Source: https://globalarbitrationreview.com/chapter/1175277/the-initial-hearing
Timestamp: 2019-05-21 00:34:51
Document Index: 717070958

Matched Legal Cases: ['Art. 20', 'Art. 35', 'Art. 19', 'Art. 35', 'Art. 18', 'Art. 7', 'Art. 25', 'Art. 14', 'Art. 18', 'Art. 17', 'Art. 16', 'Art. 25', 'Art. 21', 'Art. 18', 'Art. 23']

Juliet Blanch: ‘An initial hearing is generally worth the investment’
J William Rowley QC: A good initial hearing always pays dividends
Stanimir Alexandrov: Be reasonable!
John Townsend: The case will be run the way the chair wants
Donald Francis Donovan: Always be advocating
Doug Jones AO: ‘The best advocacy is a collaboration’
Stanimir Alexandrov: Set back-up hearing dates at the same time as the rest of the calendar
Bernard Hanotiau: Respect the IBA evidence rules
Bernard Hanotiau: Equality does not mean deadlines should be identical
Henri Alvarez QC: Some general rules on how to make a better first impression
David W Rivkin: Remember: creativity requires full understanding
Virtually all the major international arbitration rules provide arbitral tribunals with enormous discretion to conduct proceedings, subject only to the obligation to treat the parties fairly and impartially and to provide them a reasonable opportunity to present their case.
Hence the importance of the initial hearing. If one may speak of the ‘art’ of international arbitration,[2] the initial hearing presents the tribunal and parties with a blank canvas and full palette of procedural possibilities. At the initial hearing, the parties provide their views as to how the case should proceed; choices are made; and the case begins to assume its particular character. However it is labelled under the various rules – ‘case management conference’, ‘preparatory conference’, ‘preliminary meeting’ or ‘pre-hearing conference’ – the initial hearing, which typically takes place shortly after the appointment of the tribunal, and the procedural order that usually follows shortly thereafter, not only results in a comprehensive plan for the proceedings but also may significantly define the issues to be decided.
The careful advocate therefore approaches the initial hearing with considerable care and preparation, and a clear idea of how he or she wishes to see the entire case ultimately resolved.
Whether or not there is an initial hearing, parties should make every effort to reach agreement between themselves as to procedure and timetable. Where agreement cannot be reached, a tribunal is not oblivious to which party has been obstructive.
This chapter first provides thoughts on how counsel might best to approach the initial hearing and then discusses particular issues that often arise at the hearing.
Preparation for the initial hearing should begin when counsel first starts preliminary discussions with the client and drafting the initial pleading. Prior to the initial hearing, counsel should consider the strengths and weaknesses of the client’s legal position, evidence and important witnesses, and develop a preferred roadmap for the entire proceeding well before the initial hearing. Does the client wish to expedite or delay resolution of the case? If the former, are some issues important to final resolution subject to summary determination at an early stage? Is it desirable that the tribunal make certain decisions – for example, regarding applicable law, jurisdiction, interim relief, security for costs – prior to full evidentiary submissions? Is it in the client’s interest that there be extensive or minimal exchange of documents? When should this exchange take place? Should the claimant make the first evidentiary submission, or are simultaneous submissions preferable? How many witnesses? Experts (and, if so, on what topics)? How many hearing days?
Over the last 20 years the appetite for an early, first meeting in person between the tribunal and the parties appears to have diminished. The difficulties of finding an early date that works for counsel, representatives and members of the tribunal, along with cost, are often cited.
But where the parties, their counsel and members of the tribunal come from different cultures; counsel and the tribunal have not previously worked together; and agreement on timetables and procedures is not apparent, holding a meeting in person will almost always pay big dividends.
Not only is it easier to forge agreement or establish a timetable and procedures when all are present, and have been heard, but an early first meeting allows the tribunal to take the measure of counsel (and vice versa) and to establish control. And if the occasion is used properly to discuss all the normal matters that are covered in a well thought out Procedural Order No. 1, the resulting order and directions will go a long way to ensuring that neither the parties nor the tribunal face surprises as the arbitration develops. One of the most important ingredients of a good arbitration is that all participants understand what is expected of them at each stage of the proceeding.
