CPR recently launched a new set of Rules for Administered Arbitration of International Disputes for use in cross-border business transactions. These new Rules reflect best practices, including the arbitration work of UNCITRAL, and address current issues in international arbitration, such as arbitrator impartiality, lengthy time frames to reach resolution, burdensome and unpredictable administrative costs and requirements. To celebrate their release, and introduce them across the globe, CPR held a series of well-attended launch events in London, Paris, Miami, Geneva, Madrid, Brazil and Washington, DC.
CPR’s newest event takes a deeper dive into one of the Rules’ most buzzed-about aspects, the Screened Selection Process for Party-Appointed Arbitrators ™. Responding to the need to both preserve the right of the parties to appoint their arbitrators and guarantee the fairness and impartiality of arbitration, the Screened Selection Process ™ is available under the new CPR Arbitration Rules, and will be discussed from the perspectives of the users, outside counsel and arbitrators on July 30, 2015 at Jenner & Block in Chicago and via live webcast.
To begin, could you provide a quick recap of CPR’s recent launch events celebrating the new rules?
Over the past few months, we have organized eight events to celebrate the launch of the new CPR Rules for Administered Arbitration of International Disputes. At each of these events, panelists discussed the key benefits and innovations of the rules from different perspectives – the corporate counsel, arbitration practitioner, arbitrator, and institutional perspectives. The events were well attended and, whether they were held in the US, Europe or Brazil, they triggered a lot of interest.
What were some of the most memorable responses you received about the rules, either at the launch events or otherwise. What are people most surprised about, thrilled about, etc.?
The new rules triggered a lot of interest because attendees felt that they really address many of the criticisms we currently hear about arbitration, such as high costs, lengthy timeframes, and bureaucratic administration of the proceedings. With the new rules, CPR provides only the services that are necessary from an administering institution, and no more. Thus, CPR gets involved at the very beginning – at the commencement and arbitrator appointment stages – and at the end – to provide a “light” review of the awards and to issue them.
In between, CPR handles all billing aspects, but lets the tribunal interface directly with the parties on all other matters. All pleadings and filings to CPR are in electronic format only. As a result of this “lean administration,” CPR is able to offer a very competitive schedule of administrative costs. Administrative costs are capped at US$34,000 for disputes over US$500 million. At a time when all companies are trying to contain the costs of dispute resolution – and where smaller companies simply cannot afford an expensive dispute resolution process – that was particularly appealing.
Another feature which triggered a lot interest is the provision under the rules for the issuing of the award within 12 months of the constitution of the tribunal. Very often, users of arbitration have had terrible experiences of proceedings that lasted longer than court proceedings, when arbitration is supposed to offer a fast dispute resolution process. The CPR rules require all actors of an arbitration to use their best efforts to comply with this time requirement. Any scheduling order or extension from the tribunal that would result in extending this timeline must be approved by CPR. Such extension requests are not new, but what was interesting to the attendees of these events was the fact that these approvals are not automatic. Whenever such an approval is requested, CPR can convene all involved in the arbitration to discuss the factors that have led to the extension request. This mechanism increases the accountability of all actors of the arbitral process while asking them to comply with a reasonable timeframe. I say reasonable because historically the average length of CPR cases is a little over 11 months.
Finally, there was a lot of interest – particularly from the corporate counsel – for the provision in the rules which encourages the arbitral tribunal to propose settlement and assist the parties in initiating mediation at any stage of the arbitration proceedings.
CPR’s event in Chicago delves deeper into one of the most unique and valued features of the rules—the screened selection process. What were the challenges that necessitated this specific Rules feature? How did we address those challenges? What have responses from users of the new rules been like on this point in particular?
Arbitrator selection is a key phase of any arbitration and getting qualified arbitrators appointed for a particular dispute is critical to ensure smooth proceedings. The ability for the parties to choose their decision makers is also one of the main advantages of arbitration. The CPR rules offer many options that arbitration users can choose from in their arbitration clause depending on the specific nature of the disputes they anticipate. The bottom line is that they have the ability – and are encouraged – to really control the arbitrator selection process.
One of the options provided is called the CPR Screened Selection Process ™ for party-appointed arbitrators. That process – which is unique to CPR arbitration rules – enables each party to choose their “party-appointed” arbitrators without them knowing which party has designated them. CPR acts as a screen between the parties and their candidates. This is an interesting process because, even though all arbitrators under CPR Rules must be impartial and independent, there can be some degree of ambiguity around the role that a party-appointed arbitrator is supposed to play. This selection offers the parties the ability to choose their arbitrators while, at the same time, removing that ambiguity and changing the working dynamics among the members of a tribunal.
Olivier André is CPR’s Vice President, International and Dispute Resolution Services. In this capacity, Mr. André is responsible for CPR’s international activities, as well as international arbitration and mediation matters which are brought before CPR pursuant to its rules. He can be reached at email@example.com. For Mr. André’s full bio, click here.