It has been suggested that the use of arbitration to resolve disputes in the financial services sector is less popular than it could be, largely due to the standard rules of major arbitral institutions not necessarily offering business users in the sector the certainty and expedition that they seek. This notably prompted PRIME Finance to be established. Many jurisdictions, including England and Wales, of course permit parties to expedite the arbitration procedure by, for example, agreeing to limit the time periods for service, or to vary or eliminate the right to an oral hearing.
In order to assist parties wishing to provide for such an expedited procedure in their contracts, the Financial Sector Branch of The Arbitration Club has produced a bespoke set of clauses that together establish the “Financial Services Expedited Arbitration Procedure”, launched on 30 April 2015.
A number of major arbitral institutions, including the London Court of International Arbitration, the International Centre for Dispute Resolution, the International Chamber of Commence and the Hong Kong International Arbitration Centre, were consulted during the drafting of the Procedure, which is designed to supplement the standard rules of such institutions.
The clauses, which can operate on a stand alone basis, include:
- that the arbitrator or arbitrators nominated by the parties shall have “experience and/or expertise related to financial services”;
- a power for the Tribunal to dispense with the discovery and/or disclosure of documents;
- limiting the time periods for service of pleadings and evidence; and
- that a hearing is to be held only if requested by a party and deemed necessary by the Tribunal.
The Procedure establishes an overall timetable which envisages that where a sole arbitrator is appointed, the award will be handed down within 21 weeks of the service of the response of the request for arbitration, plus the length of the hearing. Where the Tribunal comprises three arbitrators, this is extended to 22 weeks, plus the length of the hearing.
While speed and efficiency are always welcome in arbitration proceedings, an expedited arbitration procedure may not be suitable in every type of dispute, such as where there are complex facts or where detailed expert evidence is required. Financial institutions are advised to consult with their lawyers and consider whether, and in what form, an expedited procedure is appropriate for the nature of their business.
The Procedure is freely available for use by parties contemplating the use of arbitration and can be downloaded at http://arbitrationclub.org.uk/financial-sector/eplaunch.
