A Brief Look At The Empirical Findings On International Arbitration: A Summary

The original article Empirical Findings on International Arbitration: An Overview by Christopher R. Drahozal from the University of Kansas, discusses newly (and not so new) available international arbitration data generated through arbitration institutions, scholarly research, or commentator analysis and provides a picture of:

(i) how parties use arbitration clauses, and the frequency of international commercial and investment arbitration proceedings to resolve transnational disputes;
(ii) various arbitral procedures;
(iii) applicable law;
(iv) demographics of international arbitrators;
(v) controversies in relation to investment arbitrations;
(vi) compliance with and enforcement of international arbitration awards; and
(vii) potential precedential effects.

Use of arbitration in resolving transnational disputes

Data analysis suggests that preference for the use of arbitration clauses in transnational commerce depends on the type of contract and transaction. However, the reasons for inclusion or omission of an arbitration clause in various types of contracts have not been fully explored yet.

Litigation may be preferred over arbitration in situations where emergency relief may be required, or where applicable law to disputes under those contracts are clear or offer special procedures. Survey data indicates that parties favour arbitration for reasons such as the enforceability of awards, and avoiding specific legal systems/national courts. Reasons which favour litigation include cost, and lack of effective sanctions during the arbitral process.

While the data does not include all types of filings, or every institution, it shows that the number of filings administered by various institutions internationally, such as the ICC, continue to grow each year (indeed, the ICC reported this month that its caseload has reached record levels).

The data also indicates that there is an increase in ICC arbitration proceedings in countries following that country’s adoption of a revised international arbitration statute as well as an increase in the number of arbitrators selected from that country in ICC arbitrations.

Arbitral procedures

Studies reviewed in the article describe a variety of information on procedural topics of international arbitration, such as the length of proceedings and size of tribunals, interim measures available, challenges to arbitrators, and mediation.

Reports confirm that a bulk of a party’s costs of the proceedings are made up of expenses related to witness and expert evidence, and lawyers fees and expenses. Arbitrator fees and case administration tend to make up a much smaller portion of overall costs.

While different tribunals vary in length of proceedings, on average, investment arbitration tends to take longer than a commercial arbitration from filing to award. Tribunal sizes tend to be split to roughly half of all international commercial arbitrations involving a sole arbitrator or a panel of three arbitrators.

Arbitrator challenges

Collected data also suggests that wh