Arbitration Rules – How Different Are They?

Introduction 

Each arbitral institution has its own set of rules, and in this article we explore the similarities and key differences between some of the most popular institutions with the aim of helping you come to a decision on which arbitration institution to use. We will consider the rules of the ICC, LCIA, SIAC, HKIAC, DIAC, and the SCCA, comparing their rules in relation to several key steps in the arbitral process – starting an arbitration; seat and language; expedited procedure; time for issuing the award; and costs. 

Before doing so, here are some details about the institutions themselves:

• ICC is the International Chamber of Commerce. The ICC was founded in 1919 and the ICC’s International Court of Arbitration was established in Paris in 1923 to provide services in alternative dispute resolution and arbitration. It last updated its rules in 2021.
• LCIA is the London Court of International Arbitration. It was created in1892 and is the oldest of the main arbitral institutions. It last updated its rules in 2020.
• SIAC is the Singapore International Arbitration Centre. It opened its doors in 1991 and last updated its rules in 2016.
• HKIAC is the Hong Kong International Arbitration Centre. It was established in 1985 and last updated its administered rules in 2018.
• DIAC is the Dubai Arbitration Centre, established in 1994. It is the Gulf’s largest alternative dispute resolution center, and last updated its rules in 2022.
• SCCA is the Saudi Centre for Commercial Arbitration. It was established in 2014 and so is the newest of the institutions being reviewed here. It updated its rules in 2023, making it the institution with the most recently revised rules.

Starting an Arbitration

The rules are all similar insofar as how to commence an arbitration. The claimant files a Request for Arbitration (or ‘Notice of Arbitration’ for SIAC and HKIAC) setting out the details of the dispute and their arbitrator nomination, and they will also pay a filing fee. On receipt of the Request and the filing fee, the arbitration is deemed to have commenced and such date is relevant for the purpose of assessing any limitation periods. The opposing party (the Respondent) is then invited to file an Answer. 

With ICC, LCIA, and DIAC arbitrations, the parties file their Requests and Answers with the institution, and it is the institution that then sends it to the opposing party. With respect to proceedings conducted by SIAC, HKIAC and SCCA it is for the Claimant to serve the Request on the Respondent, rather than the institution. 

The time afforded to parties to respond to a Request for Arbitration varies under different rules. Most afford the Respondent(s) 30 days to respond (ICC, HKIAC, DIAC, SCCA). However, the LCIA gives 28 days, and SIAC gives just 14. DIAC provides for a 10-day extension provided the Respondent gives details of their position on the number of arbitrators to be used for the tribunal and their nomination for arbitrator (so that the institution is not delayed in constituting the tribunal). The ICC has a similar provision but does not fix a particular period of extension to be granted. The LCIA states that the Respondent can apply for an extension if needed, whereas other institutions (SIAC, HKIAC, SCCA) are silent on the issue but do not appear to prohibit such applications to be considered on a case-by-case basis. 

When it comes to constituting the tribunal, there are more marked differences:

a. As regards the number of arbitrators, in the absence of an agreement between the parties, most institutions require that there will be a single arbitrator (ICC, LCIA, SIAC, DIAC, SCCA). Under the HKIAC rules it is for HKIAC to decide.

b. The ICC gives 30 days for a party to challenge an arbitrator’s appointment, whereas the other rules afford parties 14 or 15 days.

c. The ICC, LCIA, HKIAC, and DIAC mandate that a sole arbitrator or chair of the tribunal must not be of the same nationality as either of the parties. SIAC and SCCA have no such restriction. 

Seat and Language

The seat (or legal place) of an arbitration is important as it determines (among other things) which national arbitration law applies to the arbitration. Should the parties fail to agree on the seat of the arbitration, the various institutions provide for a default seat: LCIA provides for London; HKIAC provides for Hong Kong; and DIAC provides for the DIFC. As for the others, the ICC provides that it will determine the seat; the SCCA provides that it will determine the seat in the first instance, however the tribunal will make the final determination (having regard to the circumstances of the case and the convenience of such a place to the parties); and SIAC provides that the tribunal alone will determine the seat.

The language of an arbitration is often not a contentious issue, but if it is it can lead to significant translation costs and limit a party’s options when appointing legal representation. The LCIA and DIAC state that it will be the language of the arbitration agreement; the ICC and SCCA state it will be for the tribunal to determine (being guided by the language of the arbitration agreement, as well as other factors); SIAC states it will be for the tribunal to determine; and HKIAC provides that it will be English or Chinese until the tribunal is constituted and can determine the issue. 

