11/3/2021
On September 19, 2021, the new expedited arbitration rules of the United Nations Commission on International Trade Law (“UNCITRAL”) entered into force. Rules of this nature have become increasingly popular due to the benefits provided to litigating parties, such as saving costs and time, without compromising the due process of law. For no other reason, several arbitration chambers, both national and international, have already established their own sets of rules on expedited arbitration.
UNCITRAL rules, however, differ in the sense that their creation process involves the participation of 60 countries, international organizations, non-governmental organizations, practitioners and academics. There is, therefore, an incomparable representativeness and diversity, which guarantees a truly comprehensive, transparent and high quality final product.
Among the main features of this new normative instrument, it is noteworthy that its application relies exclusively on the express consent of the parties (which can be revoked at any time), which prevents its accidental adoption by less experienced players. Furthermore, these rules can be applied to any type of arbitration proceedings, not limited to any financial nor any other objective criteria.
Secondly, the rules grant arbitrators broad powers to conduct the proceedings according to their discretion, with a view to ensuring its reasonable duration. Thus, they can adopt measures such as dismissing hearings and establishing remote communication channels between all parties involved.
Thirdly, the UNCITRAL rules authorize the Permanent Court of Arbitration to assist in the appointment of arbitrators. Subject to the will of the parties, that institution may be responsible for appointing arbitrators in cases of lack of consent between the parties. Since this is one of the most critical and sensitive steps of the entire procedure, it is extremely advantageous that the parties can count on the support of an experienced and prestigious institution to avoid any problems.
Finally, the expedited arbitration rules impose a maximum period of 6 months for the award to be rendered, counted from the constitution of the arbitral tribunal/confirmation of the appointment of the sole arbitrator. Extensions are exceptional and are allowed only on two occasions: first, to extend the original deadline to 9 months, at the discretion of the arbitrators; second, to establish a final non-extendable deadline, subject to authorization by the parties. This allows greater control over the maximum duration of the proceedings and allows the parties to better provision their costs and risks.
The entry into force of these rules, therefore, is worthy of commemoration. The arbitration community now has a set of rules applicable to ad hoc arbitration proceedings that guarantee their swift and cost-effective conduct. Furthermore, because they apply more adequately to less complex proceedings, such rules are an excellent alternative for arbitrations conducted remotely, which have become a frequent reality in the context of the COVID-19 pandemic.
Author: Felipe Lima Matthes
