Common Requests for Procedural and Other Rulings (Applications)

In arbitration, procedural matters that cannot be agreed between the parties are generally resolved by way of a ruling from the tribunal. Requests for such rulings are referred to as applications.

Arbitral tribunals generally have wide powers to deal with procedural matters, and applications may be made in a wide range of circumstances. It is not possible to address every type of application in this Guide; the most common applications are grouped below according to the stage of the arbitration at which they typically arise.

Before certain courts, applications are made using a prescribed procedure; in the English Courts, for example, the applicant must complete an application notice, provide a supporting witness statement and prepare a draft order. In arbitration, there are usually no equivalent formal requirements. An application may be made by letter to the tribunal, copied to the opposing party, setting out the relief sought and the reasons for it, and attaching any documents that may assist the tribunal in reaching its decision.

Before the Tribunal Is Constituted

Before an arbitral tribunal has been constituted, there is by definition no tribunal to which an application can be addressed. Depending on the terms of the arbitration agreement, the applicable institutional rules and the stage the proceedings have reached, an application at this stage is generally made to one of three bodies:

• the arbitral institution administering the arbitration (where the arbitration is institutional and the institution’s rules provide for pre-constitution applications, such as emergency arbitrator or expedited procedure mechanisms);
• an appointing authority designated in the arbitration agreement or nominated under the applicable rules (commonly relevant to the appointment or replacement of arbitrators in both institutional and ad hoc arbitrations); or,
• failing either of the above, the courts of the seat, which typically retain a residual supervisory jurisdiction to make orders in support of arbitration before a tribunal exists.

The following is a non-exhaustive list of applications that may arise at this stage of the proceedings.

Emergency arbitrator application: Where a party requires urgent relief and cannot wait for a tribunal to be constituted, it may apply for the appointment of an emergency arbitrator under the applicable institutional rules, which will typically make such a mechanism available on request, subject to a short response time from a designated emergency arbitrator. Emergency arbitrator applications are most often used to preserve assets, evidence, cargo or shares, or to maintain the contractual status quo, and any relief granted is generally provisional in nature and subject to confirmation, modification or revocation by the tribunal once constituted.

Application for expedited arbitration: A party may apply for the arbitration to proceed under an expedited procedure, seeking a shortened timetable and a simplified process, typically on the basis that the amount in dispute falls below a specified threshold, that the dispute is urgent, or that the issues involved are relatively straightforward. Institutional rules that provide for expedited procedures generally impose eligibility criteria and may also provide for a sole arbitrator and a documents-only process to achieve a faster resolution.

Application for appointment of an arbitrator: Where the arbitration agreement or applicable rules require a party to nominate an arbitrator, and that party fails to do so, or where the parties are unable to agree on a sole or presiding arbitrator, an application may be made to the relevant appointing authority or institution to make the appointment instead.

Challenge to an arbitrator: A party may challenge an arbitrator on the basis of an alleged lack of independence or impartiality, a failure to meet agreed qualifications, or another requirement set out in the arbitration agreement or applicable rules. The challenge is typically made by written submission to the relevant institution or appointing authority (or, under some rules, to the other arbitrators in the first instance), setting out the grounds relied upon, and the challenged arbitrator and the other party are usually given an opportunity to respond before a decision is made.

Application for joinder: Where a party considers that an additional party should participate in the arbitration, whether because that party is bound by the arbitration agreement or has otherwise consented to be joined, it may apply for that party to be added to the proceedings. Joinder before constitution of the tribunal is generally addressed by the institution under its rules, since a tribunal that has not yet been constituted cannot itself rule on the application, and the institution will typically consider factors such as the prospective party’s connection to the arbitration agreement and the stage of the proceedings.

Application for consolidation: A party may apply to consolidate two or more related arbitrations into a single proceeding, typically where the disputes arise from the same or related contracts or transactions and involve overlapping questions of fact or law. Where consolidation is sought before any tribunal has been constituted, the application is generally made to the relevant institution, which will assess compatibility between the arbitration agreements and disputes concerned under its rules.

Application to commence one arbitration under several contracts: Where a dispute arises out of a chain of contracts or a series of related arbitration agreements, a party may apply to commence a single arbitration covering claims under multiple contracts rather than separate arbitrations under each one. This application is typically made to the administering institution at the time the request for arbitration is filed, and is generally assessed by reference to the compatibility of the relevant arbitration agreements and the relationship between the contracts in question.