Expedited Procedures

Institutions update their rules periodically to ensure alignment with international best practices, respond to technological advances, and ensure they are meeting the demands of users for a quicker, cheaper, and more robust process. A recent development has been the incorporation of expedited procedures into arbitral rules that enable the parties to circumvent the usual procedure and use a truncated process to achieve a quicker resolution.

All the institutional rules considered in this article provide for expedited procedures, but vary in terms of when such procedures may be triggered:

a. ICC: subject to the parties’ agreement, the expedited process can apply if the amount in dispute is less than USD 3 million. An award is expected to be rendered six months from the date of the case management conference.

b. LCIA: the LCIA Court has wide discretion in determining expedited procedures and when they can be used, but the requirement of ‘exceptional urgency’ must be satisfied.  

c. SIAC: the expedited process can apply when the parties agree (or there is exceptional urgency) and the amount in dispute is less than SGD 6 million (approx. USD 4.4 million). The award is typically rendered within six months from the date on which the arbitral tribunal is constituted. 

d. HKIAC: the expedited process can be triggered provided the parties agree to adopt such procedures; or the institution is satisfied as to the requirement of exceptional urgency, or the value of the dispute does not exceed the amount set by HKIAC on the date of the Notice of Arbitration. The website is updated to reflect the amount currently set by HKIAC, which is equal to HKD 25 million (approx. USD 3 million). The award is expected to be rendered within six months from the date on which the file was transmitted to the Expedited Procedure tribunal. 

e. DIAC: the expedited process can be used if the parties agree to it, or there is an exceptional urgency, or if the total value of the dispute (i.e. claims and counterclaims) is AED 1 million or less (approx. USD 272,000).

f. SCCA: the expedited process can take place if the parties agree to adopt such procedures or the total sum of claims and counterclaims is SAR 4 million (approx. USD 1 million) or less. The tribunal is to render its final award not more than six months from the date of the constitution of the tribunal.

Time for Issuing the Final Award

In response to concerns that the time required to issue final awards is sometimes viewed as excessive, a number of institutions have revised their procedural rules to include a specific timeframe by which the award should be issued:

a. ICC: six months from the date of the last signature of Terms of Reference.

b. LCIA: no time limit, but tribunal should try to issue award three months from the parties’ final submissions.

c. SIAC: Tribunal to give draft to Registrar 45 days from close of proceedings; final award to be issued as soon as practicable following Registrar’s comments.

d. HKIAC: three months from the date when the arbitral tribunal declares the proceedings closed.

e. DIAC: six months from when tribunal receive the case file.

f. SCCA: three and a half months from close of proceedings. 

Costs of Arbitration

All of the procedural rules cited above contain provisions to the effect that the tribunal has the power to decide how to allocate costs between the parties, but some offer guidance as to how such authority is to be exercised. The ICC states that the tribunal will consider relevant factors including the conduct of the parties. HKIAC provides that the tribunal will consider relevant factors including any third-party funding arrangements. The LCIA explicitly states that the tribunal is to be guided by the general principle that costs are to reflect the parties’ relevant success and failures in the award. Whereas the SCCA states that the tribunal should take into account the circumstances of the case, including the extent to which each party has conducted the arbitration in an expeditious and cost-effective manner. 

As regards the amount of fees paid to the institution and the tribunal, save for the LCIA which calculates this based on an hourly rate, all the institutions adopt an ‘ad valorum’ method which determines the fees based on the amount in dispute. Whilst the exact fees will be determined by the institution, to give an idea of how they vary here is a rough comparison of the average cost for a three-person tribunal in relation to a USD1m and USD10m dispute (from lowest to highest):

a. LCIA: USD30,000; USD80,000 (according to 2017 LCIA statistics)

b. DIAC: USD100,000; USD265,000 

c. SIAC: USD130,000; USD300,000

d. SCCA: USD130,000; USD370,000

e. ICC: USD140,000; USD400,000

f. HKIAC: USD164,000; USD400,000

Conclusion

In addition to the quality of its arbitral rules, there are a number of factors to consider when deciding which institution is best to use, including the reputed efficiency of the institution; its experience in managing the type and size of dispute that is likely to arise; the strength of its roster of arbitrators; its location; and how well known the institution is to any jurisdictions where you are likely to enforce the award.

Despite the differences highlighted above, it remains the case that the majority of procedural rules are generally aligned with best international practices and as a result, share many key similarities. This harmonization has increased in recent years which is partly driven by competition between institutions as they endeavor to align with the latest innovative rules (such as expedited procedures) or risk falling behind. Nonetheless a number of key differences remain so parties must consider the implications of their choice of arbitral institution when executing arbitration agreements. 

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