In recent years, users and practitioners of international arbitration have raised criticism as regards the length of the arbitration proceedings. Insofar as businesses strive for efficiency, several national arbitration acts and institutional arbitration rules have provided for fast track arbitration (also known as expedited arbitration).
● The Geneva chamber of commerce and industry was the first arbitral institution to introduce rules for expedited procedures in its arbitration rules of 1992, and in 2017, the international chamber of commerce introduced an expedited procedure in its arbitration rules.
● Fast track arbitration can be defined as a full arbitration process compressed into a shorter period for a quicker resolution of the dispute.
● The conditions for the application of a fast-track arbitration vary in each jurisdiction and arbitral institution but have notably in common to apply when the amount in dispute does not exceed a certain threshold.
● Parties can also “opt-in”7 or “opt-out” of this procedure and a fallback provision is often provided for in most national arbitration acts and arbitration rules.
Fast track arbitration should be distinguished from emergency arbitration, which is also a compressed procedure allowing a party to apply for urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal. Such measures, and contrary to an award issued under a fast track arbitration, does not have a res judicata effect.
Fast Track Arbitration in India.
The recommendation by the 246th Law Commission Report regarding the introduction of an expedited process of arbitration came in through the Arbitration & Conciliation (Amendment) Act, 2015 (“Amendment Act, 2015”) under Section 29A and 29B.
● Under this provision, notwithstanding anything contained in the Act, the parties may opt for fast track arbitral proceedings where a sole arbitrator must deliver the arbitral award within six months of the appointment of the arbitrator.
● An “opt-in approach”, wherein parties to an arbitration agreement can apply for dispute resolution through a Fast Track Arbitration by agreeing to the same in writing, at any stage before or at the time of appointment of Arbitral Tribunal
● The procedure adopted is generally restricted to document only proceedings, with oral hearings requested by the arbitrator only when necessary.
● The arbitrator calls for further information or clarifications from the parties along with the documents and pleadings submitted.
● Section 29A (3) to (9) of the Act mentioning the time-limit for the passing of an Arbitral Award shall apply to passing of arbitral awards under the fast track procedure.
● The parties may consent to extend the period for making an award to a period not exceeding 6 (six) months.
● If the award is not made within 6 (six) months or within the extended time period, the mandate of the arbitrator shall terminate unless the Court has extended the time period.
● If the Court finds that the delay is due to reasons attributable to the Arbitral Tribunal, then it may order for a reduction of up to 5% fees of the arbitrator for each month of delay.
● While extending the time period, the Court may substitute the arbitrator responsible and the arbitral proceedings shall continue from the stage already reached before the substitution of the arbitrator.
● The Courts are not empowered to impose the process of Fast Track Arbitration upon the parties.
● The amount and manner of payment of fees is to be agreed between the arbitrator and the parties.
Furthermore, the Indian Arbitration Clauses referred to in Rule 44 discuss the fast-track procedure in which the Parties may opt for Fast Track Arbitration and request that the arbitral tribunal decides on the matter within a fixed time frame of 3 to 6 months prior to the commencement of the arbitration proceedings. Here the arbitral tribunal can only decide the matter based on a written pleading without any oral hearing and can also call for clarification. An oral hearing may be held if both parties make a joint request or if, in any particular case, the arbitration tribunal deems an oral hearing necessary and the tribunal shall hear it with all measures to proceed with it promptly.
RELEVANT CASE LAWS
In the case of Hamara Pump Mithoura HPCL Petrol Pump v. Chairman-Cum-Managing Director Hindustan Petroleum and Ors. [2018 (1) ADJ 363], a dispute between the parties was referred to arbitration. The Applicant made an application regarding appointment and continuance of the arbitrator and prayed for a direction of Fast Track Arbitration to be adopted by the appointed arbitrator.
● The Allahabad High Court disposed of the prayer for Fast Track Arbitration proceedings under Section 29B of the Act. It concluded that the said prayer was premature.
● The High Court held that there must be a consensus between the parties to the fast track procedure of arbitration. In absence of a mutual agreement between the parties for the same, the Court cannot direct the parties for a Fast Track Arbitration. It also noted that the Court did not reach the stage of constituting an Arbitral Tribunal and hence, could not direct for fast track proceedings.
The case referred before the Delhi High Court of Crayons Advertising Private Limited v. Bharat Sanchar Nigam Limited [2018 (2) ArbLR 252 (Delhi)] was regarding a dispute between two parties being resolved by arbitration.
● They appointed an Arbitrator to conduct the proceedings as per the Fast Track Arbitration under Section 29B of the Act with the consent of both the parties.
● The Arbitrator, however, failed to pronounce an award within 6 (six) months which led to the expiry of the Arbitrator’s mandate on 30th May 2017.
● The Petitioner did not give consent for an extension of the time period for making the Arbitral Award but rather, filed an application on 25th August 2017 intimating the mandate of the arbitrator stood terminated by efflux of time and recorded its disinclination to consent for an extension of the time period.
● The High Court held that consent of both the parties is required to extend the time period for making an award. In the absence of mutual consent, the mandate of the arbitrator was terminated and the Court appointed a fresh Arbitrator to continue with the proceedings between the parties.
To sum up, fast track arbitration is a time and cost-efficient procedure that could flourish notably in the construction and trade industries without, in principle, hindering the viability and/or the enforceability of the award.