Application to determine the seat, language or procedural rules: Where the arbitration agreement does not specify the seat, the language of the arbitration or the procedural rules to apply, or where the parties disagree on these matters, an application may be made to the relevant institution or appointing authority to determine them prior to constitution of the tribunal. These determinations are generally treated as foundational, since the seat in particular will determine the supervisory court and the procedural law applicable to the arbitration.

Jurisdiction and Admissibility Applications

Once the tribunal has been constituted, applications concerning jurisdiction or admissibility are made directly to the tribunal, generally by letter or written submission copied to the other party, setting out the objection or application, the grounds relied upon and any supporting documents or authorities. Because these applications often go to the tribunal’s power to hear the dispute at all, or to whether a claim can be entertained in its current form, tribunals will typically invite submissions from both sides, and frequently a hearing, before ruling, particularly where the objection is contested or turns on disputed facts.

Jurisdictional objection: A jurisdictional objection challenges the tribunal’s power to hear some or all of the dispute. Common grounds include that there is no valid arbitration agreement, that the claim falls outside the scope of the arbitration agreement, that the respondent is not a party to or otherwise bound by the arbitration agreement, that the tribunal was improperly constituted, or that a condition precedent to arbitration (such as a mandatory negotiation or mediation step) was not satisfied. Because tribunals generally have the power to rule on their own jurisdiction under the Kompetenz-Kompetenz principle, a jurisdictional objection does not automatically halt the proceedings, and the tribunal will typically decide, often as a preliminary matter, whether and how to determine the objection.

Bifurcation: Bifurcation is the splitting of an arbitration into separate phases so that certain issues are determined, and potentially finally resolved, before others are addressed. The most common form of bifurcation is to have a jurisdictional objection, or another threshold or preliminary objection such as an admissibility or limitation defence, determined before the merits of the dispute are considered.

When deciding whether to bifurcate proceedings, tribunals will normally consider the following factors:

• Whether a favourable ruling on the preliminary issue could dispose of the whole case, or a substantial part of it, without the need to examine the merits. Where this is so, there is likely to be a strong efficiency argument in favour of bifurcation.
• Whether the preliminary issue is genuinely severable from the merits, or whether determining it would require the tribunal to make findings of fact or law that overlap substantially with the underlying dispute. Where the issues are closely intertwined, bifurcation is less likely to save time and cost and may instead lead to duplication.
• The risk that bifurcation will simply add an additional procedural stage, and therefore additional time and cost, if the preliminary issue does not resolve the case. Tribunals will weigh the potential savings against this risk before ordering a separate phase.

An application to bifurcate proceedings is usually made at an early case management stage, often in response to the tribunal’s invitation to comment on the proposed procedural timetable, and should explain concretely how the proposed structure would save time and cost rather than merely asserting that bifurcation is desirable in principle.

Application for early determination or summary dismissal: A party may apply for a claim or defence to be dismissed at an early stage on the basis that it is manifestly without merit or manifestly outside the tribunal’s jurisdiction, without the need for full pleadings, disclosure or a hearing on the merits. Because such applications risk depriving a party of the opportunity to present its case, tribunals will typically only grant early or summary dismissal where the deficiency in the claim or defence is clear on the material already before the tribunal, and will generally afford the affected party an opportunity to respond before ruling.

Application concerning admissibility: An admissibility objection does not challenge the tribunal’s power to hear the dispute, but instead contends that a particular claim should not be entertained, whether because:

• it is time-barred under an applicable limitation period;
• has already been finally decided between the parties (res judicata);
• has been waived;
• was brought without first complying with an agreed precondition such as negotiation or mediation;
• is premature; or
• otherwise amounts to an abuse of process.

Because the distinction between jurisdiction and admissibility can affect whether a ruling is reviewable by the courts of the seat, an application on these grounds should identify clearly which category the objection falls into and the basis for that characterisation.

Application to stay or suspend the arbitration: A party may apply for the arbitration, or part of it, to be stayed or suspended pending an external event, such as ongoing settlement discussions, insolvency proceedings affecting a party, related court litigation, another arbitration involving overlapping issues, or the tribunal’s determination of a preliminary issue. Tribunals will generally weigh the potential efficiency of awaiting the outcome of the relevant event against the risk of unnecessary delay to the arbitration, and a stay is more likely to be granted where the external proceedings are likely to resolve or narrow the issues in dispute within a reasonable timeframe.

