012 amendment of the rules appears to be a logical and adequate response to ongoing business demands. Allowing arbitrators extra time to do their job should result in better-quality awards, thus attracting more complex disputes to the ICAC.

However, as well as the positive effects of the 2012 amendments, there are concerns that the extension of the time limits and the ICAC president’s discretionary powers might result in unreasonable delays in the rendering of arbitral awards.

Such negative effect should not occur, first and foremost because, in accordance with Articles 52(2) and 52(3), general time limits are still imposed on the forwarding of arbitral awards and such limits were extended only slightly, so arbitrators are still bound by rather strict time limits.

Further, a comparison of the amended rules with the Rules of the ICAC at the Chamber of Commerce and Industry of the Russian Federation reveals that the Russian rules set no time limit for forwarding the arbitral award to the parties. Article 38(3) of the Russian rules states only that the award shall be made within the time limits in accordance with Article 24 of the rules, while Article 24 also allows the president, at the request of the arbitral tribunal or at his or her own discretion, to extend the 180-day general period of dispute resolution, with no further limitation on such extension.

Therefore, despite certain concerns, the 2012 amendments to the ICAC rules are intended to have a positive impact on the development and promotion of the ICAC at the UCCI as a platform for arbitration in Europe. In future, it is expected that more complex cases will come under its jurisdiction and a higher quality of awards will be delivered under the ICAC Rules.

Endnotes