Conversations with ICC Australia Episode Fourteen Sean Marriot and Lara Hammoud 20241205 170047 M

themed um conversation with you today uh in case you haven't joined us before the idea of the conversations with ICC Australia series is to meet once a month with the members of the ICC Australia Community to exchange ideas uh to share insights from our different uh experiences and even the jurisdictions that we're working with um and uh today we're very lucky to have with us sea Marriott and hammud um sha and M Lara are both here uh based on their experience in the IC working group on expedited procedure Provisions um Lara is a co-chair of the the working group and Sean is a co-lead on the interim measures track and today they're going to be helping us to look at what issues are raised by interim measures in expedited proceedings and how you can address them so sha uh sha is a partner at hullman Fenwick willan based in Perth and Lara is an arbitrator at arbitra based in Abu Dhabi and uh they're both going to share their insights uh with us today and I'm going to hand over to them uh to do so and uh we will reserve some time at the end for some questions so you can type your questions in the chat already as they come or um we will also prompt you at the end to pose any questions to the speakers directly thank you Sean and Lara over to you thanks Emily and thanks to ICC Australia generally for putting on these great events which I and I think many others are very grateful for the opportunity to participate in and to draw on the knowledge and expertise of an increasingly sophisticated Australian International arbitration community so onto our topic for today um the first to topic um essentially starting by looking at the big picture the overall picture Lara what do you see as the difference between regular International arbitration and expedited arbitration so hello everyone I also want to say that I'm very pleased uh to participate in this uh in this episode um and to meet um Australian uh practitioners um um I would start sh by uh saying that um expedited arbitration has gained uh attraction in in recent years and that's in response to the length and the costs of traditional International arbitration um and today uh most leading arbitral institution have adopted those specific Provisions for expedited procedures uh in their arbitration rules so the instit for example introduced the uh expedite procedure in 2021 and defines it as a streamlined and simplified procedure with a shortened time frames which makes it possible for the parties to reach a final resolution of the dispute uh at a in a cost and time effective manner the IC has introduced in 2017 those expedit procedure and um defines it as a streamlined uh procedure with reduced scales of arbitration fees aimed at increasing efficiency in the resolution of the dispute so um you know the common features and and and the the the the differences with the regular uh arbitration is that usually you have a sole arbitrator uh instead of arbitrator three even if the parties had uh in their agreement agreed to three the ICC rules for example uh Grant the uh Authority or the power to the Court to uh decide to have one arbitrator they are also simplified procedures and that's very important there's a discretion that is given to the tribunal to simplify the procedures in a way that there is limited round of submissions um possible no document production uh no hearing um so uh again simplified uh a procedure and and even the final Awards some rules would you know allow that the award uh is either not reasoned uh or very uh or very with summary reasoning um and uh and hearings may not be held so generally it's less expensive uh and uh um depending on on the rules uh they are usually opt in or opt out now I'll finish with just some statistics since Emily refer to the working group uh although we cannot uh uh say much yet because the the the report is not issued publicly but what can say is that we've looked at 341 cases since the beginning of the EP and we've noted that in those 30 341 cases there were only 18 where there have been expert reports and 70 where there has been document Productions and only one 90 have had short hearings but among those 190 there's a 121 that were hybrid uh we also noticed that the awards were generally delivered on time so I'll stop here I know the time is limited um so uh I'm I'm my turn shown to ask a question now um so what do do you think that the use of uh expedited proceedings by parties are likely to grow in the future based on everything I've said um I think it's uh it's worth starting with a little bit of History uh and then and then to to project project forward the introduction of expedit procedures stem from a consensus or a growing realization that the time and cost associated with arbitration were becoming unduly burd burdensome or more burdensome than they had been um for example the ICC was treating all cases on the same footing so the same set of rules rules applied for all disputes irrespective of their value and complexity whether they're valued at under a million dollar or over a billion dollar which is in a sense opposite the opposite from a from a tailor made proceeding that is proportionate to the amount in dispute however the background is that around 40% of the aggregate ICC case load concerns arbitrations with claims valued at less than $4 million so there's a lot of cases at the at the lower end and while the IC rules do give tribunals um and