Reaching agreement with the opposing party in advance of the initial hearing
Often, the tribunal or arbitral institution will invite counsel prior to the initial hearing to consider a list of issues to be discussed at the hearing. Many institutions have guidelines or policies regarding the initial hearing.[5] In cases under the arbitration rules of the International Chamber of Commerce (ICC), the ‘case management conference’ typically includes discussion of the ICC’s Terms of Reference and a separate ‘procedural timetable.’[6] One of the most comprehensive lists of issues to be discussed at the initial hearing is one of the first such lists published: the United Nations Commission on International Trade Law Notes on Organizing Arbitral Proceedings (UNCITRAL Notes), issued in 1996.[7] The UNCITRAL Notes remain a useful checklist for an initial hearing agenda. Some arbitrators find it useful to distribute to the parties a form Procedural Order No. 1 prior to the hearing as a basis for party discussion.
It is advisable for the parties to reach agreement on as many procedural issues as possible in advance of the initial hearing. The initial hearing is the time in which the parties and the tribunal are first meeting each other. It does not create a favourable first impression about the reasonableness of the parties or counsel if the tribunal must devote significant time to resolving ministerial procedural issues on which reasonable parties ought to be able to agree.
Tribunals and institutions typically encourage parties to attempt to agree on procedural matters prior to the initial hearing. The parties may be asked to advise the tribunal jointly prior to the hearing as to the points on which they agree and separately as to points on which they disagree. Arbitrators generally prefer to defer to the parties regarding procedural matters, not only in deference to ‘party autonomy’ but also because arbitrators assume at this early stage that the parties are better positioned than the tribunal to know how the matter should best proceed. Indeed, the tribunal may know very little about the case – depending on the applicable rules and the parties’ initial tactical choices, the pleadings may be very summary, accompanied by little or no evidence.
Even if not requested to do so prior to the initial hearing, counsel should nevertheless consider issues that are likely to arise at the hearing and whether it is advantageous to reach out to opposing counsel to seek agreement on certain matters.
Of course the parties themselves may have very different ideas about the conduct of a particular arbitration. Counsel from different jurisdictions, particularly if one or both counsel teams have more experience before national courts than international arbitral tribunals, may have opposing views regarding exchange of documents, examination of witnesses and other matters that significantly affect proceedings. If the parties are in dispute regarding issues of particular importance, counsel may wish to consider making a short written submission to the tribunal on the disputed matters prior to the initial hearing, or even request a pre-hearing schedule for submissions, to ensure that the tribunal has the positions of the parties prior to the initial hearing. Limited briefing of disputed issues after the preliminary hearing and prior to issuance of the first procedural order is also common.
There are obvious benefits to a face-to-face initial hearing for the tribunal and counsel. However, if the arbitrators and counsel reside in different parts of the world and physical hearings are not practical, it is common to hold initial hearings by telephone or video conference.
In some cases, it may be useful to have party representatives also attend the initial hearing.[8] As an advocate, I generally prefer to have the client present, as I believe that this facilitates the client’s understanding of the process and may help communicate to the tribunal important client interests, particularly if there is some urgency in resolving all or part of the case.
Below is a list of issues typically addressed at the initial hearing. As stated above, some arbitral institutions have guidelines or policies regarding the issues to be addressed in the initial hearing, which of course should be consulted if applicable.
The place of arbitration – or legal situs – can be of critical importance. The place of arbitration usually determines the applicable procedural arbitration law – which governs the enforceability of the arbitration agreement and the arbitrability of claims – as well as the national courts that will be available to support (or, in less fortunate circumstances, frustrate) the arbitration and serve as primary jurisdiction for enforcement under the New York Convention.
Typically, the place of arbitration will be resolved prior to the initial hearings either in the arbitration agreement or, in some cases, by the arbitral institution.[9] In the event the place of arbitration has not been determined, this issue should be addressed at the initial hearing and a procedure established for promptly resolving the issue.
