The School of International Arbitration at Queen Mary College, University of London, has published the results of its sixth annual survey in international arbitration. This year, the survey covered a range of issues relating to improvements and innovations in international arbitration. The report is based on 763 questionnaires and 105 interviews of stakeholders involved in international arbitration in a range of capacities, including in-house lawyers, private practitioners, arbitrators, academics, expert witnesses, arbitration institutions and third-party funders.
Highlights of the survey are summarised below:
Views on international arbitration
Some 90% of those responding to the survey indicated that international arbitration is their preferred dispute resolution mechanism. This surprisingly large majority may simply reflect the preferences of those who chose to respond to a survey focusing on international arbitration. The respondents considered that the most valuable characteristics of international arbitration are the ease of enforcement of arbitration awards under the New York Convention, its flexible procedures, and the ability to select arbitrators rather than being reliant on a judge assigned by a national court system. The least favourable aspects of international arbitration were said to be costs, the lack of effective sanctions during the arbitration process, and a concern that more transparency is needed as to the efficiency of arbitrators. Some 77% of respondents oppose the introduction of an appeal mechanism on the merits in commercial arbitration, while for investor-state arbitration an appeal mechanism is opposed by 61%.
Preferred and improved seats
The five most preferred and widely used seats are London, Paris, Hong Kong, Singapore and Geneva. Only 18% of respondents were based in the Americas, which may account in part for the predominance of Europe and Asia in these preferences. These preferences were driven predominantly by the respondents’ views of the seat’s established formal legal infrastructure, the neutrality and impartiality of the legal system, the national arbitration law, and its track record for enforcing agreements to arbitrate and arbitral awards. Singapore is regarded as the seat that has achieved the most significant improvement over the last five years.
Preferred and improved institutions
The five most preferred arbitral institutions are the ICC (based in Paris), LCIA (based in London), HKIAC (Hong Kong), SIAC (Singapore) and SCC (Stockholm). Respondents’ selections would be influenced by their views of the quality of administration provided by the institutions and their level of “internationalism.” The most improved institution was regarded as HKIAC, closely followed by SIAC. Calls for increased transparency predominated in the respondent’s suggestions for improvements, focusing on the time taken for cases to be completed and the performance of individual arbitrators, as well as the institutions’ approaches to appointments of and challenges to arbitrators.
Reducing time and cost
Respondents were asked for their views on various procedural innovations to control time and cost in international arbitration. 59% of respondents favoured a requirement for tribunals to commit to a schedule for deliberations and delivery of final awards. 92% of respondents favour inclusion of simplified procedures in institutional rules for claims under a certain value, although no clear view emerged as to the value that should trigger such procedures.
Soft law and guidelines
National arbitration laws and institutional rules are frequently supplemented by soft laws and guidelines, which may either be adopted or used as guidance in a particular arbitration. The IBA Rules on the Taking of Evidence and the IBA Guidelines on Conflicts of Interest are the most widely favoured, having been used by 77% and 71% of respondents respectively. 70% of respondents consider that there is an adequate amount of regulation in international arbitration.
Role and regulation of specific actors
One area where a clear majority of respondents believe additional regulation is required is third party funding, although interestingly only 12% have used it in practice. 76% of respondents hold the view that claimants should disclose their use of third party funding, and 87% believe that third party funding should be regulated, either by way of guidelines or through a code of conduct.
These results will doubtless trigger much discussion and reflection among stakeholders in international arbitration, and will perhaps lead to further improvements in national arbitration laws, institutional rules and guidelines. What is clear from the survey is that international arbitration is thriving and a popular alternative in appropriate cases to litigation in national courts.