parties the inherent flexibility to streamline their proceedings on the merits there's there was no default set uh of of rules for resolving cases in a shorter timeline and and of lower complexity so the icc's EXP expedited procedure filled that need now as you mentioned um it was first enacted in in March 2017 and then uh and at that stage it applied to uh cases with the value up to $2 million with optins for other parties then in 2021 the cap was raised to $3 million um for arbitration agreements entered into after that date and again with optional optins for other parties and it's been popular um the expedited procedure uh the ICC expedited procedure has been popular since its introduction there have been a total of uh currently around 7133 uh probably more by now expedited procedures have been conducted and 2023 saw the high Watermark of 189 new expedited procedure cases um and I I think it it's very say it's been successful because it focuses and incentivize incentivizes parties to work towards a short compressed procedure and so the icc's response to the level of interest in exp expedited proceedings has been um that in March 2023 the IC Commission on arbitration and ADR uh announced a new expedite procedure working group and as part of its mandate the the working group was asked to review and report on the experience of exp expedited procedures conducted to date with a view to drawing lessons from emerging expedited procedure practice and uh and to present its conclusion to uh a wide audience of In-House Council external Council arbitration practition practitioners uh arbitrators and and The Wider arbitration community and secondly to prepare a concise guidance note to be used as a toolkit for expedited procedure arbitrators uh to fill in gaps where where the rules did didn't give uh uh them them relevant guidance um and also to prepare um a fact sheet to promote expedited procedures and to Mark the filing over of over 700 expedited procedure cases and also of course to recommend potential improvements uh to the existing expedited procedures and the commission is due to report in 2025 and as and as Emily mentioned Lara and I are both involved in that process as members of of the working group so there's no doubt that expedited procedures have been have been popular and they're growing in their use I think it's fair to say with the with the sort of complexity of energy transition type arbitrations coming up and the multip multiplicity of parties being involved in those dispute proceedings it's likely that they'll be uh they'll be used a lot more in the future um so that's that that's that on that topic so moving on to the next subject Lara um what uh do you see as as as the purpose of interim measures generally in international arbitration yeah thanks Sean um so interim measures um you know constitute an immediate and uh temporary relief as we all know that is aimed at um safeguarding a right uh or an asset pending the determination of of a case on on its Merit so it includes measures to preserve the status quo or prevent uh you know dissipation of of assets um before a final award is issues so it is um you know a strategic new Tool uh that needs uh in my view to be considered carefully but it is useful uh to protect uh A party's rights uh in arbitration proceedings um and is generally available upon the application to the tribunal or uh to the Court's uh um so it's kind of either or and uh the arbitral tribunals are granted the authority to issue interim measures by arbitration rules so the part's agreement to those rules or by arbitration laws and as we all know in the ICC rules it's Article 28 uh that Grant the tribunals um you know that that right as soon as the file uh is is transmitted and it gives as we will see uh you know a large discretion uh to the tribunal to render um to render uh those interm measures now the question uh to you Sean is uh you know how are um such interent measures granted you know I said that they can be TR granted by tribunals or courts could you say a bit more on that yeah well I mean the short answer is that inter measures can be granted by courts or in the same way as they're granted by tribunals in regular arbitral tribunals as courts and tribunals um frequently have concurrent jurisdiction for that purpose uh depending on the Lex arbitr uh courts can provide an alternative source of interim relief for a party in particular court applications for interim relief are permitted expressly permitted under many arbitral rules including under trial ICC lcia and so on um although those rights may be qualified in some cases um interim measures can be granted in the form of an interim award as opposed to a partial award on merits issues and they can arguably arguably be seen as as in that sense as finally disposing of the request for that relief and so on that basis being recognizable and enforceable uh by national courts um the power of the tribunal to order interim measures is also now generally accepted either expressly in National arbitration laws or considered as part of the the tribunal's inherent powers so I I think that gives rise to the question of which should be used tribunals or courts and well broadly speaking uh whether to Grant an interim measure requires an an evaluation and balancing of competing interests of the parties in the context of interim of an expedited procedure uh one such interest is the expeditious resolution of the dispute via the expedited procedure and another is the need