The possibility of hearings or other meetings outside the place of arbitration may also be discussed. Arbitration rules typically provide that the tribunal can hold hearings outside the place of arbitration.[10]
Usually, the parties will have agreed on particular arbitration rules in their arbitration agreement or by subsequent agreement prior to the initial hearing. However, in the rare case in which the parties have not agreed on rules, the subject must be addressed at the initial hearing. Since the tribunal is already in place, the parties typically will not be in a position to use institutionally administered rules and must choose between existing ad hoc rules (e.g., the UNCITRAL Rules) or tailoring a set of procedures to the particular case. Obviously, reaching agreement at the outset of a dispute regarding bespoke rules requires considerable cooperation between the parties, which may be difficult to achieve in a contentious dispute. Crafting bespoke rules is not for inexperienced arbitration counsel or the faint of heart: ‘pathologies’ often lurk in such efforts that result in delays, additional costs and, in the worst cases, endanger enforcement of the award. Counsel and tribunal drafting their own rules must be, or become, familiar with any mandatory procedural rules under the national law of the place of arbitration.
Disputes regarding applicable procedural and substantive law should be identified at the initial hearing and a process determined to decide these matters. Depending on the importance and complexity of the issues – which can be quite complex indeed[11] – it may be appropriate for the tribunal to resolve the governing law as a threshold issue.
The language of the proceedings can have a significant effect on the conduct and cost of an international arbitration. If the parties can not agree on the language, most rules provide that the language will be determined by the tribunal.[12]
In the event, as would be hoped, that the parties have agreed (in their arbitration agreement or subsequently) on the language of the arbitration, a number of questions still arise that should be considered at the initial hearing. Generally, translation of documents originally in languages other than the language of the arbitration is not required at the time of the initial exchange between the parties but only if and when a document is submitted as evidence – and then only in relevant part. Consideration should be given as to whether there will be oral presentations or testimony in a language other than the language of arbitration. If the arbitrators and counsel are unable to work in the other language, and interpretation is required, it must be decided whether there will be simultaneous or consecutive interpretation. Simultaneous interpretation is much preferred but more expensive. If presentations or testimony are permitted in a language other than the language of the arbitration without interpretation, and there is to be transcription of proceedings, it must be decided how the transcript will reflect statements made in languages other than the language of the arbitration. The preliminary order may also reflect how corrections in the transcripts are to be made and translators and interpreters are to be retained and paid.
The effective advocate should think of every contact with the tribunal and opposing counsel as a moment of advocacy. That does not mean that the advocate is argumentative, or seeks to argue points not called for at the time. It does mean that from the very beginning of the case, the advocate should be looking to demonstrate an intention to cooperate and engage. For an advocate, credibility is all, and that credibility should extend to earning the tribunal’s confidence that the advocate is looking to be constructive in organising the case and prepared to be reasonable in working out disputes. The credibility earned by effective advocacy on the procedural aspects of the case will pay dividends on the merits.
Many tribunals begin the initial hearing by giving counsel an opportunity to summarise the respective claims and arguments of the parties, to inform the arbitrators of the factual context of the matter and highlight the main issues in dispute. Although these presentations are often relatively short and informal, they are often the first opportunity for counsel to orally address the tribunal. Counsel should prepare this presentation with some care as it is always important to have a consistent narrative throughout the proceedings. Particularly in a smaller case, counsel may not have another opportunity to speak to the tribunal regarding the merits of the dispute until the evidentiary hearings.
Tribunals may also enquire whether the parties intend to amend their initial pleadings. Some tribunals may ask the parties to consider whether they wish to prepare a stipulation of uncontested facts prior to the initial hearing.
‘The best advocacy is a collaboration’
In the art of persuasion, the adage ‘brevity is the soul of wit’ rings true. Too often is the persuasive value of a case diminished by diligent advocates who, in seeking to advance their client’s interests to the fullest, obfuscate the key elements of a claim with arguments and evidence on peripheral facts and issues. Advocates must avoid ornamenting pleadings with irrelevant facts, or unnecessary detail, propensities that distract from the real issues in dispute.
The best advocacy is achieved with collaboration between arbitrators and counsel. Arbitrators should engage with parties at an early stage of the proceedings to identify the issues that remain genuinely in dispute, and encourage the focusing of submissions and evidence (whether lay witness, expert or documentary) on only those issues. It is ultimately in the interests of all parties to exercise brevity in arbitration. Succinctness in pleadings will allow the tribunal to reach the crux of the matter in an economic and expeditious manner. Where the parties positively engage with these case management practices, counsel will be able to tailor the presentation of their client’s case to the key issues, and thus present their case most persuasively.
