What are the typical phases of an international arbitration?

For attorneys familiar with litigation before U.S. courts, international commercial arbitration can seem unpredictable.  That is not surprising given that arbitrations have no uniform rule system.  Instead, rules and procedures vary greatly between arbitrations.  

“Party autonomy” is a hallmark of international arbitration.  Parties (generally referred to as “claimant” and “respondent”) can tailor procedures to their needs.  Some venues for commercial arbitrations (including the International Chamber of Commerce, London Court of International Arbitration, and International Centre for Dispute Resolution) have their own rules and procedures.  Some arbitrations are conducted “ad hoc,” without any arbitral institution at all.  Those are often governed by the rules of the United Nations Commission on International Trade Law (UNCITRAL).

There are nevertheless a few typical phases for most mid- to high-value international commercial arbitrations.  What are they?  And how do they differ from court-based litigation?

Commencing the arbitration

Instead of filing a complaint with a court, claimants in international arbitration initiate proceedings by filing a “request” or “demand” for arbitration with an arbitral institution.  In ad hoc arbitration, claimants serve a “notice” of arbitration on the respondent.  These initial documents are conceptually similar to a civil complaint in U.S. litigation.  The opening document identifies the parties, the relationship out of which the dispute arose (including the arbitration agreement), claimant’s main legal claims, and the remedies sought.

As in litigation, respondents in arbitration have a set time period to answer.  This is often 4 weeks, or 30 days.  Unlike civil proceedings, there is no opportunity to seek dismissal of the case at this early stage.

Terms of reference and Procedural Order no. 1

Next, the arbitral tribunal must be constituted.  This step varies between arbitrations, since parties and institutions may influence the method of selecting a tribunal.  If the arbitration is before an institution, that institution generally must confirm the tribunal’s constitution.

After the tribunal is established, it typically meets with the parties.  It sets ground rules and a timetable.  After this “case management conference,” the tribunal typically issues Procedural Order no. 1.

At this stage in ICC arbitrations and in many ad hoc arbitrations, parties and the tribunal enter into a formal agreement called the “terms of reference” (“TOR”).  That document, too, sets forth ground rules.  Also, critically, it defines the scope of the tribunal’s mission.

The selected procedures vary between arbitrations and usually reflect the relative complexity and value of the arbitration.  Simple arbitrations may dispose of a hearing altogether (a “documents only arbitration”).  Or they might limit written submissions. 

Complex arbitrations, by contrast, may require multiple rounds of written submissions.  They might even “bifurcate” proceedings into successive stages (e.g., jurisdiction, the merits, and damages), each with its own hearing and partial award.

The written memorials

The next phase is generally the longest.  Parties submit one or more rounds of “memorials” (essentially, briefs).  Memorials set forth legal arguments and supporting facts.  They are normally filed by each party sequentially.  Memorials are normally accompanied by all documentary and witness evidence on which a party intends to rely.

Often, any permitted discovery occurs between the first and second rounds of memorials.  Document production tends to be more limited than in American court litigation.

Witness evidence typically takes the form of signed “witness statements” (essentially witness declarations).  Depositions and admissions are almost never used.  Parties also exchange expert reports during this stage. 

Hearing & post-hearing proceedings

Once written submissions are in, the tribunal generally holds an oral hearing.  Hearings last, on average, from a day to a couple of weeks.  It depends on the number of witnesses and experts. 

The hearing is often divided into (i) opening statements, (ii) witness testimony (including direct examination and cross-examination), (iii) questioning by the tribunal, and (iv) closing statements.  Following the hearing, parties sometimes submit post-hearing briefs.  These are either in addition to or, more commonly, in lieu of oral closing statements.

Upon receiving any post-hearing submissions, the tribunal closes the proceedings.  In due course, it issues its award.  The speed of decision varies widely.  But it is considered best practice to finalize an award within 3 months of proceedings’ close.  Certain institutions review any draft award before it is finalized.  That process is known as “scrutiny.”

Finally, even after the award is issued, there may be additional arbitral proceedings.  If so, however, they are more limited.  The tribunal might provide additional clarification of its award upon request.  Or it might correct clerical or computational errors in the award.

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These phases are illustrative of the typical trajectory of an international commercial arbitration.  There are many other possible permutations.  Experienced arbitration counsel can help you navigate international arbitration’s seemingly unpredictable process.

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