for adequate due process and the party's right to a reasonable or full opportunity to present uh their case um if expeditious resolution is given too much weight then this can res potentially result in a blanket exclusion of interim relief and expedited procedures and parties would likely then respond by filing Court applications for inter interim measures which would not support the objective of achieving expeditious uh dispute resolution um also some forms of interm relief are only effective if issued by by courts uh and and parties shouldn't otherwise need to go to court because the that the tribunal uh sorry the arbitral rules limit limit the uh the relief options and in any event uh the final decision on whether to apply for court or to court or a Tribunal for interim measures should be a strategic choice for the parties to make uh because forcing parties to resort to different fora for different types of of relief is is arguably inconsistent with another expedited procedure objective which is the simplification of the procedure um and also in many cases the the uh an expedited procedure tribunal is much better place to decide on the form of interim measure by Tie by tying its um its its timing and validity to the issuing of the final award within the six-month deadline um so it's important for interim measures to be available in expedited procedures so that courts do not conclude erroneously um that the parties have agreed to entirely foro those measures uh uh in return for expeditious resolution ution um that said you know in some jurisdictions courts only have jurisdiction if interim relief is not available from tribunals which may be the case in exp expedited procedures for say preliminary evidentiary uh evidentiary measures so our tribunals generally have the power to Grant interim measures um fettering parties access to those uh to interim relief from courts is also undesirable as arbitral and curial interim relief different scope enforce ability uh and and maybe complimentary um so I I think that that's that that's sort of the sort of overall view on that that that that uh I'd uh I'd put forward um moving on to the next topic um do arbitral institutions expedited procedure expit exposited procedure Frameworks generally provide prescri sorry have I jumped to the wrong question there oh sorry no it's my question to you it's my question to you but but the question was basically if you know is whether you know the institutions um uh EPS uh ep's Provisions expedited procedure Provisions generally provide prospective rules for granting uh interim measures or is usually the decision left to the tribunal discretion so uh how how uh how is the decision basically uh taken by uh the tribunal yeah I think um the general approach is that the rules tend to be permissive rather than prescriptive um which is obviously important given the tight timeline and constraints that the tribunal will be working under and the resulting need and desirability for flexibility um generally tribunal's inherent jurisdiction is arguably sufficient basis for inter relief uh anyway whether the Tribunal deems it appropriate um and and in order to minimize challenges tribunals are also likely to to decide applications based on the usual considerations including irreparable harm reasonable prospects for Success on the merits balance of convenience and damages being an inadequate remedy um as to the individual institutions approach um again generally permissive as opposed to prescriptive the ICC expedite procedure doesn't specifically provide for interim relief but Article 5 says that um in all matters concer earning expedit procedure not expressly provided for the court and arbitral tribunal shall act in the spirit of the regular rules and the expedite procedure itself and the regular rules provide for interim relief at Article 28 as youve mentioned which allows the tribunal to order any interim measure it deems appropriate at the request of a party with any security it deems appropriate in the form of an order or an award and and of course with reasons and the rules don't restrict the right of parties to apply to Courts for for interim measures as well um the Sak expedited rules also don't expressly provide for interim measures and so tribunals can follow uh the ordinary rules on interim relief which provide the tribunal May again at the request of a party Grant any interim relief that deems appropriate in an award or an order and again doesn't preclude applications to court similarly with on trial rules uh they don't expressly provide for interim measures but the ordinary rules obviously do and uh they will they will uh likely be relied on an exception is the akika uh exped procedure rules which do expressly provide for interim measures of protection in article 24 and they permit the arbitrator in appropriate circumstances at the request of a party to order interim measures in an order of reward with reasons and optional security and it specifies the criteria for doing so and that that allows for the usual measures uh such as maintaining uh the status quo avoiding imminent harm preserving assets evidence and providing for security of of costs um so generally the the approach is is a permissive one but there are but there are um Kea and and and uh um perhaps some other institutions which are adopting a more uh structured approach um so moving on to the next topic Lara um if granting interim measures is discretionary discretionary um what are some of the