Application to discontinue or terminate particular claims: A party may apply to discontinue or withdraw a claim, counterclaim or defence that it no longer wishes to pursue, whether because it has been resolved, is no longer viable, or for other case-management reasons. Tribunals will generally permit discontinuance on terms that protect the other party’s position, such as an order that the discontinuing party bear the costs occasioned by the claim, and may require the tribunal’s consent where the discontinuance would prejudice the other party’s ability to obtain a determination on the merits.

Pleadings and Case-Management Applications

Application for an Extension of Time

This is one of the most common applications made in arbitration. Parties may be occupied with other professional commitments, be on leave, or encounter personal circumstances that prevent compliance with a deadline, or the arbitration may be too complex to be dealt with within the standard time limits. Parties therefore often seek to extend the time limits prescribed by the applicable law, the arbitration rules or the orders of the tribunal.

Arbitral tribunals generally have wide discretionary powers to rule on procedural matters, especially when time limits are concerned. Applications for extensions of time may be made by email or in formal letters. Parties do not normally cite, and tribunals do not normally require, any legal argumentation in support of such applications.

When deciding whether or not to grant an extension of time, tribunals usually consider the following factors:

• Is there a valid reason for a party’s inability to meet the time limit? Illness, periods of leave (particularly the month of August in Europe), travel and hearings in other matters are generally considered to be sufficient reasons. Overlooking a deadline or errors in planning are generally not.
• Is the extension merely being sought to delay proceedings? Where a tribunal thinks that a party is delaying proceedings, it will hesitate to grant long or multiple extensions.
• Will the extension affect the rest of the procedural timetable and/or the final hearing? Tribunals, particularly those comprising senior and sought-after arbitrators, are often heavily engaged. Hearings are normally scheduled, and various service providers engaged, months in advance. Where an extension of time may result in hearings being delayed, tribunals will normally not grant extensions.

In practice, an application for an extension of time is best made as early as possible, ideally before the original deadline expires, and should propose a specific new date rather than an open-ended extension. Where the opposing party consents, the parties can usually agree the new date between themselves and simply notify the tribunal of the revised timetable, which will normally be confirmed without further enquiry.

Tribunals will also sometimes grant a short extension of their own motion, or invite the parties to agree consequential adjustments to the rest of the procedural timetable, so as to avoid the need for repeated applications.

Application for a Partial Award

Arbitration is rarely a short process; most arbitrations take a year or more to conclude. Proceedings may involve complex, time-consuming and expensive procedures such as (i) search for and disclosure of documents; (ii) production of witness statements; (iii) cross-examination of witnesses, among others. But some claims and defences are quite straightforward and may be dealt with quickly and without these time-consuming procedural steps. Arbitral tribunals are therefore normally entitled to deal with simple claims by way of partial awards.

A partial award, as the name suggests, is an award on part of the issues in dispute. While such awards are also sometimes called interim awards, they are in fact final awards as to the issues which they cover.

When considering whether to make a partial award, the tribunal will normally consider:

• Does one party maintain that there is no defence to some part of the claim? This is common where, for example:
• one of the claims is not addressed in a defence;
• there is a defence but not covering the full amount claimed;
• there is a claim and a counterclaim, the only justification for the respondent’s failure to pay is the counterclaim, but the counterclaim is smaller than the claim; or
• the defence is based on legal submissions which are clearly wrong.
• Will determination of a particular issue at an early stage save time and/or costs in relation to the future conduct of the arbitration? There are often several legal theories on the basis of which the tribunal may rule on a claim. For example, the tribunal may dismiss a claim because it is without merit, or because the claimant has missed the statutory or contractual limitation period to commence arbitration. Determination of the claim on the merits might require witness statements, an extensive disclosure exercise and a costly oral hearing. If the tribunal considers that it can determine the claim at an early stage on the basis of the limitation period, it will normally do so.
• Does the matter require witness evidence or can it be determined on the basis of legal submissions and documents alone? It is extremely rare for tribunals to make partial awards where witness evidence is necessary to determine the case.

