NPAC's Arbitration Review: ‘Documents-only’ Arbitration - An effective mechanism for the expeditious resolution of disputesJuly 22 2019
Lim Seok Hui
Procedural flexibility is a hallmark of arbitration. Arbitration allows parties to choose the most suitable procedure to achieve an expeditious and cost-effective resolution of their disputes.
Generally, high-value and complex disputes require a fairly standard arbitration procedure – this usually involves three arbitrators, two rounds of pleadings, document production, examination of witnesses, an oral hearing and post-hearing submissions. However, low-value or less complex disputes may not necessarily warrant the standard procedural steps. Depending on the value and complexity of a dispute, it may be appropriate to choose from different procedural innovations to significantly reduce time and costs.
One example of an innovation that is gaining traction for straightforward, mid-to-low value disputes is ‘documents-only’ arbitration. In a documents-only arbitration, the parties agree for the dispute to be determined without an oral hearing. Accordingly, a tribunal (which may consist of a sole arbitrator) reviews the written documents submitted by the parties, but it does not receive oral pleadings or testimony at an evidentiary hearing before making the award. Written documents may include pleadings, evidence, and statements of witnesses. A documents-only arbitration may be especially useful in cases where there is no need to cross-examine any witnesses.
Proceeding without an oral hearing enables a tribunal to render its award within a shorter time-frame and eliminates the high costs typically associated with a hearing, including travel costs for the tribunal, lawyers and witnesses. Documents-only arbitrations also generally enhance efficiency and convenience given that travel is not required and email is the primary means of communication.
Like procedural flexibility, party autonomy is a key element of arbitration. In any case that proceeds on a documents-only basis, it is essential that all parties agree to the adoption of the procedure. Thus, an arbitration may proceed as documents-only in the following scenarios:
- where the arbitration rules incorporated in the arbitration agreement provide for the possibility of the tribunal making its decision without a hearing and none of the parties requests an oral hearing;
- by parties’ consent as set forth in the arbitration agreement; or
- where, after the dispute has arisen, the parties agree to proceed on a documents-only basis.
By submitting to documents-only arbitration, the parties waive their right to be heard in person, to cross-examine witnesses and experts, and to conduct oral argument. They undertake to rely solely on written submissions to plead their case. This will understandably raise concerns among some parties that a documents-only arbitration limits their ability to thoroughly argue their case. In reality, however, the vast majority of arbitrations are document-centric, and in many cases, the parties are able to plead their case through written submissions alone. An oral hearing may not necessarily provide any additional benefit, but would conversely require a significant investment of time and resources.
Parties faced with low-to-mid value disputes should consider whether the benefits of a documents-only arbitration -- reduced costs and increased efficiency – outweigh the perceived benefits of an oral hearing. In many cases, a documents-only procedure makes pursuing smaller claims more cost-efficient for parties. It provides parties with an innovative tool to manage time and costs while maintaining their right to be heard in a neutral forum.
About the Author: Lim Seok Hui is the CEO of the Singapore International Arbitration Centre
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