considerations uh that tribunal should take into account in deciding whether to Grant such measures yes um I think um as you said Sean the um usually the rules are uh you know Grand discretion uh to the tribunal and we can discuss later if we have time whether this is good or bad or do we prefer permissive or or um or prescriptive rules but Article 28 as you said gives that discretion to the tribunal um and um in expedited procedures specifically um there are as we said earlier those uh competing interest between you know the expeditious uh resolution of the dispute which is the priority but also the right um of a party to uh to seek and term measures from tribunals and uh we know that interim measures applications may require time and cost so it's kind of a competing interest between um you know the objective of uh the interim measure so the question is to what extent interm measure should be limited uh in uh EPS um or uh alternatively uh one can think uh that as you said Shan in P tribunal exp procedure tribunal maybe better place uh to Fashion the form of uh inter relief um in the you know in in an in an EP uh in expedit procedure uh because there will time it to to to to that exped expeditious timeline of of six months um and um so having said that you know with that in mind there are some specific considerations to take into account when tribunals are using that discretion we discussed uh to order inter measures applying uh um you know the usual balancing of factors um and uh some of the considerations uh are obviously you know due process uh uh due process is the challenge as I said in in EP um H because you do need to You know despite the the the streamlined uh procedure you need to to give the parties equal opportunities to to defend their positions um so it's a fundamental requirement for enforceability uh but uh also the application depends on on on the context um so you know just in terms of of uh of you know example uh you know the tribunal may want to uh fashion the The Briefing on the interm measures to rebalance the fact that the applicant will generally have had more time than its opponent uh you know to to to to prepare um and uh and then the other two to to to respond so these things are these kind of timelines and considerations need to be taken into account to be able to give both the equal opportunity to uh to say what they have to say on the application uh there are um some other considerations with s the the the obviously the whether to to to hold a hearing or not on uh when it comes to the application uh so uh obviously sometimes uh it's uh you know fast and and uh and uh you may save cost when you have a quick uh Paul uh with the parties on uh you know to discuss this application rather than having uh you know written submissions Etc so you may want to consider that uh the timing you know what is the latest time that an an application can be made do we want to uh have a deadline uh but this is taken into account because the later this application is is uh uh raised or submitted you know uh the the more difficult you know uh uh the you know the decision would be in terms of uh abiding by the six Monon um you know deadline of an EP um so those are consideration CHS that I can uh think of but I think you have more uh to add I I see someone Duke um raising his hand I don't know Emil I leave it to you whether we take questions now or we leave it to to the end uh I think maybe we we have Sean's last question and then Doug we'll turn over to you if that's all right okay um I think carrying on from where you left off Lara um there are a few other considerations that Tri tribunals should take into account uh when determining uh whether to Grant whether or not to Grant um interim relief and expedited procedure uh expedited proceedings the first one is urgency and while urgency is not uh necessarily a threshold uh issue for interim measures uh aside from in emergency arbitrator proceedings uh urgency is inevitably a relevant consideration from a practical standpoint when balancing the party's interest in expedit procedures given the arbitrator's obligation to issue the award within six months so the decision on urgency is is is best left to the tribunal's discretion uh taking into account factors such as whether the measure can await the final award which of course will usually occur Ur considerably faster in expedited proceedings than in in regular proceedings um whether the application has been made promptly uh on the applicant becoming aware or when it ought to have been aware of the need for the application again given the compressed timeline and whether the application will delay the award beyond the six-month time limit um another consideration is the type of measure um and the decision may vary based on the impact of the measure there's no reason why the the usual forms of inter should not be available in expedit procedures uh as well as potentially other forms of interim relief for example and some of the ones that have been discussed have been things like under the Dutch emergency arbitration proceedings interim measures can provide binding determinations of issues or be it subject to a final decision by the tribunal on the merits on the other hand um there are some good reasons to limit interim release and expedited proced procedures to only those measures that are compatible with expedited procedures example pre-action document production or other preliminary evidentiary measures um used to assess uh merits prior to