From a drafting perspective, an application for a partial award should identify precisely which issue or claim the tribunal is asked to determine, explain why that issue is discrete and capable of determination without prejudging the issues that remain to be decided, and set out the procedure proposed, for example on the papers or with a short hearing limited to that issue. Applicants should also address whether the proposed partial award could give rise to a real risk of overlapping or inconsistent findings with the issues left for later determination, since tribunals will be reluctant to proceed by way of a partial award where such a risk exists.

Application for Security for Costs

This application is appropriate where the respondent has reason to doubt that the claimant will be able or willing to satisfy an adverse costs order, for example because the claimant is a shell company, is otherwise of doubtful solvency, or may be difficult to enforce against.

Arbitration proceedings can be costly, and a respondent who successfully defends a claim will normally obtain a costs order against the claimant. However, if the claimant is unable or unwilling to pay, that costs order may prove unenforceable in practice. To guard against such an outcome, the tribunal may order the claimant to provide a deposit or guarantee as security for its potential obligation to pay the respondent’s costs. Such orders are referred to as orders for security for costs.

When deciding whether to order security for costs, arbitral tribunals will normally consider the following issues:

• Is the party seeking security a claimant or a counterclaimant? Tribunals may only order security for costs against a claimant or counterclaimant; they cannot order a respondent to provide security for costs. This restriction reflects a respondent’s right to a fair hearing: a tribunal cannot rule against a respondent, and thereby deprive it of the ability to defend itself, solely because it lacks the means to provide security.
• How likely is the claim or counterclaim to succeed on a preliminary view? The tribunal will not, on such an application, devote significant time to examining the merits of the claim. However, if it appears, on a preliminary view, that the claimant’s or counterclaimant’s claims are without merit, the tribunal will be more likely to order that party to provide security.
• What evidence is there that the respondent will encounter difficulty enforcing a costs order made in its favour? Such evidence may include the claimant’s history of breaches of court or tribunal orders, other conduct raising doubts as to the claimant’s good faith, or evidence that the claimant’s balance sheet is weak or that it has other unpaid debts.
• The tribunal is not generally entitled to order security for costs solely on the basis that the claimant is based in a particular jurisdiction. However, the tribunal will normally consider it relevant if, in the jurisdiction of the claimant’s incorporation, companies may be established and liquidated quickly, and if enforcement of arbitration awards in that jurisdiction may be difficult.

An application for security for costs may be made in a letter to the tribunal, with a copy to the claimant or counterclaimant. The letter should ideally be accompanied by:

• a copy of the claimant’s accounts if available;
• other evidence relating to the issues which were mentioned earlier; and
• the respondent’s statement of incurred and anticipated costs, to allow the tribunal to consider and determine the appropriate amount of security.

An order for security will generally provide that the claimant must pay an amount of money into an escrow account or provide a bank guarantee from a first-class international bank within a certain time limit. If the claimant fails to do so, then the respondent may apply for what is called a peremptory, or unless order, that is an order to the effect that unless the claimant provides security by an extended deadline (usually one or two weeks), its claims be struck out. The tribunal’s power to make such peremptory orders and ultimately strike out a claim for failure to provide security for costs makes an application for security a very powerful tool in arbitration.

In practice, an application for security for costs is best made at an early stage of the proceedings, since a late application may be refused on the ground that the applicant has already incurred the bulk of its costs and that a late order would cause disproportionate prejudice to the claimant. Applicants should also be prepared to update their costs estimates as the case progresses, since tribunals will often order security in stages linked to the procedural timetable, for example an initial tranche before the exchange of witness statements and a further tranche before the hearing, rather than a single lump sum for the whole arbitration.

Document-Production Applications

Applications may also be made in relation to the production or disclosure of documents, for example seeking an order that a party disclose specific documents or categories of documents, or that an adverse inference be drawn from a party’s failure to comply with a disclosure order. Document-production applications raise a distinct set of considerations and are addressed in detail in a separate chapter of this Guide.

Interim and Conservatory Measures

Arbitral tribunals also have the power to order a range of interim or conservatory measures to protect a party’s position pending final determination of the dispute, including orders for the preservation of assets or evidence, orders restraining a party from dealing with assets, and orders for security for the amount in dispute or for costs. Interim and conservatory measures are addressed in more detail in a separate chapter of this Guide.