Written and evidentiary submissions; communications among parties
and arbitrators
Set back-up hearing dates at the same time as the rest of the calendar
It is always advisable for parties to agree on a procedural calendar, including potential dates for a hearing, and then confirm those dates with the tribunal. When considering hearing dates, however, it is also advisable for the parties, together with the tribunal, to set back-up hearing dates at the same time that they set the rest of the calendar for the case. With the number of counsel and arbitrators involved in a hearing, it is not unusual for something to come up during the course of the case that might justify changing previously agreed filing dates, etc. If the parties have identified back-up hearing dates with the tribunal at the start, they are less likely to have to go through the difficulties of rescheduling at the last minute, which may lead to split or significantly delayed hearings.
Other matters to be considered include consequences of late submission of documentary evidence; whether the parties will submit jointly a single set of documentary evidence (or bundle) prior to the hearing; presumptions and timing of objections regarding origin and receipt of documents; page limits on written submissions; and such matters as paper and font size, whether written submissions are to include hyperlinks to fact and legal exhibits, and protocols as to how the parties are to communicate with each other and the tribunal.
Any on-site inspection contemplated should also be discussed at the initial hearing, as should arrangements regarding presentation of physical evidence.
Although parties and counsel from civil law and common law jurisdictions may have differing views regarding exchange of documents in international arbitration (and there may be significant differences between experienced international arbitration counsel and counsel more familiar with domestic litigation), there is a general consensus that the IBA Rules on the Taking of Evidence in International Commercial Arbitration (IBA Rules) provide appropriate guidance in most cases.[15] Although it may seem counter-intuitive to lawyers trained in common law jurisdictions, significant efficiencies may sometimes be achieved if the parties wait until after the first round of evidentiary submissions to engage in document exchange. The initial evidentiary submissions may significantly focus the issues in dispute and narrow the scope of subsequent document requests.
There is no longer any arbitral procedure in which the parties do not file one or several requests for extensions of time. It is therefore essential that in the procedural calendar they agree on deadlines which are reasonable and comfortable, and that they will be able to strictly respect. The parties should also be reminded that the principle of equality does not mean that the deadlines for each party be identical. It only implies that they both have equal opportunity to adequately present their case.
Requests for extensions of time should remain exceptional, duly justified, and made well in advance of the deadline and not the day before. They are not problematic if they are limited to a few days. On the other hand, they generate problems if they imply a postponement of the hearing dates. At a time where institutions put a lot of pressure on arbitrators to strictly comply with short deadlines, the parties should do the same and therefore avoid requesting extensions which have the effect of disrupting the tribunal’s own organisation.
One or more parties may argue at the initial hearing that the case, or a significant part of the case, can be resolved by a partial award on the basis of legal submissions and documents, without need for an evidentiary hearing – or after limited evidentiary hearings on a dispositive matter such as jurisdiction or statute of limitations. In such cases, it is often advisable to schedule final evidentiary hearings, so that the dates are reserved and available if necessary.
Use of witness statements in place of direct examination is now common in larger international arbitration. Typically, witness statements will be submitted with the first substantive pleading (the statement of claim or first memorial). The procedural order should provide the date – sufficiently in advance of the hearings – by which the parties will state which of the adverse party’s witnesses it intends to cross-examine. In the event, particularly in a smaller case, witness statements are not required, a date should be established for notification of the identity of any witnesses a party intends to present.
In the event, as is common, the parties intend to appoint expert witnesses, expert reports are often scheduled to accompany the other evidentiary submissions. Counsel may find it useful to enquire at the initial hearing if the arbitrators wish to have the experts meet prior to the merits hearings to identify areas of agreement and disagreement or to have expert witness conferencing at the merits hearings. Witness conferencing, in particular, may affect the parties’ choice of experts.
In approaching the initial hearing, it is important to know your tribunal and its legal background and general approach to arbitral procedure. This will often be of assistance in advocating for specific procedural steps or rules which will be helpful to the presentation of your case. Consider issues such as interim measures, document production and privilege and confidentiality in advance of the meeting and whether and how to best provide for them.