Comm commencing pring U proceedings are probably unlikely to be um compatible with an expedited procedure where the imperative is time um and the type of measures also relevant in deciding uh on the timing and form of Remedies um different considerations apply to different measures for example preservation and inspection remedies such as injunction or orders for preservation or inspection of property generally require consideration of the cost and time impact of that measure security of cost applications are a bit different um they require consideration on the level of anticipate anticipated cost as well as the usual security of cost considerations but timing is less of an issue as the order is unlikely to significantly impact the procedural timetable um and then the form uh of the measure and its enforceability uh timeline also need to be taken into account the form of the measure uh will determine its enforceability or or influence its enforceability and may vary per jurisdiction depending on whether the measure is in the form of an order or in an award uh an inter measure in the form of an order um is is likely or maybe completed faster but is likely to be less enforcable uh on the other hand an interim measure in the form of an award May encount in May encounter enforcement challenges based on for example an alleged lack of finality um however this this can also depend on the subject matter for example if an interim measure contains a final ruling or or a ruling on on a contractural issue and also making a decision in the form of an award can potentially impact the timing of scrutiny before the ICC um so a compromise can potentially be to combine both approaches uh where a tribunal combines both approaches and make a provisional order and then inine that in an interim award um the logic being uh that it preserves the best aspects of both methods especially the speed of an order combined with the enforceability of an award particularly where institutional um uh scrutiny is required and the last Point uh I think uh needs to be taken into consideration is reasons for the decision um notwithstanding the the need for um expeditiousness uh where the applicable law or rules require any decision by an arbitral tribunal to be uh a reason in order to be enforceable then W of an interim measure in expedite procedures must be must also be be reasoned um you know it's theoretically possible especially where the need for Relief is urgent for tribunals to issue the decision in an award initially without reasons with reasons to follow later but obviously there are disincentives to that because it comes with with significant risks uh of a challenge based on the lack of reasoning and invalidity of the award um and also uh such such um uh such Awards would potentially Bridge um arbitral laws as well as uh the ICC rules for example which expressly States the need for for reasons um and in any event uh in most jurisdictions Awards must be reasoned unless otherwise agreed by the parties um National laws as well as arbitral institutions require this uh and a good example is the model law uh which requires reasoned award as the default default requirement uh unless the parties agree um uh otherwise uh so if an interim measure is made in an award the award effectively in most cases must be reasoned um it's also uh important to note that the requirement for reasons is not an opportunity for a substantive review of of the award reasons can be high quality they can be low quality but if they're in there the the box is is likely in most cases to be to be ticked um I'm sure there are exceptions to that but generally speaking that's probably correct um another thing that tribunals can do is entally um uh include some guidance in their initial procedural order as to how they will deal with applications and that may disincentivize uh unmeritorious or speculative applications um uh but of course everything they they they put down in that uh in their procedur order may be used as a ground for challenge so I think those there's a lot of things to think about in the process of of determining whether um interim relase should be granted in the course of expedit proceedings thank you so much Lara and Sean and uh this was super interesting Doug did you have a question or a comment that you wanted to put to the speakers I realize we're out of time but I just wanted to ask whether either have the statistics on applications for emergency arbitrator relief in the IC expedited process so we Sean correct me if if I'm wrong but uh we haven't seen uh interim measures in uh the EP um yeah um so um so that's that's that's what we uh we concluded but we do need to um I think come with like final statistics but for now uh we haven't seen uh we haven't seen we're not in a position to say actually that there have been uh any interim measures in those uh EP yeah I guess there may be a distinction slight distinction dug between interim measures and the emergency arbitrator um it may be that the statistics that L refers to was focused on the um former rather than the latter um yeah sorry that question on the latter sorry I I misunder I think Doug was referring to emergency arbitrator proceeding the context of procedure is that is that correct dog have there been and how many have there been applications for emergency arbitrator relief under the expedited rules I don't know all right no I don't that would that would be an eloquent statement of whether the speed of formation of the tribunal