In many arbitral proceedings, both ad hoc and institutional, there will be no set time limit on production of the award. This can be a source of significant frustration for the parties, who may be left waiting for many months to receive the award, potentially with little or no guidance as to when the award is likely to be forthcoming. This is obviously problematic for claimants, who even if ultimately successful have waited a long time to make a recovery, but can also be a source of real difficulty for respondents, who remain without any clarity on their exposure. An unsuccessful respondent may be ordered to pay interest on the principal and during any delay in production of the award this meter continues to tick up.

In recent years the leading arbitral institutions have revised their rules with an eye to efficiency, including a move to electronic filings and expressly empowering the tribunal to carry out early determination of claims. As part of this process, the leading institutions have made provision for a set timescale for production of the award, though different rules vary in how this is expressed and the tribunal remains free to extend that time if that is required in any particular case.

Under the LCIA Rules, for example, the Tribunal is required to produce the final award “as soon as reasonably possible”. The tribunal is given a little more guidance, being required to “endeavour to do so” no more than 3 months after the last submissions are filed (Article 15.10). The HKIAC also allows the tribunal three months, but this is calculated from the date when the arbitral tribunal declares the proceedings closed (see 31.2). There are similar provisions in the ICC and SIAC Rules, with the ICC Rules requiring the award to be produced within six months after the Terms of Reference unless a different time is fixed ((ICC Rules Article 31(1)) and the SIAC Rules allowing the tribunal up to 45 days from the date of closure of the proceedings to deliver the draft award to the Registrar (SIAC Rule 32.3).

The latest version of the LCAM Rules, in force from 1 June 2021, contains a number of efficiency-related changes, including new and welcome wording in relation to the timing of production of the award. The Rules continue to require the tribunal to issue the award within six weeks from the date on which the arbitration was concluded, though this time may be extended by the Board if necessary, including where the tribunal submits a “reasoned request” for an extension (Article 37.1). The new LCAM Rules may motivate LCAM tribunals to keep a particularly strict eye on the calendar when producing the award, as a new provision in the Rules empowers the LCAM Board to reduce the tribunal’s fees where there has been “unreasonable delay” in issuing the award. There is precedent for this kind of provision, with a similar sanction also found in the ICC Note to Tribunals.

For parties wishing to fast track their disputes, the LCAM Expedited Arbitration Rules, in force from June 2021, provide for an even speedier journey to an award, with the arbitrator being required to produce the award within 6 months of commencement (Article 12). The arbitrator will “endeavour” to publish the award within six weeks of close of submissions, though extensions of time can be sought from the LCAM Board where there are exceptional circumstances.

It remains to be seen how regularly the time limits will be extended under the LCAM Rules and the LCAM Expedited Arbitration Rules and how often the costs sanction under the LCAM Rules will need to be applied. That said, linking tribunal fees to timely production of the award certainly has the potential to focus minds. Importantly, the time limit provides users with a degree of insight into the likely timescale to reach an award. The new express power for the LCAM Board to cut tribunal fees in arbitrations under the LCAM Rules also provides parties with reassurance that the risk for any unreasonable delay in the production of an award will not be borne wholly by the parties.

By Rebecca Warder, Senior Lawyer, Herbert Smith Freehills and Rutger Metsch, Associate, Herbert Smith Freehills