Generally speaking, it will be helpful to have discussed and, where possible, agreed upon the general procedure with counsel for the other side in advance of the initial hearing. This will permit a more orderly initial hearing and allow counsel to focus on the areas where there are differences between the sides. A well-prepared, reasonable approach in respect to these items in dispute may yield significant benefits.
If a respondent is concerned that the claimant, if unsuccessful, will be unable to pay the costs of arbitration, the respondent may wish to consider if it has an interest in making an application for security for costs. The parties and tribunal can consider at that time whether additional information from the claimant is necessary for such an application and, if so, when it should be provided.
In ad hoc arbitrations it may be useful to discuss at the initial hearing and establish in the first procedural order communications protocols for administrative matters such as tribunal compensation and the amount and management of cost deposits. Often, ad hoc tribunals will seek agreement of the parties to use an arbitral institution for these services.
Also, the initial hearing is a good opportunity for the tribunal to inform the parties if it wishes to use a secretary. If the tribunal is proceeding under rules of an arbitral institution, or if an institution is providing administrative services in an ad hoc case, it may be useful for the parties to advise the arbitral institution, rather than the tribunal, of any concerns the parties may have to the use of a tribunal secretary (e.g., regarding secretarial duties or compensation), to permit counsel to provide views on these issues without attribution.
Conduct of counsel; reference to the IBA Guidelines on Representation of Parties
Application of national ethical codes is uncertain in many international arbitrations, particularly where the arbitration is sited in a jurisdiction in which counsel are not licensed.[20] The IBA’s Guidelines on Party Representation in International Arbitration, issued in 2013, are intended to create a level playing field where parties and counsel may have different ethical norms that may affect the integrity and fairness of the proceedings. The IBA Guidelines address such matters as identification of party representatives; counsel conflict of interest; document retention and production; and counsel communications with the tribunal, experts and witnesses. The IBA Guidelines also provide means for tribunals to provide sanctions for counsel misconduct. Since the IBA Guidelines apply only if agreed by the parties, it may be useful for the tribunal and parties to agree at the initial hearing that the IBA Guidelines, or some portions of them, will serve as a source of guidance, as is now customary with respect to the IBA Rules on the Taking of Evidence.
In one case on which I served as chair of the tribunal, it was clear that joint venture partners could not work together. I asked the parties to put aside the 18-month timetable they had proposed, and instead meet immediately to discuss the four or five issues that needed a prompt resolution. An hour later, they came back to the meeting room with such a list. We were able to formulate a hearing around those issues in only a few months. Once the arbitrators decided those issues, the case promptly settled.
As the above discussion makes clear, the topics that may be addressed and resolved at the initial hearing are as many and varied as the procedural possibilities of international arbitration itself. The initial hearing is the first, and most critical, occasion for the tribunal and parties to shape procedures appropriate to the nature and complexity of the particular case – to organise proceedings in a cost-effective manner and to anticipate and avoid disruptive procedural battles later in the case. The initial hearing is also, of course, counsel’s only opportunity to make a good first impression on the tribunal. For all these reasons, it is important that counsel use the initial hearing to best advantage – which can only occur if counsel approaches the event with a thorough understanding how they would like the entire case to unfold.
[1] Grant Hanessian is a partner at Baker McKenzie. The author thanks Robyn Lym and Laura Leira, associate and legal assistant in the New York office of the firm, respectively, for their assistance with the preparation of this chapter.
[2] See Pieter Sanders, The Art of Arbitration: Essays on International Arbitration Liber Amicorum (Springer 1982); Doak Bishop and Edward Kehoe, The Art of Advocacy in International Arbitration (2d ed., Juris 2010).
[3] See Christopher Newmark, ‘Controlling Time and Costs in Arbitration,’ The Leading Arbitrators’ Guide to International Arbitration, L. Newman and R. Hill eds. (3d ed., Juris 2015), pp. 81-96.
[4] Article V(1)(b) of the New York Convention provides that an award may be refused recognition, if the ‘procedure was not in accordance with the agreement of the parties’.
