Author: Ian Smith
Under the new LCIA Rules 2014, one of the aims is to increase the speed and efficiency of arbitrations. However, arbitration awards can take a long time and even be delayed beyond the expected deadline, resulting in frustration for the parties involved and potentially serious financial consequences.
International arbitration bodies and their award time frames
Deadlines for awards will depend on the choice of arbitral body. Three of the most popular international arbitration bodies are the International Court of Arbitration of the International Chamber of Commerce, which has a deadline for awards of six months; the London Court of International Arbitration, which provides for final awards to be made as soon as reasonably possible following the last submission; and the International Centre for Dispute Resolution, which states that the final award shall be made no later than 60 days from the closing of the hearing.
As the various time frames above indicate, there is a range of periods for the granting of awards under the rules of international arbitration. Unfortunately, arbitrators can often miss the deadlines under the rules of the arbitration with the actual granting of the awards following much later. Most solicitors involved in arbitration will have horror stories of delayed awards. We are aware of awards that have been delayed many months and even years. Whilst many arbitrations will progress smoothly, delays, and especially delays in the granting of the award, the main point of the whole affair, can cause significant issues.
Can delays be prevented?
Delays in the award will likely frustrate and irritate the parties expecting the award especially since, as we all know from Tom Petty, “the waiting is the hardest part”. Other than irritation, more significant and damaging problems can arise from a delayed award, such as the insolvency of one of the parties, and so any measures to maintain the prescribed timetables or to hasten the award should be welcomed. Whilst Thomas Jefferson said that “delay is preferable to error” there should be few reasons why awards cannot be given in a reasonable time frame.
Appointing arbitrators who have confirmed in advance that they have capacity to make a swift award is one possibility, though there is no guarantee that their time will still be as free a number of months after that confirmation. The rules used should also be checked carefully for any sanctions that may be available against the arbitrator for delay.
Despite the delays that can arise, the arbitration process is generally simpler and more flexible than court proceedings and quicker: the court process is subject to backlogs of actions and slow procedural timetables, and can take many years. The benefits of having arbitrators with technical expertise should also not be overlooked even if there is a delay in the granting of the award: their expertise may save time over the long run.
Ian Smith, Associate, Fladgate LLP (email@example.com)