The United Nations Commission on International Trade Law (“UNCITRAL”) plays a vital role in contemporizing the Rules governing international trade. It has also laid down the Model law on International Arbitration (“Arbitration Rules”) through its texts which were first published in 1976 and thereafter revised in 2010 and 2013. Recently, the Arbitration Rules were once again revised in July, 2021 and brought into force on 19 September 2021. In order to bring in a more efficacious, cost and time-effective dispute resolution process, the latest revision introduced the UNCITRAL Expedited Arbitration Rules, 2021 (“UN-EAR”).
Scope and application:
The UN-EAR aims to achieve a streamlined and simplified procedure while balancing the rights of the parties to due process and fair treatment. UN-EAR can kick-in only upon express consent in writing between the parties. It is not only sufficient to refer to the implementation of the Arbitration Rules but express mention of implementation of the UN-EAR should be in writing. However, the parties can agree upon it before or after the dispute arises. This feature of the UN-EAR is slightly different from the expedited arbitration rules of other globally recognised institutional arbitration centres where the amount in dispute also plays a deciding factor for kickstarting expedited arbitration, unless parties agree otherwise.
The UN-EAR is also published with an Explanatory Note which can be used as a reference tool for the parties in deciding whether they want to resolve their dispute under the UN-EAR. It enlists several factors for the parties to consider like urgency involved, the complexity of the issue in dispute, complexity of transactions and number of parties, amount in dispute etc. Considering the factors given in the Explanatory note, the parties can choose to incorporate a clause for implementation of UN-EAR for dispute resolution. The Parties also have an option to withdraw from the applicability of UN-EAR to the dispute resolution. This is however subjected to the decision of the arbitrator.
Procedure:
The highlighting feature of UN-EAR is that it imposes a duty on both the parties and the arbitrator/tribunal to act expeditiously. The timelines under UN-EAR are close and strictly to be followed. The time provided for responding to a notice of arbitration and comments on appointing authority or nominating an arbitrator is 15 days from the date of receipt of the notice. In case the parties fail to agree upon appointing an arbitrator, the Secretary-General of the Permanent Arbitration Court may appoint an arbitrator at any of the Party’s request. Unless the parties agree otherwise, a sole arbitrator shall be appointed, and they should conduct a case-management conference within 15 days from their appointment. The sole arbitrator has the power to conduct the proceedings without an oral hearing unless the parties have requested to that effect. Altogether, the award needs to be passed within six(6) months from the date of constitution of the tribunal with an extension of three months (9 months in toto) in exceptional cases. Any further extension will be possible only with reasons provided in writing and agreed upon by the Parties. UN-EAR also allows the parties to take the assistance of technology in the conduct of arbitration for expeditious dispute resolution.
Comments:
Expedited arbitration has been gaining attraction across the globe in international commercial dispute resolution. The rolling out of UN-EAR provides a simplified procedure for the parties to reach at a resolution with the award expected to be made within a short timeframe. Similar to other contemporary institutional rules, it also strikes a balance with procedural safeguards and allows flexibility for the parties to adopt a time and cost-effective resolution to the disputes..
It is also noteworthy to mention that the UN-EAR can be administered by other International Arbitration Institutions upon payment of prescribed administration fee. Thus, UN-EAR provides the parties with options to strategize and analyse several commercial factors and enter a fast and efficacious dispute resolution mechanism