[5] See, e.g., Rules of Arbitration of the International Chamber of Commerce Rules, effective as of 1 March 2017 (‘ICC Rules’), Appendix IV, ‘Case Management Techniques.’ See also International Centre for Dispute Resolution Rules, effective as of 1 June 2014 (‘ICDR Rules’), Art. 20(2); China International Trade Economic and Trade Arbitration Commission Rules, as revised 4 November 2014, effective as of 1 January 2015 (‘CIETAC Rules’), Art. 35(5); Singapore International Arbitration Centre Arbitration Rules effective as of 1 August 2016 (‘SIAC Rules’), Art. 19(3).
[6] ICC Rules, Arts. 22(2), 23 and 24. The Terms of Reference, drafted by the tribunal on the basis of submissions of the parties, set forth the scope of the proceedings, contentions of the parties and issues for decision. Terms of Reference are to be signed by the arbitrators and counsel; if any party refuses to participate in drawing up the terms or refuses to sign, the document must be approved by the ICC Court. See also CIETAC Rules, Art. 35(5). Unusually, Terms of Reference may also be required under local arbitration law. See, e.g., Article 216(1)(a) of the United Arab Emirates Civil Procedures Code, Federal Law No. (11) of 1992, Chapter 3.
[7] Report of the United Nations Commission on International Trade Law on the work of its twenty-ninth session, Official Records of the General Assembly, Fifty-first Session, Supplement No. 17 (A/51/17) (reproduced in UNCITRAL Yearbook, vol. XXVII: 1996, Part One), paras. 11-54.
[9] Rules providing that the institution, not the tribunal, determines place of arbitration in the absence of party agreement include ICC Rules, Art. 18(1); CIETAC Rules, Art. 7(2); and the Arbitration Institute of the Stockholm Chamber of Commerce Rules, effective as of 1 January 2017 (‘SCC Rules’), Art. 25(1).
[10] See, e.g., Hong Kong International Arbitration Center Rules, effective as of 1 November 2013 (‘HKIAC Rules’), Art. 14(2); ICC Rules, Art. 18(2); ICDR Rules, Art. 17(2); London Court of International Arbitration Rules, effective as of 1 October 2014 (‘LCIA Rules’), Art. 16.3; SCC Rules, Art. 25(2); SIAC Rules, Art. 21(2); The United Nations Commission on International Trade Rules, as revised in 2010 (‘UNCITRAL Rules’), Art. 18(2).
[11] See, e.g., Nigel Blackaby and Constantine Partasides, Redfern & Hunter on International Arbitration (6th ed., Oxford University Press 2015), Chapter 3.
[13] ICC Rules, Art. 23(1)(c),(d).
[14] See Grant Hanessian, ‘Legal Standards Applicable to Deciding Applications for Interim Relief,’ Defining Issues in International Arbitration (J.C. Betancourt, ed., Oxford University Press 2016), p. 158.
[16] See, e.g., International Chamber of Commerce, ICC Commission Report, Managing E-Document Production (2012).
[17] See Nigel Blackaby and Constantine Partasides, Redfern and Hunter on International Arbitration (6th ed., Oxford University Press 2015), Chapter 6.
[18] See, e.g., ICDR Rules, Arts. 4, 5.
[19] Lucy Reed has advocated the ‘Reed Retreat’ in which the arbitrators meet immediately prior to the merits hearings to discuss the parties’ submissions and consider issues on which they would like the parties to focus during the hearings. Lucy Reed, Kaplan Lecture 2012: Arbitral Decision-making: Art, Science or Sport? (2012), available at www.arbitration-icca.org/media/4/42869508553463/media113581569903770reed_tribunal_decision-making.pdf. Current International Bar Association president David Rivkin has advocated that tribunals agree to deliberate immediately after merits hearings, when they have the best recollection of the evidence and arguments. Douglas Thomson, ‘Rivkin’s “clarion call” for arbitration,’ Global Arbitration Review (27 October 2015), available at http://globalarbitrationreview.com/article/1034956/rivkin%E2%80%99s-%E2%80%9Cclarion-call%E2%80%9D-for-arbitration.
[20] See, e.g., Catherine A. Rogers, ‘Fit and Function in Legal Ethics: Developing a Code of Conduct for International Arbitration’, 23 Mich. J. Int’l L. 341 (2002).