On 1 June 2023, Ljubljana Arbitration Centre at the Chamber of Commerce and Industry of Slovenia (LAC) launched its new Arbitration Rules (2023 Rules). The 2023 Rules shall apply to all proceedings where the request for arbitration is received by the LAC on or after 1 June 2023.
In this post, I will overview some noteworthy provisions the parties and arbitrators should keep in mind arbitrating under the 2023 Rules.
Over the years, arbitration has become and remains to be the preferred method to resolve cross-border disputes. However, more often than not, the parties name costs as one of the "worst characteristics of arbitration". To address the stakeholders' concerns, the 2023 Rules introduced several provisions aimed at enhancing the cost-efficiency of the proceedings.
Fist, the 2023 Rules now require the arbitral tribunal to hold a case management conference "promptly" after "the transmission of the file". The purpose of a case management conference (CMC) is to "adopt procedures enhancing the efficiency and expeditiousness of the proceedings".
In comparison to the hearings, the arbitral tribunal enjoys a broader discretion as to the mode of the CMC and may direct it to be held "in person, by video conference, telephone or by any other means". The 2023 Rules do not require the arbitral tribunal to consult the parties on the mode of a CMC, however, it is a good practice to do so.
Although the drafters' decision to make a CMC mandatory is not immune to criticism (e.g., there is usually little benefit in holding a CMC, if the respondent is uncooperative), the importance of the CMC cannot be underestimated. The CMC may assist the arbitral tribunal and the parties in narrowing down the issues in dispute and tailoring the procedure accordingly.
There are various approaches to CMC among arbitrators: some would prepare a draft PO1 and circulate it for the parties' review following the CMC, others would use the CMC to discuss the parties' comments to the draft PO1 communicated in advance. Generally, I am a proponent of the second approach.
Following the transmission of the case file from the secretariat, I draft PO1 based on the parties' initial statements and submissions (i.e., request and answer) and communicate it to the parties. Once the parties have had an opportunity to comment on the draft (typically, 5 days is sufficient), I schedule the CMC. Doing so proved to be the most efficient.
Second, the 2023 Rules now expressly authorize the arbitral tribunal to hold hearings "remotely by videoconference, telephone or other appropriate means of communications". The 2023 Rules require the arbitral tribunal to take the decision on the mode of the hearing in "consultation with the parties, and taking into account all relevant circumstances of the case, including the legitimate interests and expectations of the parties".
The relevant circumstances may vary from one case to another, however, a decision on the mode of the hearing would inevitably be a result of a balancing exercise: cost-efficiency v. due process considerations. Although the arbitral tribunal is not arguably bound by the parties' statements and submissions on the issue, the tribunal's decision should not hinder the party's ability to present its case. Otherwise, the award would be at risk of being set-aside and/or not recognized and enforced. The ICCA Report on the right to a physical hearing would be of assistance to arbitrators.
Many arbitrators and parties tend to forget a difference between confidentiality and privacy of arbitral proceedings, the difference of great import. While the arbitration process is always private, unless the parties agree otherwise (see e.g., 2023 Rules, Art. 32(4)), the arbitral proceedings may not necessarily be confidential. This would largely depend on the applicable lex arbitri. Recognizing that arbitration laws are often silent about the confidentiality of the proceedings, institutions tend to include express provisions to that effect in their rules. The LAC is not an exception.
The opt-out confidentiality undertaking under the 2023 Rules is quite broad: it, among others covers "any information concerning the proceedings", including their existence, and binds "the parties ... the arbitrators, the administrative secretary ... any expert appointed by the arbitral tribunal ... LAC, members of the Board and the Secretariat". Two further observations can be made.
First, the confidentiality undertaking does not apply when the disclosure of otherwise confidential information or document is "required of a party by a legal duty or to protect or pursue its legal rights or to enforce or challenge the award". While the confidentiality regime exception mentions a "party" only, it is suggested that it applies to other persons bound by the undertaking (i.e. arbitrators, secretary, etc.).
Second, since the 2023 Rules distinguish "a party" and a party's appointed representative, as well as party-appointed experts and tribunal-appointed experts, it might be advisable to include in PO1 wording requiring the parties' to seek comparable confidentiality undertaking from these participants in the proceedings. The same applies to witnesses and ancillary services providers (e.g. court reporters).
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Ljubljana Arbitration Centre is an independent arbitration institution established under the Chamber of Commerce and Industry of Slovenia. Tracing its history back to 1928, the Ljubljana Arbitration Centre is one of the oldest institutions in Europe. The Centre offers a full suite of alternative dispute resolution services, including arbitration and mediation, and provides administrative support to ad hoc proceedings. To learn more about Ljubljana Arbitration Centre visit: http://www.sloarbitration.eu/en/.