under the expedited rules yes obviates the need for emergency arbitrator relief under the ICC rules right great question to be looked at back you on that more work for the working group do we have other question the typical value of the expedited procedure arbitrations that you've seen they're typically up to I mean the the threshold is $3 million but there are optins um and one uh one potential use of expedited proceedings for potentially much larger cases is to use it as an enforcement mechanism of of uh of dispute board decisions where there's a contractual determination but it's not necessarily enforceable that can then be taken to an expedited procedure for a quick for a relatively quick ruling um and uh and used as the basis to procure an award um so I I I I don't know what the typical or the mean or the median level of the disputes but most of them are within the the 3 million threshold uh but there are exceptions uh and yeah there have been some that have been way um like I think there's one with like few hundred of a few yeah uh 10 or 20 million or even higher but those are the parties obviously who had decided to um you know uh revert to um to EPS but as as Shan said is is mainly below 3 million the real attraction of these is for low value disputes so people just go straight to the the point and forget about all the interim stuff just get to a quick outcome that's all they care about isn't it may be I think that that's exactly right but when they find themselves within the proceeding and then something happen there's an event which they don't like uh they may they may decide that their view shifts uh and if they think that the other part is hiding a key piece of evidence or or or or something along those lines then that can be the motivator but I agree I mean if parties are are happy to go into an expedited procedure not they won't they won't be foreseeing using uh interim measures or unlikely they would be any other thoughts from the audience in our bonus time well I think uh we are out of time but uh but Lara or Sean did you want to add anything else um before we sign off for the day I I I I I pose a final question to Lara um from an an in-house legal perspective given your your extensive experience with adnoc and and elsewhere are there any particular considerations that parties um as opposed to their representatives should focus on when considering whether to apply for an interim measure well thank you Shar for your last question um very briefly listen when you're uh I think especially in in in the oil and gas sector where I spent uh 10 years until very recently uh disputes may involve uh you know significant financial Stakes or operational disruptions um and you do need to consider whether an interim measure uh could help avoid the harm uh you think you will be uh caused um and obviously you need to to look at many factors such as you know whether there's an immediate threat uh is there a a reparable harm um and what's the enforceability uh you know of an interm measures uh like but also you know from a business perspective you do need to look at the long-term strategy you know you want to consider how the request aligns with the uh overall legal strategy and more importantly business objectives and you also want to balance you know you know make sure that whether the benefits of of getting the interim measure uh outweigh the potential uh negative uh impact on the other party who may be your partner for had been your partner for a long time and who may continue to be it's really on a Case by casee basis I would say to to to just to conclude that uh in an in the having spent time in nooc for a long time I think you know the top priority where an interm measure could really be considered uh on a case-by Case basis is really when you have you a risk on the production we all know that one day of exploration is worth hundreds of millions of dollars and can cause a lot of disruption to the supply chain Etc so production um is is key and confidentiality with all the uh you know uh the data and uh uh and and everything that is linked to you know uh uh techniques drilling Etc can have you know confidentiality is very important that's something that can trigger a real consideration and obviously the reputational damage that is very you know often linked to environmental issues so I would say those are really important uh risks where uh an nooc may consider you know going for inter measures again on a caseby casee basis but Emily just to thank you just to also um uh say uh if you words I just wanted to thank you for inviting me but also to say that the working group is submitting the report to the ICC commission uh for approval in April uh next year at the IC commission um and so it should be then um obviously available uh to the to the public for those who haven't read the draft yet fantastic we very much forward to that and congratulations to you both for for all the really interesting uh work that you've done on the working group and thank you uh for sharing some of the issues with us even if we can't yet read the the final product um but it's a good sneak peek and uh thank you everyone for joining us today and this was the last episode of conversations with ICC Australia for 2024 and uh we'll obviously be arranging new episodes in the new year and we look forward to having you again then and thank you very much again to Lara and Shan for joining us and for your time thank you all thank you Sean thank youbody nice to see you bye