Importance of a proper balance of power in arbitration

62

arbitrators conducting the proceeding and deciding a dispute. Finally, after the arbitral award is rendered, in order to secure the award’s effectiveness, the baton is again with the courts, which can assist with the enforcement. Nonetheless, as observed by Lord Mustill, it is impossible to talk about the clear-cuts in this relay, and the state court may play an occasional role when the baton is principally in the hands of the arbitral tribunal. ²⁴⁷

Accordingly, the role of the state court in particular stages of arbitration can be described in the following way: (1) before the arbitration proceeding starts, the court helps to enforce an arbitration agreement, can assist the parties with interim measures in aid of arbitration, as well as with forming an arbitral tribunal; (2) during the arbitration proceeding, the court can assist with interim measures in aid of arbitration and with obtaining evidence; (3) after the arbitral award is rendered, the court deals with setting aside of the award, as well as the recognition and enforcement of it.²⁴⁸ As noted, the role played by the court in arbitration can be described as supervisory and supportive to the arbitration proceeding. Yet, it should have nothing to do with the over-interference by the court. As noted by Moses, “there is a wavering line between helpful assistance and unhelpful interference”.²⁴⁹ Therefore, the key issue is to draw lines, where the reliance of arbitration on the court should start and where it should end.

63

proceeding. As indicated, this can also include some level of supervision over the tribunal’s work.

Finally, the court offers its assistance to arbitration and supervises it, if necessary.

*A level of “supervision” can differ in various arbitration institutions.

A proper balance of power shared among the arbitral tribunal, the state court, and the arbitration institution is essential to secure respect toward the party autonomy, as well as the neutrality and efficiency of the arbitration proceeding. The following parts of this thesis discuss in greater detail the significance of this proper balance in the pre-award stage of international commercial arbitration.

Concerning the issue of efficiency specifically, it is important to stress that international commercial arbitration has been recently criticized for not being as efficient as promised. Accusations have been particularly directed toward the promise of arbitration to be fast and cheap. By way of example, respondents to the QMUL 2015 and 2018 surveys mentioned the cost and the lack of speed as some of the worst features of international commercial arbitration.²⁵⁰

A number of various factors have been quoted as contributing to such criticism. Among them is a growing sophistication of arbitration and its players. It has been observed that arbitration has lost its

250 School of International Arbitration Queen Mary University of London and White & Case, (2015), 7.; School of International Arbitration Queen Mary University of London, "2018 International Arbitration Survey: The-Evolution of International Arbitration," (2018), 7-8. See also Lucy Reed, "More on Corporate Criticism of International Arbitration," Kluwer Arbitration Blog (16 July 2014),

http://kluwerarbitrationblog.com/2010/07/16/more-on-corporate-criticism-of-international-arbitration/. (last accessed: 20 November 2018); Christian Bühring-Uhle, Arbitration and Mediation in International Business (2nd Ed.), vol. 13, International Arbitration Law Library (2006), 107-110.

Arbitral Tribunal

Arbitration Institution

State Court

64

original simplicity and has become more and more complex.²⁵¹ This can lead to, for example, behaviors of counsels, which are aimed at abusing the arbitration process for the benefit of their clients. By way of example, a counsel seeking to stall the progress of the arbitration proceeding, in the client’s interest, can raise ungrounded challenges to arbitrators or have extensive requests for the production of documents, in case the law applicable permits that. These practices have been commonly referred to as “guerilla tactics” in arbitration.²⁵²

Also, arbitrators have been accused of suffering from the so called “due process paranoia” symptom.

The “due process paranoia” describes a phenomenon, wherein arbitrators honor various requests coming from the parties and are unable to act decisively. They do it in order to avoid subsequent accusations of the lack of due process, because any of the parties was unable to fully present its case.²⁵³ Further, since the longer arbitration proceeding can be a financial benefit to arbitrators, they may have a limited incentive to act timely.

In order to combat these problems, numerous efforts have been undertaken, especially by arbitration institutions. By way of example, the SIAC requires now that in case of a challenge to an arbitrator, a challenging party has to pay in advance a non-refundable fee, and if the fee is not paid, the challenge is considered withdrawn.²⁵⁴ The HKIAC introduced an arbitration evaluation system, which allows the users to assess the conduct of the arbitration proceeding and the performance of arbitrators.

According to the HKIAC, the data obtained through this evaluation system is used subsequently by the HKIAC to further improve its services.²⁵⁵

It is argued that in light of all of these problems and criticism, securing the efficiency of international commercial arbitration proceedings is of high importance. A proper balance of power shared among the arbitral tribunal, the state court, and the arbitration institution, with the tribunal having a relevant arsenal of powers to capably direct the arbitration proceeding, is the key aspect to the proceeding’s

251 See, for example, Redfern and Hunter, 27.; Jesús Almoguera, "Arbitration and Mediation Combined. The Independence and Impartiality of Arbitrators," in Liber Amicorum Bernardo Cremades, ed. Miguel Ángel Fernández-Ballesteros and David Arias (La Ley, 2010), 104-105.

252 See, generally, on guerilla tactics in arbitration in Günther Horvath and Stephan Wilske, Guerrilla Tactics in International Arbitration (Kluwer Law International, 2014), 1 et seq.; Waincymer, 411-413.

253 See more School of International Arbitration Queen Mary University of London and White & Case, (2015), 10.; Remy Gerbay, "Due Process Paranoia," Kluwer Arbitration Blog (6 June 2016),

http://arbitrationblog.kluwerarbitration.com/2016/06/06/due-process-paranoia/. (last accessed: 20 November 2018); also Bernardo Cremades Sanz-Pastor, "The Use and Abuse of “Due Process” in International Arbitration,"

Arbitraje: Revista de Arbitraje Comercial y de Inversiones 9, no. 3 (2016), 661 et seq.

254 Art. 15(3) of the 2016 SIAC Rules.

255 See the official website of the HKIAC: http://www.hkiac.org/news/rate-your-experience-hkiac-launches-arbitration-evaluation-system (last accessed: 20 November 2018).

65

efficiency. Beyond the efficiency aspect, the proper balance of power is also essential for the neutrality of international commercial arbitration.

66